Trump Wants to Use Extra Pell Money for NASA. But That Surplus Is There for a Good Reason.

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The White House is asking Congress to divert nearly $4 billion in federal money meant for low-income students to finance other programs, including an increase for NASA space flights.

The money would come from an estimated $9-billion surplus in the Pell Grant program — funds that Congress has appropriated to be spent but that has not been used. The number of students who receive the grants, up to $6,000 a year, has fallen by more than two million since 2011, according to figures from the College Board, and spending on the program has dropped by about $12 billion.

President Trump’s request, sent to lawmakers on Monday, will almost certainly be ignored, given that Democrats have a majority in the U.S. House of Representatives. But even if Congress were to consider using that money for something else in higher education, it’s a bad idea, said several experts on higher-education policy.

Carlo Salerno, vice president for research at the software firm CampusLogic, said the whole point of having a surplus in the Pell program is to prepare for an unexpected future misfortune — like a family saving up to cover its expenses if the breadwinner loses a job or has a medical emergency.

“Looked at in this way, raiding the Pell surplus to fund NASA feels like a family irrationally tapping their rainy-day fund to get back into contention in the neighborhood’s ‘best Christmas-light display’ competition,” Salerno said in an email.

Even if lawmakers were to consider other higher-education spending, it’s important to preserve the Pell program for a future economic downturn, said Julie Peller, executive director of the advocacy group Higher Learning Advocates.

“While it is tempting to look outside Pell,” she said, “the ability to have a surplus is key for the program — it is a rainy-day fund.”

Surpluses and Deficits

The last time the Pell program had a shortfall was after the Great Recession, when the number of students who received the grants skyrocketed from six million to more than nine million in just two years. That led Congress in 2011 to eliminate the so-called year-round Pell, which had been created in 2009 and had allowed hundreds of thousands of students to receive grants to attend summer classes, for instance.

While Congress has made some small cuts in the Pell program since then, the legislators have also moved to increase access to financial aid for low-income students. Lawmakers restored the year-round Pell in 2017, and they created an experimental pilot program that allows prisoners to use the aid.

Pell could be made even more reliable if Congress were to include the program in its mandatory spending, as it does with other entitlements, such as Medicare and Medicaid, said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “As long as we fund this entitlement discretionarily, we’ll have surpluses and deficits,” he said.

Tiffany Jones, director of higher-education policy at the Education Trust, an advocacy organization, said that instead of redirecting the Pell surplus, Congress should make sure that it retains its buying power, by doubling the annual award and adjusting the amount for inflation. On average, a Pell grant covers about a third of the cost of attending a public four-year college, she explained, far less than it once did.

In addition, she said, many low-income students who should be in college are not getting the federal financial aid.

“We should challenge the idea,” Jones said, “that these proposed cuts would come from a ‘surplus’ when some estimates show up to two million college students eligible for Pell don’t receive it.”

Eric Kelderman writes about money and accountability in higher education, including such areas as state policy, accreditation, and legal affairs. You can find him on Twitter @etkeld, or email him at eric.kelderman@chronicle.com.