Bush plan would raise grants to low-income students

The budget President Bush proposed Monday would increase federal grants to low-income college students by 33% over five years and pay for it by reducing subsidies to private lenders. The Bush plan calls for raising the maximum Pell grant, which hasn’t been increased since 2003, to $5,400 from $4,050 over five years. To offset the cost, the administration proposes reducing interest-rate subsidies to private lenders by half a percentage point. The reduction would save the government an estimated $12.4 billion over five years, the Bush administration said.