What proposed Pell Grant cuts could mean to the MN State Grant

Amid today’s talk of a shortfall in the Minnesota State Grant program, state Office of Higher Education officials warned state House members of a potential loss of at least $113 million in federal Pell Grant funding to Minnesota students through a proposal by Republicans in the U.S. House of Representatives.

And that’s something that Minnesota might have to consider making up in 2012 if the state wants to maintain overall aid to students at current levels.

If the U.S. House proposal goes through, “it will be a very significant shortfall,” Meredith Fergus, policy analyst at the Office of Higher Education, told members of the state House higher education committee..

I talked to Mark Misukanis, the office’s director of fiscal policy and research, after the meeting. He was blunter, calling the scenario potentially “catastrophic.”

The GOP has proposed cutting the maximum Pell Grant by about $845. (The average Minnesota State Grant is about $1,624.) The way the system works, if Pell Grant awards decrease, the State Grant award usually makes up the difference.

Much is still in play politically, and it’s difficult to say how the cut would affect individual students.  Doing very rough calculations, Misukanis estimated that the gap might mean students’ contribution to their higher-ed costs might have to jump from 46 percent to 65 percent.

“I don’t even know how to think about it,” he said. At some point, “the program kind of falls in on itself. We’ve got to keep our eye on it.”