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Latest Deal Protects Maximum Pell, Ends Year-Round Grants

Details are emerging on the 11th-hour spending deal struck by Congress and the administration late Friday and its impact on students planning for college. (See Politics K-12 for a broader look at how education fares under the agreement.)

The bill provides $23 billion to fund the Pell Grant program through the end of the fiscal year. The maximum award of $5,500 was maintained. The House had proposed cutting the federal grants for low-income students by $845, but that was rejected by the Senate.

The new compromise bill would eliminate the "year-round Pell," which started in 2009 and allowed students to receive up to two Pell Grants a year if they went to school year round. Cutting this program was a cost-saving measure also proposed in the administration's 2012 budget.

Access to a second Pell Grant was very popular among students. In a survey released last week, summer Pell Grant awards increased 113 percent from the summer of 2009 to the summer of 2010 just at community colleges. But that also meant costs skyrocketed. The extension cost up to 10 times the original estimate.

So, if Congress passes this proposal, as expected, and the president signs it, the year-round Pell will be eliminated for the 2011-12 award year.

What can students expect this summer?

There may be a cushion. Depending on how regulations are interpreted, some students who are already scheduled to get a summer Pell Grant could still get one using 2010-11 funds, said Justin Draeger, president and chief executive officer of the National Association of Student Financial Aid Administrators.

Starting next year with just one Pell Grant, it will be more difficult for students who were trying to accelerate their program and attend school year round, said Draeger. "It's regrettable that it's gone," he said. Yet, the big picture preservation of the maximum Pell Grant is more important, Draeger said.

The Pell Grant program has provided access to low-income students who have increasingly needed help during the economic recession. The growth of the Pell Grant program is the "symptom of its success," Draeger said.

As for next year, Draeger said it would be a mistake to believe the Pell Grant program is safe from cuts. "We have to rally as a community to make sure the investment in education remains untouched," he said.

In 2012, the U.S. Department of Education budget calls for $41 billion for the Pell Grant program to help an estimated 9.6 million students.

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