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ComPELLing effect

On 17 September, the US House of Representatives passed a student aid bill that will strengthen the Pell Grants programme with USD 40 billion in additional funding over the next decade. The Pell Grants, launched in 1973 and named after Rhode Island’s former Democratic Senator Claiborne Pell, support about seven million students from low- and moderate-income households. Under this bill, the grants would rise with the consumer price index, plus 1 percentage point as of 2011, increasing the maximum award from USD 5 350 to USD 6 900. To fund the increase, subsidies to private loan providers will be ended, making the government the direct lender for student loans in the future (see ACA Newsletter – Education Europe, May 2009). While the boost in funding for the Pell Grants was generally welcomed, critics say that the money is ‘eaten up’ by soaring tuition fees, and that the more generous grants alone do not improve the study conditions of needy students. Rising grants are used as an excuse by many higher education institutions to raise fees well beyond inflation, as they are also suffering from underfunding. A recent US report showed that, indeed, more and more US students are drowning in debts (see ACA Newsletter – Education Europe, July 2009).
The next legislative steps will be a vote in the Senate, followed by a signature from the President. In the long run, however, the success of the Pell Grants will surely depend on the wider context of higher education funding and on whether measures can be taken to stop the vicious circle of rising grants and rising tuition fees. US congress