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Pell Grant debt may drain funds

November 19, 2001

More than 6,000 MSU students who participate in the Pell Grant program may receive less money than they’re expecting next year.

Educators across the country are encouraging Washington lawmakers to correct an oversight that could cause no increase in next year’s federal student aid, despite rising tuition costs.

The Pell Grant program is slated to receive $1.7 billion and $1.5 billion increases from the U.S. House and Senate, respectively, in similar bills passed earlier this month.

The bills, which are in conference committee, both call for the maximum grant to be $4,000, a $250 increase from last year.

That increase may not come, however, because the Pell Grant program is overdrawn by about $1.7 billion, according to the American Council on Education, meaning the additional funding will go toward paying off debt.

“They are offering to increase the (maximum) grant to $4,000 but probably only providing funding to keep it at $3,750,” said Rick Shipman, director of MSU’s Office of Financial Aid. “The effect of increasing tuition and not increasing Pell is effectively a decrease in the percent of overall college cost covered by the Pell Grant.”

Shipman said MSU would be hard pressed to find funds to cover the shortfall in the grants. MSU students received $13 million from the program last year.

He said MSU has sent letters to Congress asking them to provide more funding to the grant.

“I don’t know how successful that will be,” Shipman said. “I would like to see them take a really different approach

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