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 A plan was unveiled by the Republicans in February for reducing the Pell Grants funding by 25%. They also proposed to cut down the maximum amount of the grant by 845 dollars. These changes would slash the funding below the levels of 2008. According to the education experts, this will discourage the students who depend on this federal program for educational support. The White House asked for cuts that are more modest for maintaining the maximum amount of grant at 5,500 dollars.

The administration proposed a reduction of about 100 billion dollars over the next decade. This will be done by cancellation of a rule which allows the qualification of summer students for extra grants and also by eliminating the interest subsidies. Arne Duncan, the education secretary said that it is never easy to do such cuts but it is important in the present fiscal situation.

This plan may or may not be successful politically. The fact is although the administration is capable of preserving most funding for the Pell Grants; the students are going to lose. The states that are cash strapped are reducing the support they provide to students for their higher education and so the total amount of funding is shrinking in a precipitous way.

No aggregate figure is available regarding reductions in the state level since the financial crisis started. However since 2008 cuts have been made in 43 states to higher education. Many of such reductions by different states are quite shocking. The financial aid reduced by about $135 dollars in the state of Michigan. In the last two years the spending dropped by $141 million in Iowa which is about 20%.

It has been long known to the state legislators that the post secondary education can be hacked more than any other service. This is due to the reason that the funding gap is usually covered by the tuition hikes. This is basically a process to raise taxes without becoming dinged by it. The tuition fees at 11 public universities in Florida have increased by about 32% in the last two years. Tuition has been raised by the University of Florida by 32% and others also followed suit.

With the soaring costs of education the maximum amount of Pell Grants is now less helpful for the students than it used to be in 1990. At present it covers only 34 % of the tuition, room, board and fees at the four year public colleges. Two decades ago it used to cover 45 %. In such situation the disadvantaged students need more help from the federal government.

There are real consequences of the reductions in the funding for education. Such grants are an important factor that makes a difference between completion of the college education and dropout. According to an estimate in December 2010 the number of jobs which need bachelor’s degree will grow by 17 % over the next decade while the figure is 18 % for master’s degree. During the same period employment which needs on-job training is expected to grow only by 8%.