The budget outline released by House Republicans would freeze levels of financial aid for poor college students, on the pretext that the Obama administration’s expansion of student assistance is expensive and ill-targeted. It’s a bad idea built on a faulty premise. Even if that weren’t the case, the proposal is a poor way to achieve cost savings or increase the efficiency of federal student aid.
The budget outline released by House Republicans would freeze levels of financial aid for poor college students, on the pretext that the Obama administration’s expansion of student assistance is expensive and ill-targeted. It’s a bad idea built on a faulty premise. Even if that weren’t the case, the proposal is a poor way to achieve cost savings or increase the efficiency of federal student aid.
The underlying absurdity is the notion that the federal budget can be balanced without both long-term entitlement cuts and an increase in revenue. Long-term entitlement spending, particularly on old-age benefits, threatens to gobble up ever-larger portions of the federal budget, eroding the ability of the government to do what Americans expect of it. House Republicans proposed to pare Medicare down a bit, but because they refused to consider any concomitant increase in federal revenue, they had to hollow out other major priorities to make their numbers work. Higher education spending, which doesn’t claim an excessively large chunk of the federal budget, is one of the areas they targeted.
The House GOP plan would freeze the maximum size of the Pell Grant, which goes to the neediest students, at $5,775 for 10 years, instead of allowing the grant to grow with inflation. The proposal would also adjust the way the program determines who is needy enough to qualify for Pell assistance, though it doesn’t say how, exactly. The justification is that the Pell Grant program has expanded lately, which is costly, and that changes to the eligibility formula have resulted in precious funds going to students who aren’t very needy.
That’s nonsense. If Republicans must cut the federal higher education budget — a premise we don’t buy — there are much better ways to do so. For one thing, freezing the Pell Grant maximum doesn’t better target federal spending, because only the neediest students qualify for the maximum award. While narrowing the Pell eligibility formula could take assistance from some students who are slightly better off, no one who qualifies for any sort of Pell Grant is wealthy. Rather than freeze the program, Congress should find the money to make Pell Grants available for summer school, so needy students can complete their educations in less time.
Meanwhile, education reformers seeking to save money and distribute available funds more efficiently should aim at government schemes that aren’t means tested or that aren’t means tested well. President Obama’s plan to pay for community college for all, regardless of family income, is one example. Another is the 529 savings plan, which slathers tax breaks on wealthy people financing their children’s college educations. President Obama proposed eliminating 529s, but that isn’t necessary; insisting that the amount of government aid accord with income would be enough.
When funding higher education benefits, it’s important to ask whether national wealth will be squandered helping students from families that can afford to pay for their educations. By targeting Pell, the House GOP decided to go in the opposite direction.
— Washington Post