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Pell Grants in line as next to be cut

The formula for awarding Pell Grants, the primary source of federal direct grants for student aid, is being revised for the first time in more than a decade.

The Bush administration has not given reasons for the change in formula.

While the outcome of these changes is not yet fully known, the Congressional Research Service (CRS) states that at least 84,000 students will no longer qualify for any assistance and an estimated 100,000 will receive less assistance.

Changes are scheduled to take effect for the academic year 2004-5 unless Congress finds a way to block them.

The existing formula is based on family income and allows a deduction for state and local taxes. This deduction, which varies from state to state, is being reduced.

The result is that family income will now appear higher, disqualifying some students and reducing grants to others.

An administration official was quoted in the Washington Post saying, “The changes will have a minimal impact on a handful of students.”

However, critics disagreed. Brian K Fitzgerald, director of the Advisory Committee on Student Financial Affairs (a committee created by Congress to advise it on educational affairs), was cited in the New York Times as estimating the number of students affected at more than 1 million.

The CRS report estimates total Pell Grant reductions will be $270 million for fiscal year 2004 but takes no account of the ripple effect such a reduction will have on state and university funding.

A number of lawmakers have noted that with tuitions rising and the economy in decline, reductions in student aid come at a particularly inappropriate time. “The department is wrong to turn its back on students and families,” said Sen. Edward M. Kennedy (D- Massachusetts), ranking member of the Senate’s Health, Education, Labor and Pensions Committee. “They need more financial aid for college, not less.”

At Shoreline, 1,234 students received Pell Grants totaling $2.6 million for academic year 2002-03, up from 992 students and $2 million the year before.

According to a spokesman for the Financial Aid Office, it’s too early to tell what effect the proposed cuts would have at SCC. The department believes the top eligible income category, which provides the lowest grant amount of $400 per year, may be eliminated.

Other effects would depend on family income level, how much the deduction for state and local taxes changes, and whether Congress is successful in blocking the new regulations.