Government to Cut Financial Aid- Esp Pell Grants

Parents Forum
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<p>“While the precise impact of the change is difficult to predict, budget officials at the department last year estimated that the revisions would have saved the program $270-million by making 84,000 students ineligible for Pell Grants.”
…
"Adjustments to the formula, which are supposed to occur annually, are typically made with little fanfare. But in May 2003, the Education Department caused an uproar when it announced plans to lower the amount it forgives most families for the state and local taxes they pay when determining how much income they have left over for college costs.</p>

<p>As a result of the proposed change, which was based on tax data from 2000, the families would appear to have more money available to pay those costs than they really did.</p>

<p>Department officials said at the time that they were making the formula change because they were required to do so by the Higher Education Act, the law governing most of the government’s student-aid programs. The 2000 tax information was the latest available, they said, adding that the department had not updated the data for more than a decade because it had not been able to obtain reliable figures.</p>

<p>Critics of the department’s plan argued that the tax information from 2000 was itself unreliable. The problem, they said, was that the figures predated recent budget crunches in many states and localities that had prompted them to raise taxes. As a result, the critics said, the new formula would not reflect families’ actual tax burdens. "</p>

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<p>I’m curious - is the tax information request the same thing that the Education Secretary is talking about in his testimony before the Education committee when he was talking about how using tax information could help identify the $300 million in Pell grants that were identified as given to students who did not really qualify for them? If so, is the question whether families are reporting income wrong or is it an issue of deducting state and local taxes from the formula? Anyone understand this better than I do? Because, in reading this, it sounds to me like we are talking about the same thing here - but it’s a matter of interpretation, are we cutting off people who are mis-stating their income qualification under pell grant standards or are we cutting off people who really do qualify? If the first, then aren’t we actually making MORE money available for the truly low income students who Pell grants were intended to help? I thought Pell grants were meant not to help middle class students but lower income students but perhaps I am mistaken. (I know that Pell grants made a difference in helping me as a VERY low income student make it through 4 years of college in the 1970’s.)</p>

<p>Here is the most pertinent excerpt followed by a link to the full report I’m talking about. </p>

<p>Mr. Diaz-Balart. Thank you, Mr. Secretary. Also, we keep
hearing about this and you have been emphasizing that the
debate shouldn’t be just on money, debate should be on results,
and I am encouraged by that, the statement and your actions. If
you look at the Department of Education’s budget, it is
basically two-and-a-half times larger than it was in 1996, when
the Republicans took control.
You mentioned Pell grant funding. It has just skyrocketed,
again, almost two and a half times greater than it was when the
Republicans took control in 1996.
The Department of Education Inspector General recently
identified over $300 million in Pell grants that were issued to
students who shouldn’t have qualified, who misrepresented their
income levels in their applications, et cetera. I know you have
been emphasizing that as one of your main issues, and the
President has. How is the Department taking action against
fraud, this sort of fraud, which obviously means that that
money is not available for others, or for increases in Pell
grants? What do you think you can do better or what are you
doing to try to eliminate fraud in Pell grants and other areas,
but specifically in Pell grants, when the Inspector General
identified $300 million?
Secretary Paige. Identifying fraud throughout the system
has been one of our priorities, and I have with me Associate
Deputy Secretary Todd Jones, who will comment on that, specific
to Pell grants.
Mr. Jones. One of the President’s proposals is to allow
what is called the IRS data match, which will allow the
Department to match what people say about how they qualify for
Pell grants against what they actually tell the IRS that they
have earned in a given year. Interestingly, it doesn’t
necessarily mean it is all people who are seeking or qualifying
for more Pell grants than that for which they are entitled, but
some who actually are entitled to more Pell grant than they
thought they were, based on that data. That requires action,
however, by the Ways and Means Committee to change the tax laws
to permit that, and so that is before the Ways and Means
Committee at this time.</p>

<p><a href=“http://frwebgate6.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=137997175599+4+0+0&WAISaction=retrieve[/url]”>http://frwebgate6.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=137997175599+4+0+0&WAISaction=retrieve&lt;/a&gt;&lt;/p&gt;

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<p>Interestingly enough, the same figure of $300,000,000 keeps popping up. It would not be THAT tragic if the articles quoted below did not date from 1993, at about the same time the laws that cause today’s criticism passed. </p>

<p>Does anyone really believe that the abuses have stopped? A figure of 10% of a budget that runs in the tens of billions is not that trivial. To get back to the original point of this thread, it seems to me that increasing the integrity of the system should pay dividends, mostly in the form of higher disbursements to the truly needy. </p>

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<p>In an era where our economy is relying less on unskilled manufacturing labor and more on technical skills attained through education, how short sighted is it to make it more difficult for poor and lower class students to pursue higher education. You can bet that China, India and Korea are not cutting back on the education of their next generation!!! It is the next generation who will be called on to pay the national debt that we are leaving them and to pay for our SS and health care.</p>

