Though the proposed federal budget provides for an overall
increase in financial aid for higher education in 2006, individual
students may experience a decrease in their financial aid package
in the coming year.
The maximum award for Pell Grants will increase by $100 next
year while other programs, like Perkin’s Loans, will be
decreased or eliminated under the 2006 federal budget proposed by
President Bush on Monday.
“I think the budget is going to create some problems for
students at UCLA since a fair amount of our low-income students do
get Perkin’s Loans at a very low interest,” said Ronald
Johnson, UCLA director of financial aid.
The proposed federal budget allows for an annual increase of
$100 for the maximum Pell Grant award for each of the next five
years.
The budget also proposes $4.5 billion in funding to pay off
deficits incurred by the program in past years.
In part to pay for the funding for Pell Grants, Perkin’s
Loans will be eliminated.
The government budget allocates for over $1 billion in
Perkin’s Loans in 2005.
UCLA received $606,000 in funds for Perkin’s Loans last
year, but gave out close to $11 million to students due to the
redistribution of payments received for older Perkin’s Loans,
Johnson said.
Third-year biochemistry student Lena Niuniava, who receives both
Pell Grants and Perkin’s Loans, said she is not yet certain
how the proposed budget will affect her, but it looks like she will
have to contribute more money to her student fees.
“It looks like I’d be paying a lot more interest in
the long run,” Niuniava said.
Second-year undeclared student Kim Nguyen said she will take out
other loans to make up for the elimination of the Perkin’s
Loan.
“I’m not going to drop out of school or anything,
but I’m pretty sure other people will have a lot of financial
problems. A hundred dollars doesn’t compare to what you get
with (Perkin’s Loans),” Nguyen said.
Johnson said there is also concern that the government might
recall all of the Perkin’s funds held at institutions, which
would include the amount colleges collect from past loans, and
redistribute them to other students.
Another program to be cut under the budget is the Leveraging
Educational Assistance Partnerships, which provides federal funds
equal to the amount the state provides in grant programs to help
financially needy students.
But in order to help students, the budget also calls for higher
loan limits, a more flexible repayment plan, and increased funding
for other loan programs such as the Federal Family Education Loan
and the Federal Direct Loan.
The net increase in federal funds for aid under the budget is
due in part to the creation of new programs that will not affect
most UCLA students.
A new Presidential Math and Science Scholars program for
low-income students studying the math and sciences and new Loans
for Short-Term Training will be created. $11 million in funds for
that program will be allocated to older workers or students for
short-term training programs teaching job-related skills.
Johnson said that though UCLA serves a large amount of
low-income students, it may receive less funds because of a
possible revision of the allocation formula of federal aid.
A new formula for funding would better reflect the amount of
low-income students that institutions serve.
“More institutions such as trade and vocational schools
will be considered, so we will probably see shifts in money because
there is only so much to go around,” Johnson said.
The proposed budget also shifts close to $2 billion in funding
to help high school students and pay for the extension of “No
Child Left Behind” to high schools.
“The budget has a reducing aspect to it for higher
education. With all the emphasis put on “˜No Child Left
Behind’, I wonder if there is going to be funding for those
kids when they reach college age,” said Johnson.