Nearly unnoticed law to bring Pell Grant changes July 1
Published: Wednesday, June 27, 2012
Updated: Wednesday, June 27, 2012 00:06
July 1 will spell the end of federally funded Pell Grants for thousands of college students who don’t meet new requirements when the provisions of a quiet December appropriations law take effect.
For some students receiving aid, such as Marlton, N.J., resident Jolie Darrow, the law could affect their ability to attend school in ways that do not have a check box on financial aid applications.
“I am already extremely stressed about my financial future with all of the private loans I have now,” said the University of Maryland, College Park, junior government and politics major, who receives both federal grants and private student loans.
The bill, which passed both the Senate and House of Representatives in December with more than 95 percent of the votes in both chambers, will reduce the number of years a student can receive the grant from nine to six and limit the grant to high school graduates and those with General Educational Development certification (among new applicants, not enrolled before July 1).
At least 65,000 students applied for Pell Grants without a high school diploma, and another 63,000 have been working to receive their degrees for more than six years, according to the Association of Community College Trustees.
Additionally, the law will lower the maximum grant to $4,860 from $5,550 and will change the threshold for expected family contributions.
Before December’s bill, federal financial aid standards did not expect families earning less than $30,000 to contribute to their students’ tuition. That threshold is now at $23,000, meaning those families making more than $23,000 will now be expected to contribute something toward their children’s education.
In 2010, more than 8.4 million of those eligible for Pell Grants (roughly 76 percent of applicants) listed a family income of less than $30,000, according to the Department of Education.
Darrow’s family, which is expected to contribute more than $20,000 of her tuition, has experienced difficulties with debt following an illness and increased medical costs.
“I think that the standards used for the way the government allots financial aid - especially Pell Grants - is already unfair,” she said. “They base your aid on ... income instead of taking other important circumstances into account.”
In the House of Representatives, 411 of the 435 members voted for the new measures, included in the 2012 appropriations bill, along with 97 senators.
“We’re running into a situation in which the majority of decisions being made in higher (education) are because of budgetary pressures, and that’s really to our disadvantage,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “Budget deals are struck very quickly, very often behind closed doors and very often at the last minute.”
Six days after the Senate vote, on Dec. 23, 2011, President Barack Obama - an outspoken proponent of college affordability and higher education reform - signed the bill into law.
Obama, in addition to his re-election bid, has been campaigning to keep Stafford student loan interest rates from doubling. If Congress does not pass legislation to extend the current Stafford interest rate, which is set to expire in July, it will jump from 3.4 percent to 6.8 percent
“Barack and I talk about it,” Vice President Joe Biden said at a White House press conference on financial aid on June 5. “Neither one of us would have had any shot - the same with our wives.”
Both Darrow and Draeger said it is difficult to predict where things will go from here.
“If the government stops giving me low-interest loans, there wouldn’t be any tangible differences in the present, but it would mean I would need to take out more private loans and therefore would be stuck paying insane rates upon graduation,” Darrow said.
Draeger shared Darrow’s uncertainty, saying experts know as well as students how the changes will affect the student population.
“To be honest, it’s not entirely clear,” Draeger added. “We’re just finding out now, this summer, how this will play out with students.”
Pell Grants are named for Sen. Claiborne Pell, D-R.I., who sponsored legislation to offer need-based financial aid grants from 1972 to 1978, originally intended to be altered through five- or six-year reauthorization processes, not annual budgetary negotiations.
“We want lawmakers to tackle these issues in the right time and place, and that’s usually through a reauthorization process,” Draeger said.
And although the alterations could negatively affect some students, Draeger stressed the importance of contextualizing the changes.
“It could have been much worse in the current budget environment,” he said in reference to the varied and contentious approaches Capitol Hill has taken to address the more than $15 trillion of U.S. debt. “It’s not great, because less students are eligible ... but it could have been much worse.”
Distributed by MCT Information Services