Save the Pell grant

Missing from the health care bill President Barack Obama signed Tuesday was a deal to stop subsidizing private lenders in the student loan market and shift those funds to Pell grants.

The House of Representatives included the proposal in its version of the health care bill, but the Senate still has to vote on the measure.

Given the recession, drastic cuts in Pell grant funding are likely if the funds aren’t shifted. The Senate needs to act fast to make sure that doesn’t happen.

The Pell grant program is currently facing a $19 billion budget gap. This is partly because the recession has led so many people to go back to school. A significant amount of these new students had incomes low enough to qualify for the grant.

Secretary of Education Arne Duncan has given dire warnings about what could happen if the budget gap isn’t filled. Eight million students will see their grants reduced as the maximum grant is slated to fall from $5,350 to $2,150. Many students will lose their grants altogether.

The Pell grants were sustained this year by stimulus funding, and some Republicans argue that keeping the grant value up is unsustainable. But we can afford to make this investment in those hurt by the recession who want to take this downturn as an opportunity to improve their skills.

The plan in the House bill would end subsidies to private lenders in the student loan market and make the federal government the sole source of student loans.

More than a third of the savings from the subsidy elimination would go to Pell grants.

According to the Department of Education, 27 percent of all undergraduates receive some money from the grant, and most grants go to families making less than $40,000 a year. Many of these students will have to drop out of school if the budget for Pell grants goes unsupported.

Even if the Senate passes the plan in the House bill, there will still be a budget gap of about $5.5 billion.

Congress should look into ways to secure funding for the whole gap so Americans can come out of this recession with the skills necessary to compete in a 21st century economy.