Thousands of students may experience a reduction or complete
loss of their Pell Grants next fall due to a new federal-spending
bill that will tighten eligibility requirements for financial
aid.
Under the bill that is expected to be passed by Congress, the
Department of Education will be able to adjust their eligibility
formula for calculating federal grants, which may potentially
reduce the number of students eligible for Pell Grants.
Despite protest from some congress members, the new spending
bill was passed through Congress last Saturday. But because the
Senate is now repealing an unrelated provision in the bill, the
bill is still awaiting official approval. The provision allowing
the adjustment to the formula change is expected to pass without
any changes.
“The bill will pass with the formula change which will
effect a lot of families who are working hard to send their
students to school,” said Daniel Kaufman, a spokesman for the
National Education Association.
Kaufman said an estimated 84,000 students with family incomes of
around $35,000-$40,000 may lose their Pell Grants due entirely to
the change and that over a million students could potentially lose
a portion of their federal aid.
According to the Advisory Committee on Student Financial
Assistance, the administration hopes to save an estimated $300
million because of the changes approved by the bill.
Federal financial aid is determined by subtracting the amount
students and their families are expected to contribute from the
total cost of attending college.
The expected family contribution has been traditionally
calculated after state and local taxes are deducted from the total
income of students and their families. The new formula will
decrease the amount of state and local taxes that is reduced by
using updated tax indexes. This will raise the expected family
contribution.
The changes that will potentially decrease Pell Grants come at a
time when college fees are increasing and more students are
eligible for government aid.
Ronald Johnson, UCLA financial aid director, said “the
changes will obviously create problems for students and make it
more difficult for them to finance their education.”
“Students will most likely have to borrow more money to
finance their education. This will compound the loan burden that
students are already experiencing,” Johnson said.
Kaufman said students may have to work more during school, cut
back on other costs or depend on private scholarships.
“Unfortunately, some students may have to take semesters
off or drop out of school entirely,” Kaufman added.
Johnson said another difficulty with the Pell Grant formula is
that the maximum amount of $4,050 has stayed constant while college
fees have continued to climb.
The Department of Education tried to adjust the formula last
fall, but was blocked by Congress from doing so.
Last year, Congress passed legislation that suspended the
formula for a year.
In a statement, Sen. Jon Corzine, D-NJ, who was responsible for
the blocking of the changes last year called the formula change a
“back door attempt to cut funding from the Pell Grant
program.”