Bush administration calling for boost in Pell grants

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RALEIGH, North Carolina (AP) -- President Bush's 2008 budget will include a proposal for the biggest hike in Pell grants for low-income college students in three decades. Education Secretary Margaret Spellings said Thursday that the budget will contain a proposed increase of $550, to a maximum award of $4,600. That would exceed the $260 increase passed Wednesday by the House. Democrats have introduced a proposal in the Senate, currently before committee, that calls for an immediate increase to $5,100. All told, low-income students seem likely to get their first increase in maximum Pell awards in five years. But education advocates warned that they're unsure how the increase would be funded, and caution it could come at the expense of other financial aid programs."If this represents an actual increase in total need-based student aid, it will be great news," said Terry Hartle, senior vice president of the American Council on Education, an umbrella group of colleges and universities. But if supplemental grant programs are cut, "it's quite possible ... individual students could be less well off."Spellings, after announcing the proposal at an education conference at North Carolina State University, said the Pell increase would be paid for with increased revenues and "efficiencies" that she declined to specify, saying details would be released with the president's budget announcement Monday. The grants -- which students don't have to pay back -- are the federal government's main direct financial aid program for low-income families. But as college costs have skyrocketed, the grants' buying power has eroded sharply. Twenty years ago, maximum Pell Grants covered about 60 percent of the average published price of attending a public four-year university, according to figures compiled in a report last year by the College Board. In 2005-2006, the maximum grant covered just one-third of that cost. Increasing Pell grants was a key recommendation of Spellings' national Commission on the Future of Higher Education. The problem of college affordability "has become a raging fire in American higher education," Spellings said Thursday. College "has now become virtually out of reach for many American families, and that's why it's so important that we focus on Pell as the first place to go," she said. Democratic Sen. Edward Kennedy, who chairs the committee overseeing education issues, issued a statement calling the announcement a "welcome development" that "shows how a Democratic Congress is changing the nation's priorities."Bush had proposed a $100 increase in the value of maximum Pell grants in his 2006 budget, but no increase was passed by Congress that year. Luke Swarthout, higher education advocate at the U.S. PIRG, a public interest group, applauded the announcement but also said it's important to see how the increase will be paid for."Provided that the administration is not robbing Peter to pay 'Pell,' this could be a very meaningful increase for low-income students all across the country," he said.