Pell Grant cuts to decrease student aid

Freshman Alyssa Reed received a $1,300 Pell Grant by simply filling out her annual FAFSA form.\nJust like that.\nUnder a new reconfiguration of the Pell formula slipped into a congressional bill two days before Christmas and passed into law shortly thereafter, Reed's grant now could decrease.\nJust like that.\nReed is one of 4,626 -- equaling nearly one in six IU-Bloomington undergraduates -- who currently receive a federal Pell Grant, which does not have to be repaid to the government at the culmination of the college. She is again filling out a FAFSA form, this year with that money on her mind, after the Department of Education announced the new formula that could cause an estimated 80,000 to 90,000 students to feel a cutback or to sustain complete elimination from the Pell program nationwide.\n"It is a concern since I am paying my way through school, and my parents cannot really help me very much," Reed said. "I could always go to loans (if the Pell Grant isn't renewed), but I'd rather not."\nThe government awarded nearly $12 billion to 5.3 million students nationwide in Pell Grants for the 2004-2005 academic year. IUB received roughly $12.8 million of that, with the average student obtaining $2,700, according to numbers released from the IU Office of Financial Aid.\nVice Chancellor of Enrollment Services Don Hossler said the cuts are disappointing and a symptom of an overall problem with funding the Pell Grant program.\n"Although the cuts are not as serious for IU students as has been suggested in the larger media, this remains a step backward," Hossler said. "It's bad public policy. Period. At a time when college costs continue to increase, this is one more instance where Congress and the president have really failed over many years in an effort to keep up funding with the cost of living let alone the cost of college."\nPell Grants, created in 1973 by former U.S. Sen. Claiborne Pell, D-R.I., range in value of $400 to $4,050. They are intended for use by undergraduate students pursuing their first degree. \nThe grants are determined by calculating a student's estimated family contribution to help pay for college costs. The old formula for calculating a student's EFC uses data on income and state and local taxes from 1990. An update is required by law, and the recalculated version will use data on income and on state and local taxes from 2002 -- generally lower than 1990's numbers -- to figure a family's expected disposable income \navailable for college tuition.\nBush administration officials told The Washington Post that the poorest students, who receive the maximum Pell amount of $4,050, will remain unaffected from the reconfiguration. They also said the new formula will save the government at least $300 million in the 2005-2006 academic year.\nSusan Aspey, spokeswoman for the Department of Education, also told the Post that most of those expected to lose eligibility next year are students at the upper margin who receive the smallest grant possible.\nIn theory, although those who receive Pell Grants at the higher end of the bracket could be ineligible next year, more lower-income graduates should be able to apply and offset the difference. Actual results and news informing students who and who has not been affected by the reconfiguration will not be available until FAFSA forms are considered for the next academic year.\nHossler said he didn't know when IU students will see the impact or how many students could possibly be affected by the new decision.\nTerry Hartle, senior vice president of the American Council on Education, told the Post the new formula would have a modest but noticeable impact on a very large number of low- and middle-income students.\n"I don't think it means they won't go to school," Hartle said. "But they will borrow more money on credit cards, work longer hours or take fewer classes."\n-- Contact Senior Writer Tony Sams at ajsams@indiana.edu