Pell Increase May Prove Elusive

The U.S. Senate voted last week by a narrow margin to increase federal funding for college tuition by $250 billion over the next 10 years. But the increase will be mostly symbolic for need-blind colleges like Harvard.

While the extra federal funds will provide a $600 addition to the non-merit-based Pell Grants, increasing the maximum amount of federal aid to $4,350, the federal government's commitment to reducing the cost of higher education will hardly be felt by students receiving Harvard financial aid packages.

"It won't change the way we distribute financial aid," said Sally C. Donahue, director of financial aid for the College.

Harvard's hefty $19 billion endowment and a $100 million specifically earmarked for financial aid from the recently completed Capital Campaign permit the University to meet all financial need for students requiring aid.

At a well-funded institution like Harvard, money intended to reduce a family's college expense burden rarely comes from the federal government.

"We meet full need. If the federal government doesn't give a Pell Grant, we meet that need with a Harvard grant," Donahue said.

This year, about $3 million of the $55 million in aid given by the University comes from the federal government. Of that money, a little over $1.2 million comes in the form of Pell Grants.

Just 568 Harvard students actually receive Pell Grants, according to the manager of federal and state aid for the College.

Despite the projected increase, a Pell Grant does not even meet the cost of one-ninth of a Harvard education.

Harvard's revamped financial aid program, announced this February, promises an $8.3 million increase in its budget, with an extra $2,000 in grant money added to each student's financial aid package.

Over the next two years, Harvard's tuition will most likely increase and, in effect, absorb the extra $340,800 added to Harvard's coffers with Pell Grant money, Donahue said.

The federal increase barely saves Harvard any money it would otherwise provide with institutional funding. If the Pell Grant increase were to be absorbed by next year's financial aid budget, which includes about $61 million in institutional money, Harvard would only stands to save .56 percent of institutional funding, assuming the number of recipients remained consistent.

"Government funding really isn't enough to meet the high cost of a college like Harvard," Donahue said. "It's not saving us money because we go ahead and budget for the amount students need."

However, to another institution, the increase in Pell Grant funding might significantly reduce the burden on their financial aid and scholarship programs.

"The availability of Pell Grants at the local level through the country is a great encouragement to students to think about testing themselves to apply to colleges and universities," said William R. Fitzsimmons, dean of admissions and financial aid for the College. "For some students, this increase makes the difference of whether or not they apply to colleges."

Fitzsimmons said the federal boost to funding also sends an encouraging message to students, that the government is concerned about the cost of colleges.

"It's nice to see it on the national agenda," Fitzsimmons said.

Over the past few years, legislation involving federal financial aid has mostly come in the form of tax incentives that provide relief to middle-class families financing an education, Fitzsimmons said.

"Previous tax benefits can be seen nationally as steering government dollars away from really low income families who did not have enough income to benefit from the incentives," he said.

With a new administration in the White House, Harvard financial aid officers said they are happy about the indications that cutting the costs of attending college will be a national priority.

"The increase in Pell Grants is wonderful public policy, and it's nice to see from my perspective, the government supporting need based aid," Donahue said. "Will it make a difference to Harvard students? No."

-Staff writer Nicole B. Usher can be reached at usher@fas.harvard.edu