Major advances for young people in financial aid and health care legislation shouldn’t be significantly affected by Republicans gaining control of the U.S. House of Representatives and adding seats in the U.S. Senate, according to local experts and University officials.
Instead, those experts said the political shift will increase the need for compromise between the parties on some of the most pertinent legislation pushed by President Barack Obama and his administration. They added that Republicans will resist significant changes to recently passed financial aid and health care legislation, largely because a repeal of these bills requires the use of more federal funding.
Cindy Bank, assistant director of the University’s government relations Washington D.C. office, said she doesn’t anticipate that Republicans will try to reverse financial aid legislation enacted by the Obama administration, including the Direct Loan Program, which provides funding to students directly from the government and bypasses the use of private institutions.
“I don’t foresee the Republicans trying to undo the direct loan provision because that would cost money,” Bank said. “And right now they’re looking at ways to cut the budget, not increase the budget. And overall, the switch to direct lending has been going very well.”
However, Banks said it is possible that Republicans in Congress will cut down on the increased funding for Pell Grants established by the Obama administration. She added that the funding could become less available to students in an effort to offset the nearly $6 billion that the grants contribute to the national deficit.
“The Pell Grant is a funny sort of program on how it’s funded, because it’s basically an entitlement,” Bank said. “And so, if a student qualifies for a Pell Grant they’re going to get it, whether the money’s been appropriated or not. And that leads to a shortfall sometimes, especially recently, when there’s so many more students in school and so many more students in need.”
Mark Kantrowitz, publisher of finaid.org, a financial aid information site for students, said he believes that Pell Grant rates and financial aid appropriations will most likely remain stable, which will generate difficulties for students as college tuition continues to rise.
“The general trend that I’m expecting is the national Pell Grant is going to be stagnant, so it is not going to be keeping pace with the increasing of college costs,” Kantrowitz said. “We’re going to see very sharp increases in college tuition without corresponding increases in federal grants. College is going to become less affordable for low- and moderate-income students.”
Kantrowitz said he foresees that in addition to a decrease in graduation rates, the increase in college tuition will lead to a national downward shift in student matriculation in four-year institutions as they switch to more affordable alternatives.
“It is in turn going to cause low- and moderate-income students at an increasing rate to switch from four-year institutions to two-year institutions, and from non-profit institutions to public institutions,” Kantrowitz said. “So we’re going to see declines in bachelor’s degree attainment as a result.”
Kantrowitz added that while the future of legislation in Congress is uncertain, he sees the Republicans grappling with the choice either to attempt to block progressive legislation or to attempt to compromise in order to prevent “being seen as obstructionist.”
“I think there’s going to be a lot of resistance to anything that spends more money,” he said. “The difference between Democrats and Republicans is not that one party really exercises fiscal restraint, it’s really rather that the Democrats spend money on programs while the Republicans spend the money on reducing taxes.”
He continued: “I think given that we have record budget deficits, it’s going to be very difficult to see any increases on spending on federal student aid and certainly not any kind of bold increase.”
Kantrowitz also said he doesn’t foresee any change in recently established federal health care legislation that applies to students, like the Affordable Care Act, which extends coverage to individuals up to age 26 under their parent’s health insurance plans. He said he believes this is because young people tend not to have serious health issues that lead to the use of government resources.
“I don’t see them rolling health care back,” Kantrowitz said. “The 26-year olds generally don’t have very many health problems. It’s a way of reducing the risk of the insured pool. And certainly it increases the cost of the insurance, but they typically will pass it on to the consumers indirectly so I don’t see that changing.”
Mike Boulus, executive director of Presidents Council, State Universities of Michigan, said student aid legislation within the state may face complications, since Michigan is dealing with a nearly $2 billion deficit for the 2011 fiscal year, nearly 25 percent of which includes higher education costs.
“Without a new tax structure and new revenue, we’re looking at possible severe cuts and higher education could be among the victims,” Boulus said. “And if the state continues to disinvest in the institutions, and we want to maintain the high standards of quality education, particularly at University of Michigan, something has to give.”
Boulus said while the University has been efficient in budgeting in some sectors, it still can’t prevent the imminent future increase in tuition.
“Some of it is about that cost containment stuff which I think University of Michigan has really excelled at, but at some point its tuition is going to continue to rise, which means the need for more student financial aid,” he added. “That’s the vicious cycle I think we find ourselves in.”