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Next cuts could hit college aid

13.08.11

Some rancorous debate in Congress over the next few months could have big consequences for college students &#x97; and plot the course for future higher education funding.</p><p>Congressional budget cutters are likely to tape a big bull&#x92;s-eye squarely on the back side of the federal Pell grant program, which for the last 40 years has provided bedrock funding to make college more affordable for low- and middle-income students. It&#x92;s a big-ticket program, so Pell grants make an inviting target. </p><p>More than 9 million students rely on Pell grants, which provide a maximum of $5,550 a year, to cover some college costs. </p><p> The grant money doesn&#x92;t require repayment, but it now covers less than a third of the cost of attending a four-year public college, compared with more than half a couple of decades ago. That&#x92;s the smallest share in the history of the program, according to the Institute for College Access & Success, a nonprofit that promotes making college more affordable. </p><p>After weeks of threatening proposals, Pell grants barely avoided deep cuts in the debt agreement.</p><p>Congress rewrote some of the rules regarding student loans. The agreement allocated $17 billion for Pell grants for the 2012 and 2013 fiscal years, but it eliminated an interest payment subsidy that largely benefited graduate students and removed an incentive for making prompt loan repayments. </p><p> However, the clock is still ticking for Pell grants. </p><p> For one thing, the program faces a $1.3 billion shortfall in fiscal 2012, according to Mark Kantrowitz, publisher of the Fastweb and FinAid student loan websites. Congress might address the Pell shortfall by making further cuts in other student aid, Kantrowitz said.</p><p>However, he said, &#x93;the most likely scenario involves changing the eligibility requirements for the Pell grant program,&#x94; including reducing the number of semesters the funds would be available for a student.</p><p>The upshot: While the maximum $5,550 award may remain, don&#x92;t expect to see increases in Pell grants or other federal student aid programs for the next decade, Kantrowitz said.</p><p>Don&#x92;t get me wrong &#x97; there&#x92;s only so much money to go around. But it seems so wrong to make further financial aid cuts when the cost of attending many two-year and four-year public and private colleges has never been higher. To say nothing of how we&#x92;re supposedly trying to become more competitive in the global educational marketplace. </p><p> If the Pell program is weakened, the final tab shouldn&#x92;t be measured just in dollars, but in opportunities lost by students to get a college education. Parents, be thinking about a Plan B to cover college.

Source: Kansas City Star