When President Bush announced last week his proposal to increase Pell Grants by 33 percent over the next five years, educators and lobbyists were concerned the funding for this would coincide with cuts to other education programs.

And as it turns out, the unprecedented increase to Pell Grants is coupled with a proposal to cut lender subsidies and eliminate the Supplemental Educational Opportunity Grant and Leveraging Educational Access Partnership programs.

SEOG is a grant for students who demonstrate extreme financial need and is meant to subsidize Pell Grants, which are offered to low-income students. LEAP is a $64.5-million program through which the federal government provides matching grants for states’ need-based aid programs.

According to the Chronicle of Higher Education, LEAP has been set for cuts before and its elimination is not likely to get through Congress.

The budget also includes a $18.8-billion cut to federal subsidies for lenders, which have seen funding decreases now for three years in a row.

U.S. Secretary of Education Margaret Spellings said in a statement that the subsidy cuts were unlikely to harm lenders. Under-Secretary for Education Sara Martinez Tucker said only “a small percentage of subsidies pass through to students.”

But some lobbyists said the cuts would have an adverse affect on lenders, which would in turn mean students would have less options when applying for loans.

“Student lenders cannot sustain cuts of this magnitude,” Joe Belew, president of the Consumer Bankers Association, told the San Francisco Chronicle.

Danny Katz, organizing director for the California Public Interest Research Group, pointed to some of the positive elements of the budget.

He said the budget demonstrated a more efficient loan program, and the increase in the Pell Grants was evidence of a bipartisan acknowledgement on behalf of the Republican Bush administration and the Democratic Congress of the importance of the grants, and more broadly, an effort to invest in college education.

“There truly is, for the first time, just bipartisan support for increasing the Pell Grant, and we haven’t seen that in a while,” he said. “That’s a great sign.”

But Katz said he is concerned about the budget because the increase to Pell Grants would not help alleviate student need – which he said amounts to a total of $31 billion that is not met with financial aid – as long as those hikes are matched with cuts in other areas of education funding.

“They’re taking money from one student and giving it to another,” he said. “The problem is that we need to get at this $31 billion in unmet need, and you can’t get at that if you are just reshuffling money from one loan program to another.”

Tina Park, the Undergraduate Students Association Council external vice president, said she is particularly concerned about the proposed cuts to the LEAP program, which contributes funds for Cal Grants.

She said she expects the cut to LEAP could mean the amount of funding available for Cal Grants could be cut in half.

Park said it was this potential decrease in Cal Grant funding that would hit closest to home for students.

“They’re absolutely instrumental in keeping students in schools,” she said.