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BY TARA BURGHART
Associated Press Writer | Tuesday, March 29, 2005 | (No comments posted.)
CHICAGO | Freshman U.S. Sen. Barack Obama said Monday the first bill he introduces in Congress will be aimed at increasing Pell Grant awards that help lower-income students afford college.
Arguing that soaring tuition prices have eroded the need-based award's value, the Democrat said he will seek to raise the maximum grant to $5,100 a year from the $4,050 level, where the grants have been frozen for three years.
President Bush also has proposed raising the Pell Grants, but by a smaller amount -- a $100 increase over the next five years for a total of $4,550.
The grants are the government's primary college aid for lower-income students. Currently, about 5.3 million undergraduates take advantage of the aid, which ranges from $400 to $4,050 based on need and college costs.
Because Pell Grants are not tied to the price of tuition or inflation, the current maximum award is worth about $700 less than the maximum grant 30 years ago, Obama said.
Obama first called for the increase on the campaign trail, where he said he heard from families worried they would not be able to send their children to college.
"Everywhere I go, I hear the same story -- 'We work hard, we pay our bills, we put away savings. But we just don't know if it's going to be enough when that tuition bill comes,'" Obama said.
Obama spoke in the student center at the University of Illinois at Chicago, where about 5,550 students qualify for Pell Grants.
One is Terranique Anderson, 22, a psychology student who receives about $1,000 each year. Anderson said an increase in the maximum award could be particularly beneficial for juniors and seniors, who often exhaust their savings before earning their degrees.
"I didn't use to have to take out loans, but I've started to now. The loans are killing me," she said. "Tuition costs keep increasing, but the Pell Grant is not."
Obama's proposal to increase the maximum award -- if enacted for 2006 -- would cost about $2 billion next year, spokesman Robert Gibbs said. The senator said the cost could be covered by eliminating the subsidies paid to banks and private lenders who participate in the government's student loan program.
The Bush administration said his Pell Grant proposal would be paid for by shrinking subsidies the government pays banks to encourage them to make low-interest student loans, and to the agencies that insure the loans for the lenders. Bush also would phase out Perkins loans, which provided help to about 673,000 students last year.
Obama said his bill would be considered by the Senate's Education Committee and that its ranking Democrat, Sen. Edward Kennedy, of Massachusetts, would like to see the maximum set higher.
But Obama said he chose the same amount that President Bush pledged to raise the Pell Grant to during his first presidential campaign, $5,100 -- well above what Bush called for in the budget proposal he sent to Congress in February.
"Part of the debate I think we're going to have is what level do we set the maximum Pell Grants," Obama said. "Hopefully because the president made this promise of $5,100, we think that it gives us a little bit more leverage in terms of him following through on promises (rather) than rising against them."
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