Student debt is on the rise, but a proposed house bill is aiming to combat it.

Rep. Salud Carbajal (D-CA) discussed the Degrees Not Debt Act of 2018 in the University Union Plaza on Oct. 8.

The bill will expand Pell Grants to provide more funding to students. 

“A strong education system is one of the best ways for our country to invest in future generations,” Carbajal said. “It is imperative that we ensure access to quality, affordable education for every person who seeks it.”

YouTube video
Video By Kallyn Hobmann

Currently, the maximum amount of money the Pell Grant can supply to a student is $6,195 per academic year, according to the Office of Federal Student Aid

With public university tuition costs averaging from $11,000 to $27,000, the Pell Grant does not provide enough money to support students, according to Carbajal.

To combat inflation and rising tuition costs, the bill will increase the Pell Grant maximum to $10,000 per academic year, Carbajal said. 

In addition, the bill will lower the expected family contribution to $0 for families whose income is 250 percent below the federal poverty level, allowing more students to collect the $10,000 maximum grant, according to a news release from Senator Heinrich, another congressman in favor of the bill.

“Over time, the impact of the Pell Grant has lessened,” Cal Poly’s Executive Director of Financial Aid and Scholarships Gerrie Hatten said. 

In the 1980s, the Pell Grant covered up to 50 percent of the cost of attendance at a four year university. Today, the Pell Grant only covers up to 20 percent of Cal Poly’s cost of attendance, Hatten said. 

For some students, the Pell Grant is just not enough.

“It’s crazy the stories you hear about students not being able to eat, not being able to afford housing, working two, three I’ve heard of students working four jobs to try to make ends meet,” political science professor Chris Hartog said. “It’s an obstacle to graduating in some cases.”

Students often pursue federal student loans to supplement grants they may receive. 

Now, 42 million Americans have a federal student loan, amounting to about $1.5 trillion in debt⁠ — which is more than the current U.S. credit card debt, Carbajal said. 

“[Students] come into college not really knowing how financials work, so for us to kind of sign our lives away and go into these 15-year debts is absurd,” agricultural systems management junior Armando Nevarez said.

Jack Sann | Mustang News

How the Pell Grant Works

Pell Grants are typically awarded to undergraduate students with financial need. Occasionally, a Pell Grant is awarded to a student pursuing a teaching credential, according to the Office of Federal Student Aid.

The amount of money a student can receive is calculated by subtracting their expected family contribution from the cost of attendance at their university. The cost of attendance includes tuition, housing, food, transportation, books and other supplies costs, according to the Office of Federal Student Aid

Financing the Bill 

To finance the expansion of the Pell Grants, the bill would reverse parts of the 2017 Tax Bill, U.S. House of Representatives Communications Director Noelle Rosellini wrote in an email. 

Before the 2017 tax bill, individuals who earned $5.4 million a year or couples who made $10.98 million a year were required to pay an estate tax, which taxes a person’s property when they die. 

After the 2017 tax bill, the threshold doubled, so individuals who make $10.98 million or couples who make $22 million qualify for the estate tax, Rosellini wrote in an email.

The bill would reverse this, generating $83 billion dollars over the next 10 years to use for Pell Grants, according to Rosellini.

“We must commit ourselves to ensuring that future generations ⁠— students from all backgrounds ⁠— can continue to access our Central Coast schools, graduate successfully, and continue to go on and change the world,” Carbajal said. 

Correction: The type of bill was updated.

Leave a comment

Your email address will not be published. Required fields are marked *