Effects of Financial Aid Cuts Warrant Attention
February 24, 2011 Leave a comment
by Josh Travis
Both the House of Representatives and President Barack Obama have recently proposed national budgets that include future cuts to the Federal Pell Grant Program. The House’s bill would affect the 2011-2012 academic year, while the bill proposed by President Obama would affect the 2012-2013 academic year.
The Pell Grant is a federally mandated program that awards college students who demonstrate particular “financial need” with assistance to help them cover the cost of attending college. Currently, the maximum Pell Grant award that a student can receive stands at $5,550. According to Dave Cecil, Transylvania’s associate vice president for financial aid, about 25 to 26 percent of Transy students currently receive Pell Grants.
The House’s bill proposes to reduce the maximum Pell Grant by $845 to $4,705. The bill has passed the Republican-controlled House, but according to an article published by the National Association of Student Financial Aid Administrators, “the bill has little chance of passing in the Democrat-controlled Senate.”
According to Cecil, it is too early to determine if this is something Transy students should worry about.
“The Senate is not in session this week and we are awaiting its reconvening next week to see what the sentiment is towards the House bill. … We’re hopeful that this proposed cut may be reduced,” Cecil said.
In regards to other types of federal financial aid, Federal Direct Stafford and PLUS Loans and the federal work-study program would not be affected under this proposed bill.
Overall, the bill would decrease education spending by $10.6 billion, more than 15 percent.
The budget proposed by President Obama, on the other hand, would maintain the $5,500 maximum Pell Grant award. However, this particular proposal would eliminate students’ ability to receive more than one Pell Grant per year, one for the regular academic year and one for summer classes.
According to Dr. Don Dugi, professor of political science, such a change would be unlikely to affect many Transy students given the low enrollment in summer classes at the university.
“That’s going to bother places like the University of Kentucky a lot more than us,” Dugi said.
President Obama’s bill also targets federal financial aid for graduate and professional school students.
Currently, the government pays the interest accrued on federal loans for graduate and professional school as long as the student receiving the loans is still in school. If the proposal passes, this policy will be eliminated, and federal loans would begin accruing interest while a student is in school. However, the student would still not have to begin making payments on the loan until he or she has graduated.
As for the House bill, students will have to wait and see how the bill pans out over the next few weeks, Cecil said.
“I hope the picture is a lot clearer by the week after spring break,” he said.
Cecil urges students to monitor the media for updates over the coming weeks. The Rambler will follow this story as it progresses.