Obama’s budget calls for Pell Grant expansion

President Obama’s budget blueprint would expand the Pell Grant program to nearly $35 billion in aid next year, an increase of more than 92% for the college funding program for low- and moderate-income families since he took office.

The hike would make the program available to an additional 1 million students and increase their maximum annual awards to $5,710 from $5,350, an administration official said late Friday.

When it is released Monday, the Obama budget will also propose making the Pell Grant an entitlement program like Medicare and Social Security. As an entitlement, the full grant would be guaranteed to anyone eligible, and Congress would be obliged to fund the program for all who qualify. At present, the program is subject to haggling in the budget-making process, and so the actual grants end up being less than what lawmakers authorize.

This will be Obama’s second attempt at persuading Congress to make the Pell Grant an entitlement.

The president signaled in his State of the Union address this week that college affordability would be a key part of his 2011 budget, laying out a series of proposals that includes giving families a $10,000 tax credit for four years of college and requiring graduates to pay only 10% of their income on federal student loans.

The budget also will propose forgiving a student’s debt after 20 years for most graduates, and after 10 years for those who choose careers in public service.

“In the United States of America, no one should go broke because they chose to go to college,” Obama said in one of the biggest bipartisan applause lines of the address.

The effect of the Pell Grant increase would be felt more immediately than that of the loan forgiveness plans.

Named after longtime Democratic Sen. Claiborne Pell of Rhode Island, the program began in 1973 and over time has become the cornerstone of aid to undergraduate students from needy families. But in recent decades, the program’s year-to-year growth has lagged far behind the growth in college costs.

“Pell grants function much like an entitlement,” an administration official said Friday, “yet they are funded through an annual appropriations process that can fall behind actual demand for the grants.”

Making the grant an entitlement would take some battling for the president on Capitol Hill. Obama proposed the idea last year, but Congress never took it up.

The president hopes his second attempt will “address the recurring shortfalls in the program once and for all,” the official said.

The president’s budget would make $34.8 billion in Pell Grant aid available. When he took office, $18.2 billion was available.

The plan would benefit more than 8.7 million students, compared with 7.7 million in the current school year.

In California, the number of students who qualify would jump by more than 45,900, thanks to an additional $3.9 billion in new aid. An estimated 961,400 students currently receive Pell funding in the state.

cparsons@latimes.com