Obama's budget to target education Pell grants

By Lesa Jansen, White House producer


WASHINGTON (CNN) -- President Obama's budget Monday will propose cutting $100 billion dollars from the Pell grant program and other higher education programs, but use those savings to ensure that eligible students would be able to receive the current maximum award of $5,500 per school year.

Jacob Lew, director of the Office of Management and Budget, said Sunday on State of the Union with Candy Crowley that the changes would affect two areas of the Pell grant program.

The proposal calls for the end to the policy where students could qualify for two grants in one year -- one for the regular academic year and a second for summer school. Only one Pell grant per year would be awarded.

According to an Obama administration source, the savings would be $8 billion dollars next year, and $60 billion dollars over 10 years.

Lew said the second change would affect graduate and professional school students, reducing loan subsidies for these students.

Currently the government pays the interest on loans for some graduate and professional school students as long as they remain in school. Under the proposal, interest would build up while students were in school, though students wouldn't have to start paying back loans until after graduation.

By ending this program, the government would save $2 billion next year and $29 billion dollars over 10 years, according to an administration source.

"In education, we invest very seriously to make sure that 9 million students can go to college using Pell grant, to make sure that K-12 education -- we have 100,000 new teachers who are trained and experienced in science, technology, engineering and math," Lew said on State of the Union. "But we also have cutbacks."

In a conference call Friday, Education Secretary Arne Duncan was asked about cuts in discretionary spending and how that could affect Pell grants. Duncan said the administration is "committed to maintain Pell."

Duncan said the budget would be "responsible" and "makes important investments in education reforms" including early learning, reforms in education and making college affordable.

When asked if more money for race to the top and new initiatives for early learning was realistic, he said he hoped it is. He continued: " The president is making very tough cuts, painful cuts. Pieces of our budget is being hit hard but we have to continue to invest" in education for this country's children. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,804.80 26.65 0.15%
Nasdaq 4,765.38 16.98 0.36%
S&P 500 2,070.65 9.42 0.46%
Treasuries 2.18 -0.03 -1.27%
Data as of 6:22am ET
Company Price Change % Change
Bank of America Corp... 17.62 0.09 0.51%
Apple Inc 111.78 -0.87 -0.77%
General Electric Co 25.62 0.48 1.91%
Intel Corp 36.37 -0.65 -1.76%
Microsoft Corp 47.66 0.14 0.29%
Data as of Dec 19

Sections

New York Magazine reporter Jessica Pressler, who has been caught up in controversy this past week, will not be moving on to a new job at Bloomberg News. More

Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More

Forums in dark corners of the web sell the kinds of hacks that befell Sony. More

Unilever sued Hampton Creek over its egg-free mayonnaise spread Just Mayo. But the company behind Best Foods and Hellman's mayonnaise has now dropped the lawsuit. More

The income of the top 1% jumped significantly in 2012, far outpacing inflation. Not only did this group make a larger share of the country's income, their share of total taxes also jumped from 35% to 38%. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.