E.D. Raises Estimated Pell Grant Shortfall to $1.46 Billion

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The Education Department's coffers are $1.46 billion short of the amount needed for Pell Grants awarded in the 1991-92 academic year, officials said last week.

The agency often underestimates the number of Pell Grant applicants and thus amount of funding needed. Lawmakers base appropriations on the agency's projections.

The shortfall is much larger than any in recent memory, and poses a threat both to Pell recipients and to funding for all education programs.

The department projected a gap of only $337 million in the fiscal 1993 budget submitted in January.

A department spokesman declined to speculate on what may have caused the higher-than-expected demand for the grants.

"More Americans than ever before are taking advantage of the best system of higher education in the world,'' said a statement read by the spokesman. "The dilemma is that we at the federal level now need to decide how to pay the bill.''

The spokesman said the department will work with lawmakers on resolving the issue "during the upcoming deliberations over the 1993 appropriations bill.''

Appropriators have often added funds needed to make up one year's shortfall to a spending bill for the next fiscal year. But the huge 1992 deficit could reduce funds available for Pell Grants and other education programs if the Congress takes that route, especially since the 1993 domestic budget is already tight.

The Education Department has proposed handling past deficits by reducing grants to all students, but big cuts would be needed this year.

Education lobbyist, contending that demand has been fueled by unemployed people returning to school, called for an emergency supplemental spending bill.

Otherwise, said Susan Frost, the executive director of the Committee for Education Funding, the Congress would be "calling an opportunity to educate people during a recession something we can't afford.''

If the President does not declare the shortfall an emergency, lawmakers would have to pay for the added spending with cuts or tax hikes.

An aide to Representative William D. Ford, the Michigan Democrat who chairs the House Education and Labor Committee, said the deficit could affect the pending reauthorization of the Higher Education Act. Both the House and Senate have voted to increase grant limits and eligibility.

The aide added that it could have long-term effects if lawmakers opt to liquidate it over several budget years.

Secretary of Education Lamar Alexander has been asked to appear before House appropriators to discuss the shortfall, but has not yet responded. He is already scheduled to testify this week before a Senate panel on the 1993 budget.

Vol. 11, Issue 35, Page 24

Published in Print: May 20, 1992, as E.D. Raises Estimated Pell Grant Shortfall to $1.46 Billion
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