Students who receive need-based financial assistance may breathe a sigh of relief when they hear of an increase in the amount of their federal financial aid awards over the next two years.
In an effort to stimulate the economy, President Obama signed the American Recovery and Reinvestment Act of 2009 in late February, which will provide for an additional $17 billion in financial aid awarded to students by the federal government in the form of Pell Grants in the 2009 and 2010 fiscal years.
Pell Grants are awarded to eligible students who demonstrate a significant financial need based on the information they provide on the Free Application for Federal Student Aid.
Ronald Johnson, Director of the UCLA Financial Aid Office, said the legislation would increase the maximum amount awarded to each student from $4,731 to $5,350.
He said the Pell Grant is an entitlement program, meaning all those who are qualified receive aid.
Most students who qualify come from families with incomes of less than $40,000 a year, Johnson said. Current federal spending for Pell Grants is $16.2 billion and 6.1 million students participate in the program, according to the U.S. Department of Education Web site.
Lucia Tejeda, a fourth-year Spanish student, is just one of the students receiving this financial aid.
“As a financial aid recipient, it’s really greatly appreciated,” she said. “Especially as a first-generation college student, my parents don’t have that education or the jobs to support us.”
Tejeda said she believes increases in financial assistance will encourage more students to pursue degrees at four-year universities.
“By ensuring that higher education is affordable and accessible for all our young people, we will make certain that our nation is prepared to compete in an information-age economy,” said U.S. Secretary of Education Arne Duncan in a statement on the U.S. Department of Education Web site.
Johnson said Pell Grants are currently awarded to 9,047 students at UCLA, which is roughly 34 to 36 percent of the undergraduate student population.
He said Pell Grants have historically seen little or no increase on a year-to-year basis. Usually the money would stay at a steady state or there would be very marginal increases, sometimes as low as $50 per student, Johnson said.
Brian Le, a third-year biochemistry student, said he believes a $500 increase can go a long way.
“I feel like that would cover the cost of textbooks for two quarters, and it would ease the burden on parents and kids alike,” he said.
Le said he believes the act is a step in the right direction and will help offset rising tuition costs, but the gains will be short-term and will require debts to be paid at a later date.
“It’s pretty much a gamble from the government,” he said.
Jared Schwalb, a fourth-year Middle Eastern studies student, said he believes future generations will have to pay back the debts later.
He believes the president has all the right intentions, but he doesn’t see how the plan is going to be sustainable.
“Where is (Obama) going to get the funding for it?” he said. “He’s going to make another social security-type program that’s not going to have a real future.”
But Johnson said he believes the act will have large-scale effects across the country.
“I think it’s something to very much admire and something that will have some very profound effects on changing the support for higher education in this country,” he said.
In addition to increasing funding for Pell Grants, the legislation will eliminate the bank-based Federal Family Education Loan program in favor of direct-lending programs.
Johnson said UCLA is part of 75 to 80 percent of schools which use the FFEL program to administrate these loans to their students.
Though the FFEL program has been attractive because lenders have been able to provide attractive borrower-lender benefits for students, this is not the case now because of recent credit crunch and liquidity issues in the economic environment, Johnson said.
Johnson said though these changes will only be implemented over the next two years, he hopes that there will be continued support for legislation that increases student financial aid in the future.
“I think President Obama has set the tone for the vital importance and priority of higher education and has brought that to the forefront as no other president has in the past and hopefully that will be mirrored in future legislation,” he said.