Freezing Pell Grants will diminish education prospects, and therefore employment prospects, for low-income students
On Tuesday, House Republicans proposed an alternative budget which would freeze maximum Pell Grants for the next 10 years, claiming these cuts would “tailor aid to the truly needy.” The budget proposal also stipulates the money for Pell Grants would be purely discretionary, rather than partially discretionary and partially mandatory, as it is now. This distinction means that under the proposed changes the government would not be legally required to devote any money to the program, whereas if it remains partially mandatory, at least some funds must be devoted to Pell Grants by law.
Proponents of these changes argue they will improve the long-term sustainability of the Pell Grants program, because the federal government currently does not have enough money to fund it. But opponents of the alternative House budget worry that the changes to Pell Grants will make the program more vulnerable to cuts in the near future.
To say aid must be diverted from education funds to the “truly needy” implies that higher education is not a true need. But such an assumption is deeply flawed. In an earlier editorial in support of free community college, we pointed out that unemployment rates in 2013 were lowest among people with bachelor’s degrees or higher (3.3 percent) and significantly higher among people with only high school education (7.1 percent). In this sense, education is a need. If the Pell Grants program is cut, many students may be deterred from college by the prospect of overwhelming debt. And without higher education, their employment prospects will be limited.
Because of this, cuts to the Pell Grants program may actually increase the amount of “truly needy” people the government must attend to, by the House Republicans’ definition. Unemployment has been declining slowly, but unemployment benefits ran out at the end of 2013. This has likely increased the number of people relying on other government welfare programs, as many still have not been able to find jobs. This number may increase if students cannot afford education and cannot find employment because of it.
Education can impact not just the number of unemployed people, but also the number of underemployed people — those who work part time or low paying jobs because those are all they can find. Without a degree, people may not be able to get a job that pays more than minimum wage, and because $7.25 an hour is not enough to cover all basic living expenses, these people may also have to rely on government welfare programs. Cuts to Pell Grants may also increase the amount of people in this “truly needy” category.
Some students may still choose to take on student loans in order to go to college, but evidence is mounting that student loans put a significant damper on the economy. According to a Time article, “if students have significant debts, it means they’re less likely to spend money on other goods and services, and it also means they’re less likely to take out a mortgage on a house.” Reducing Pell Grants would only exacerbate the problem of student debt, further diminishing the consumer spending power that recent college graduates have.
Making education as accessible as possible should be a government priority, so that individual students have better economic prospects, and the economy as a whole can improve. Pell Grants are crucial to helping low income students attend college; they are not expendable luxuries.