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To the editor:
Regarding the following quote from this article ("Loan Relief Proposal From Top Republican"): “Spokespeople for Democrats on the House and Senate education committees declined to say why” (they are not requesting an increase to the Pell Grant).
Perhaps the reason a Pell increase is on the backburner is the fact that we are facing the cost of cancelling billions of dollars of student loans in the near future.
A recent ED report indicated that the average forgiveness for PSLF was about $66,000 per borrower (it is going mostly to graduate level borrowers), and this is before discussions of widespread across the board loan cancellations due to COVID-19. The value of the average PSLF forgiveness is nearly three times the current 4-year Pell award ($6195 per year for 19/20) for an undergraduate student with the lowest expected family contribution (EFC), almost $10,00 more than the independent undergraduate Stafford loan limit and over double the dependent undergraduate loan limit ($31,000).
In February this year, a CBO estimate (using fair value accounting) projected the 10 year cost of loan program (due to forgiveness and other costs) of $263 billion. If you average this over 10 years it comes to almost the same amount we are spending per year in Pell grants. Asking for more Pell while also asking for more loan forgiveness might be asking to have our cake and eat it too or to put it another way, trying taking a swim without getting wet.
I suppose it could also be more simplistic than that and is simply based on what gets more votes now. Broad-based loan forgiveness probably sounds more appealing than an increase to the Pell Grant if votes are the goal.
--Ben
Assistant Director of Financial Aid
