In the face of rising tuition rates at universities nationwide, President Bush moved to fulfill a campaign pledge last Friday by announcing that he would seek an increase in the maximum allowable award for the Pell Grant, a prominent federal student aid program.

Bush said he would seek a $500 increase in the maximum grant, which has stood at $4,050 for the past three years. Under the president’s proposal, the maximum Pell Grant would rise by $100 each year over the next five years.

“We want to raise the standards and provide incentives for people to aim high in life,” Bush said during a speech in Jacksonville, Fla. “And so I’m looking for Congress to get this new program and initiative in place.”

Bush said that he planned to pay for the new funding by reforming the federal student loan program to make it “more effective and efficient.” Although he did not provide details on the proposed student loan changes, they will likely become public when the president submits his budget to Congress in early February.

Georgetown administrators were optimistic but cautious about Bush’s plan.

“I think it is good news, but late news,” Scott Fleming (SFS ’72), Georgetown’s assistant to the president for federal relations, said. “Quite frankly, given the pattern of the last few years, I was surprised, and heartened.” Fleming said that the university would continue to monitor the plan as it progressed through the legislative process. He warned that the methods the administration decides upon to pay for the Pell Grant increase could counteract the positive effects of the increase itself, by cutting money from other higher education programs.

“It would be quite disheartening if we find out that the proposal is to increase Pell Grants but it is coming from cuts in another student aid account,” Fleming said. “You have to look at context. Our bottom line will be: is it good for students?”

University President John J. DeGioia also expressed concern about the need for more Pell Grant funding during an interview earlier this month, before the president announced his new initiative.

“The underfunding of the Pell Grant is something which we have to make up for,” DeGioia said. “The one who pays the biggest for the loss of federal funding is, frankly, the university. We bear the burden.”

In any case, Bush will face a $4.3 billion shortfall in the Pell Grant program when he submits his budget proposal to Congress.

His proposed reforms in the student loan program could include a cost-saving endeavor to overhaul loan consolidation rates, a favored cause of many congressional conservatives. Such an effort, which would likely face strong opposition from some Democrats and interest groups, would make interest rates on federal student loans variable, meaning the rates would adjust over time rather than remain at one low, flat rate.

The proposal to increase the maximum Pell Grant award comes at a time when Georgetown and other universities have faced dwindling federal student aid and rising tuition rates and costs. Georgetown, in particular, has lobbied for increases in the maximum Pell Grant for years.

Although funding for the Pell Grant program rose over each of the past three years, the maximum award remained frozen at $4,050 because the number of students receiving the grants increased.

Georgetown’s federal work-study program, which provides government funding for students working their way through college, has suffered particularly large cutbacks in recent years.

Funding for the work-study program has been frozen for the past few years, and because student need at Georgetown has not grown as fast as need at other institutions, Georgetown’s work-study funding has shrunk significantly. The university lost $304,000 in federal money – nearly 10 percent of its total work-study funding – in the 2003-04 academic year.

The proposed increase in the Pell Grant cap follows a fierce congressional battle over White House efforts to introduce new state and local tax data used as part of the formula determining individual Pell Grant aid.

Democrats successfully blocked a plan in 2003 to recalculate the state and local tax tables – a proposal they said would reduce the Pell Grants of over 1 million needy students and cut the amount of aid distributed by over $300 million. But Republicans, who have argued that the tax table changes will actually increase the number of students receiving the grants by about 25,000, were successful in attaching the new tables to legislation expected to pass in the next several weeks.

Despite the political wrangling, some members of the student body – over half of which receives some form of federal aid – were optimistic about the Pell Grant changes, and hopeful that Bush’s plan could signal an increasing focus on higher education issues. Sarah Joestl (SFS ’05), who receives Pell Grants, said that she was glad the president had proposed increased caps for the awards, especially given the increasing costs and fees of attending college.

“We spend so much money on military and other expenditures that it’s about time they spend more on students,” Joestl said. “Tuitions are rising all the time, so it has to keep pace with that, I think.”