Last year LSA junior Jessica Somerhausen lost the $2,000 grant she had been using to pay her University tuition last year, leaving her with loans to finish her college career.

Beth Dykstra
LSA junior Jessica Somerhausen looks at her loan information on Wolverine Access in her apartment yesterday. She lost the Pell Grant her freshman year. (Shubra Ohri / Daily)

“It was a pretty bad scenario for my mother,” Somerhausen said. “Her salary increased a lot, but (the cut) was a pretty substantial amount.”

Her mother’s salary increased enough that the federal government determined Somerhausen was no longer eligible for a Pell Grant.

Many students will find themselves in a similar situation soon when the Department of Education recalibrates its eligibility formula.

The new formula, set forth by the Bush Administration, will increase the amount received in a Pell Grant but will decrease the number of students who qualify for them.

The department said that it will most likely determine that about 80,000 to 90,000 students’ families are earning too much to receive grants. But unlike Somerhausen, the students who have their grants cut will be the ones who receive the smallest grants of $400.

Another 1.3 million students may see their grants reduced by $100 to $300, according to a preliminary analysis of the changes by the American Council on Education.

After making these cuts, the Department of Education expects that many new students will be able to receive grants next year, resulting in an estimated net increase of 25,000 students receiving Pell Grants.

Pell Grants are need-based awards given to undergraduate and some post baccalaureate students by the federal government. Eligibility is primarily determined by a family’s disposable income — which is the amount left over after taxes. On average, families with children that receive Pell Grants make an average of $35,000 a year, according to the Department of Education.

The current eligibility formula uses state and local tax rates from 1990 — which in most states were higher than they are now — and as a result artificially depresses the estimated disposable income. The new formula will use 2002 tax data and as a result will likely show that families have more disposable income available for tuition, resulting in cuts in financial aid for some.

Despite an estimated net increase in the number of grants awarded next year, Pamela Fowler, the University’s director of financial aid, said she is opposed to the new formula because some students will lose their grants.

“I don’t like to see anyone’s grant cut for any reason,” Fowler said. “Just because they’re cutting them doesn’t mean (the families) have the money.”

Fowler also said those losing the smallest grant may have to work and borrow more or take a lighter course load.

It is too early to know approximately how many students will receive Pell Grants after the changes are made.

Some students who already receive financial aid said making ends meet can be tough.

“It’s definitely difficult because on top of school you have to work,” said LSA sophomore Chelsea Malter, who is using loans to help pay for college. Malter said she did not believe the increased number of Pell Grants would help because her family makes too much money to be eligible for the grants. She added that assistance with rent payments and other expenses would help make things easier.

However, the size of the largest grants may increase if President Bush gets his way with Congress. In an address to Florida residents last week, Bush said he would push to increase the size of the largest grants, as part of his plan to expand the program.

“Pell Grants make it possible for people to go to school who otherwise won’t go to school,” Bush said. “We want to increase the Pell Grants by … $100 per year over the next five years.”

Congress responded to the president’s $823 million budget request for Pell Grants last year by allocating $400 million to the program. In his 2000 election campaign, Bush pledged to bring the maximum grant allowance to $5,100. So far, the administration has fallen short of that goal, raising the maximum from $3,300 four years ago to $4,050 today. Since 2001, the administration has helped add 1.3 million new students to the program.

The Pell Grant payments have seen explosive growth since they were first awarded in the 1970s, with one-third of all college students currently receiving them. The financial pressure on the program is expected to intensify when the United States graduates its largest high school class ever in 2008.

 

Leave a comment

Your email address will not be published. Required fields are marked *