Corporate, Domestic, For-Profit, Investors, Legislation, Minorities, equity, and access, Not-for-Profit, Required, Student Loans, Students, University & College - Written by Wired Academic on Tuesday, October 4, 2011 6:00 - 0 Comments
U.S. House Eyes Cuts To Pell Grants For FY 2012
Reuters reports that the U.S. House of Representatives is proposing a cut in some federal student aid funding in Fiscal 2012, which could hurt for-profit colleges. The Labor, Health and Human Services Funding Bill proposes major cuts to Pell Grant funding, which goes largely to low-income undergraduates. The reduction would be about 7% of total estimated Pell Grants received in FY 2011, according to a BMO Capital analyst. We’ll keep an eye on this legislation. Here’s what Reuters’ reported:
The proposal, which was released late Thursday, seeks to stop Pell Grants for students attending school less than half time and for students who do not have a high school diploma.
Cutting Pell Grants would negatively impact the for-profit schools, where a majority of students are in the low-income category.
Colleges like Corinthian Colleges, Lincoln Educational Services and Career Education are the most exposed to these students, compared with other schools in the post-secondary education industry.
Though news of the cuts upset post-secondary stock prices, it is far too early in the process to discount what Budget will be passed given the political conflict in Washington, said Trace Urdan, an analyst with Wunderlich Securities.
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