Posts Tagged ‘pell grant’

Proposed Pell Grant Cuts: Will They Seriously Affect College Students?

Monday, March 21st, 2011

Lawmakers in the House of Representatives levied a $5.7 billion cut to the Pell Grant program, which provides aid to low and moderate income students. The changes, if passed, would take effect in the 2011-2012 school year. The amount of aid for the most needy students would decrease from $5,500 to $4,705, a difference of $845.

If the bill becomes law, over 9 million students will have a reduction in their federal funds. Also, approximately 1.7 million students who receive small Pell Grants will likely be made ineligible. Approximately 27 percent of U.S. college students currently receive Pell Grants. The primary cut to the Pell Grant program would be the year-round provision which allows recipients of the grant to receive more than one per year.

In general, the most needy students are barely able to pay their bills, and losing $845 a year would be a significant loss to them. These students will be forced to take out bigger loans. Pell Grants have allowed many part-time students to attend college on a full-time basis. A reduction in the Pell Grant may force some of these students to return to their part-time status.

Many students will be forced to work longer hours, which may decrease their study time and affect their grades. Other students may decide to pass on a bachelor’s degree and instead go for a less expensive associate’s degree from a community college. Pell Grants are also provided to working low-income adults who want to go back to school to specialize in something. These folks may decide to skip college altogether.

Some colleges and universities will find ways to make up for the loss in Pell Grant funding. For example, Thomas McWhorter, the Executive Director of Financial Aid at the University of Southern California, said his office would use other university need-based aid to fill gaps caused but cutting Pell Grants.

An article at the Chronicle of Higher Education website stated that the spending bill for the 2011 fiscal year, passed by the U.S. House of Representatives, would not only slash Pell Grants in the short term, but would also reduce funding of the program by $64 billion over the next decade (according to the Congressional Budget Office).

Rep. Virginia Foxx, a Republican from North Carolina, said, “It’s hardly a devastating cut when you are cutting such a small amount.” However, according to a report from the Advisory Committee on Student Financial Assistance (ACSFA), the cut in Pell Grant funding will reduce the number of low income students obtaining bachelor’s degrees each year by approximately 61,000.

If this bill is passed, there will be a lot less money available for college students in need. This would make looking for scholarships and other sources of funding all the more important.

Wes Harrison writes helpful articles about a variety of college topics for New Jersey Colleges.

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How to File the 2011-12 FAFSA

Tuesday, January 11th, 2011


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Paying for College

Thursday, July 2nd, 2009

The last week has brought about a number of different items of news related to how we pay for college.  I just wanted to take this opportunity to summarize some of the key changes:

  • The Obama administration has made it a priority to increase access to a college education.  To date, they have increased the size of the Pell grant, planned to modernize the Perkins Loan program, and offered the American Opportunity Tax Credit, a $2,500 tax credit each year for four years of college.  There most recent efforts have been aimed at simplifying the FAFSA.  The online FAFSA no has improved programming to make it possible to skip more of the unnecessary questions.  They are also working with the IRS to allow students to seemlessly retrieve relevant tax data.  This will be available in January of 2010 for students applying for aid for the Spring semester.  They hope to expand that program.  To read more about the changes, view this post on the Department of Education web page.
  • As of July 1 the interest rate on Subsidized Stafford Loans dropped to 5.6%.  Unfortunately, over the past month more lenders have dropped out of the program, the Connecticut Student Loan Foundation being one of the most recent casualties.  Also as of July 1, students who owe on FFEL program loans are now eligible for Income Based Repayment (IBR).  Visit the department fo education website to learn more about this program. View this document to learn more about Loan Forgiveness for Public Service Employees, and view this document to learn more about Loan Forgiveness for teachers.
  • Finally, this post on the Choice College Blog talks about how scholarships are becoming more difficult to find.  We are currently updating the database of college-based merit scholarships on collegetreasure.com and we have noticed that while some colleges are becoming more generous in these tough times, many colleges are actually reducing the size and number of their scholarships.  This as tuition continues to rise, and while this past year it rose at the lowest rate in almost 40 years, it is still outpacing inflation, so you would naturally expect scholarships to increase to cover that increased tuition.  There are still opportunities out there, we just recommend that students start looking for them earlier.  Now more than every it is critical that you have a financial safety as well as an admissions safety.

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