Paying for college just got harder
One education publication dubbed it the "December surprise": Two days before Christmas, the Bush administration announced it was revising the formulas for its Pell Grants - the federal government's primary aid vehicle for America's neediest college students - in a way that may leave 1.3 million students receiving a smaller amount, and 90,000 off the rolls altogether.Skip to next paragraph
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The reality, of course, is a bit more complicated. The change was mandated by law, and updates the formula to rely on 2002 tax rolls instead of 1988 ones. The neediest students should remain unaffected, and the money saved opens up at least the possibility that the maximum amount of the grant could eventually be raised from $4,050, long considered inadequate by many education advocates.
But the fact that, at a time of economic hardship, the country is tightening one of the few extensive grant programs available to low-income students raises broader questions about college affordability - and whose responsibility it is to make higher education a possibility. A vast majority of students relies on some combination of grants and loans to finance their education, and as the loan burden increases some are choosing to take fewer classes, forgo a four-year education, or skip college completely. The Pell Grant news is only one piece of a maze that's becoming increasingly tricky for many students to navigate.
"One thing that seems evident is that since the 1980s there's been a general shift in the public's and in policymakers' attitudes toward higher education, where they now believe it's an individual benefit instead of a societal benefit," says Ross Hodel, director of the Center for the Study of Educational Policy at Illinois State University. "That results in less government effort to help with higher education, and the feeling that the individual ought to contribute more. The old contract, where a student was paying roughly a third of the higher-ed costs, is now pretty much gone. Now the tuition-payer pays over half."
Since 1973, the Pell Grant has been the cornerstone of the federal government's student aid. Each year, millions of low-income Americans apply for assistance through the program. In 2006, according to the American Council on Education (ACE), it will provide $12.4 billion in grants - ranging from $400 to $4,050 - to more than 5 million undergraduates.
The changes will take effect next fall. Even with the revisions, the government estimates there will be about 25,000 more Pell Grant recipients than this year, simply because so many more students are applying. But some 90,000 students who would qualify under the current formula - mostly from families earning between $25,000 and $40,000 a year, according to ACE - may no longer get any money, and many more students will see their grants reduced by $100 or $300.
"It's what most of us would agree is a relatively inconsequential amount of money," says Brian Fitzgerald, staff director of the Advisory Committee on Student Financial Assistance. "But it's on top of an existing gap, and the effect in cumulative terms is much greater."
He and others worry about the "trickle-down" effect. Because many state-grant programs rely on the same tax formulas, the net change for some students can quickly become $1,000, instead of just $200 or $300. And even a few hundred dollars can mean a lot to some students, requiring them to work more hours, cut their number of classes, or enroll in a different type of college.