New Formula May Endanger Pell Grant Awards
Eighty-four thousand students will lose eligibility for Pell Grants in the 2004-05 academic year if a recent change to the federal government's formula for calculating financial aid eligibility is allowed to take effect, the Congressional Research Service estimated in July. But lawmakers may block the changes.
The research service, an agency of the U.S. Congress, used figures supplied by the U.S. Department of Education to make the estimate. The formula calculates how much money families can afford to contribute to each child's education. The education department made changes in May that lowered the amount forgiven for state and local taxes paid, making many families appear to have more money available to pay for college costs than they really do.
In addition to the 84,000 who would lose eligibility for Pell Grants under the new formula, hundreds of thousands more students would likely have their Pell Grants reduced, financial aid experts estimate. Because the federal formula is used to make decisions about how federal, state, and institutional aid is distributed, the change would also affect student eligibility for these kinds of aid.
The Department of Education does not dispute the numbers involved, but it is at odds with many observers about the importance of the changes. The department notes that the overall amount of federal spending on higher education continues to rise. Because both the number of college-age individuals and the percentage of low-income families sending students to college are rising, the number of Pell Grants awarded is also projected to rise. A department spokesperson told the Washington Post in June that the new formula changes would have "a minimal impact on a handful of students."
Speaking to the New York Times, Brian Fitzgerald, director of the Advisory Committee on Student Financial Assistance, a group created by Congress to provide advice on higher education, disagreed. "It's pretty hard to call several hundred thousand students a handful," Fitzgerald said.
Members of the U.S. Senate concurred, and in September the Senate approved an amendment to an annual spending bill that prohibits the Department of Education from enforcing the formula change. If the House of Representatives agrees to the amendment, the spending bill can be submitted to the president for his signature.
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