As the uncertain economic climate continues to worry both Main Street and Wall Street, government officials are close to agreeing on a new budget that could affect student financial aid such as Pell grants, reports Inside Higher Ed.
The new budget aims to cut spending by as much as $1 trillion in order to reduce the national deficit. Federal financial aid programs including the Pell grant will be affected by the new legislation. Changes that students may face as part of the new budget include a reduction in the amount of time that individuals are eligible for Pell grants. At present, students can apply for Pell grants to cover up to 18 semesters. Under the new budget, this time period would be reduced to 12 semesters. Some scholarships for college may also be affected by the budget restructuring.
In addition, the current six-month grace period on student loan repayments – where the government pays interest on student debt after they graduate – would also be eliminated under the new budget proposals, saving the government approximately $400 million.
According to CNN Money, Secretary of Education Arne Duncan said that the Obama administration is committed to the Pell grant system.
"The president is making very tough cuts, painful cuts," Duncan told the news outlet. "Pieces of our budget [are] being hit hard but we have to continue to invest [in education for this country's children]."
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