Student financial aid may be the latest addition to the casualty
list attributed to the country’s economic troubles. A change in the
Department of Education’s Expected Family Contribution formula
would reduce the nation’s award programs beginning in 2004, thereby
completely preventing many students from receiving monetary aid for
college.

The amendment to the EFC formula has made obtaining grants more
difficult for undergraduates. According to a new report by the
Congressional Research Service, the adjustment to the EFC formula
will cause the primary source of student financial aid, the federal
Pell grant, to be reduced by $270 million, meaning hundreds of
thousands of students will receive smaller grants. This number does
not take into account the reduction of approximately 84,000 college
students that will no longer be eligible for the federal Pell
grants. The figure also does not consider the future curb in awards
once the formula is applied to the rest of the billions of dollars
set aside for state and university contributions.

The modification to the EFC formula came as a result of the
Federal Need Analysis Methodology, which uses the most recent IRS
data to decide on the equation representing a family’s ability to
pay for college. The difficulty is that the most recent IRS data is
three years old and would be better fit for an economy that is not
in such a meager state. Thus, the new formula cannot accurately
reflect the capability of an applicant’s family to pay for college.
Furthermore, at a time when students already cannot afford the
costs of college, money is hard to come by and tuition is
relentlessly on the rise, the loss of financial aid for so many
students is more than uncalled for — it is backbreaking.

Another problem arising from this change is the effect it will
have on other levels of financial aid. The New York Times reports
that its consequences will not only include the immense decline in
the number of students who are eligible for federal awards, but
will also increase “the reliance on loans to pay for college.” As a
result of the requirement to apply for unappealing loans, many
students could become dissuaded from entering college and might
instead attempt to enter a job market already strained by a high
unemployment rate.

With the economy in such a fragile state, college is becoming
unaffordable for many Americans. This is a shame. Creating a more
educated population has proven to be excellent economic policy. The
passage of the G.I. Bill following World War II enabled a
generation of Americans to obtain a college education, leading to
the great economic prosperity the country experienced following the
war. The country will only pay down the road if it does not
dedicate itself more fully to the goal of allowing every American
who wants to attend college the opportunity to do so.

Because this policy seems so ill conceived and heartless, it may
seem as if Congress would strike down the changes. Unfortunately,
the Department of Education’s planned adjustment to the EFC formula
and ensuing aid reduction does not require Congressional
approval.

Fortunately though, there is hope for students. News of the
alterations has caught the attention of Congress as a disguise for
cutting education spending. Many members of Congress are working to
prevent the changes from being implemented. The financial
devastation arising from the new rule could be prevented if
legislation is enacted to modify the changes. Congress should pass
legislation preventing these changes from taking place.

Leave a comment

Your email address will not be published.