<p>Arch-conservative Grover Norquist, who has enormous behind the scenes influence on the Republican economic agenda, has admitted that the primary purpose of tax cuts is to STARVE the national government of the funds it needs to operate. He wants to make it necessary to scrap the Departments of Education, HHS, EPA, Transportation, and Interior. The only federal functions justified in his view are Treasury, Justice and Defense.</p>

<p>To be continued.</p>

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<p>“In an era where our economy is relying less on unskilled manufacturing labor and more on technical skills attained through education”</p>

<p>We like to believe it, but it is patently untrue. By far the fastest growing occupation in the U.S., and the one with the largest number of people in it, is Wal-Mart clerk, closely followed by burger flipper. Meanwhile the number of Boeing engineers in the U.S. is being reduced from 70,000 to 5,000. How are we ever going to get enough low-income folks to be Wal-Mart clerks (and soldiers!) if they are all going to college?</p>

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<p>I guess I must be slow, why should better management of disbursed funds result in the lowering of the amount given to individuals.
I expect the amount to be monitored, just as I expect purchasers of HUMMERS and Yachts to not get huge tax write offs.</p>

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<p>mini, I don’t know about Walmart clerks but if you had college-educated soldiers, wouldn’t that make a better force? And not just officers, but GIs who are college educated.</p>

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<p>I believe that things in the USA will get much worse before they get better. I admit that I was a Kerry supporter and generally vote for Democratic candidates. But I have reluctantly changed my attitude.</p>

<p>How so? So many of my fellow citizens have not informed themselves of what is happening in America. Studies have shown that the worst informed are those watching Faux News and the likes of Rush L. Well if they are so afraid or lazy to get the whole picture of the public issuse facing us all, I say screw them!!!</p>

<p>I will take full advantage of every oportunity to extract more money from Uncle Sam. I will rejoice in further tax cuts which eliminate federal tax on my capital gains and dividends. I will take full advantage of every possible way to shelter my investment income. I will ask my representatives to support elimination of the “death” tax which will enable me to make changes in our trust accounts which will save us about $18,000 per year and garner us $188,500 tax free cash from cashing in our joint $2,000,000 life insurance policy!!!</p>

<p>I will unashamable embrace this me-first attitude until the vast majority of people in our once great country wake up and understand what is happening, ie the richest 5% of us are getting more and more wealthy at their expense.</p>

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<p>Or am I asking a ‘why can’t they have cake’ type of question and don’t know what I’m talking about? I know that in order to get into the US military, you need to take an IQ test…</p>

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<p>I think this is horrible news. thats like a slap in the face to everyone who has trouble affording college. i get grants to go to college, i work over 30 hours a week (most weeks), i take 18 credits a semester… i graduate this may… if i would of been given less grant money that means i would of had to of worked more, and my parents would of had to contribute more… </p>

<p>and to whoever said a couple hundred bucks in the end means nothing… i beg to differ… every CENT helps… a couple hundred bucks is your books for a semester… and honestly, unless youve worked 30 hours a week and done 18 credits (400 level classes), and been an active member in 3-4 organizations on campus… I don’t want to hear you say that a couple hundred bucks doesnt mean anything.</p>

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<p>“mini, I don’t know about Walmart clerks but if you had college-educated soldiers, wouldn’t that make a better force? And not just officers, but GIs who are college educated.”</p>

<p>Why would you assume that? The first three points of military training is to ensure obedience and unquestioning respect for authority. Maybe if they all went to Bob Jones…</p>

<p>At any rate, the factual matter is that the military doesn’t assume it. You don’t have to be a genius to see where they decide to focus their recruiting efforts.</p>

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<p>I think the fighting force would be more difficult to handle if they attended college unless they went somewhere like VMI. I thought the objective in college was to refine thinking skills, in combat you want obedience and reaction time. Intelligence is good, but being too cerebral could get in the way.</p>

<p>You do need to have good people skills hwever, it might help if soldiers had a broader view of the world that might assist them in helping the people whose countries they are occupying.</p>

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<p>I did some more research — Here is the link I used - the governments own figures about Pell grants: <a href=“http://www.ed.gov/finaid/prof/resources/data/ope.html[/url]”>http://www.ed.gov/finaid/prof/resources/data/ope.html&lt;/a&gt; = see the report for 2002-2003 recipients, last available full year report.</p>

<p>Some interesting statistics here. I’ll just summarize a few of the key ones. First, the largest recipients of Pell grants are students at public two year colleges - 37.6 percent of pell grants attend public two year schools (i.e., community colleges), followed by 30.6% who attend public 4 year colleges, 15.9% who attend proprietary colleges (i.e. for-profit schools), 13.9% of pell grant recipients attend 4 year private schools.</p>

<p>12 million applicants applied for Pell grants in 2003, 53 percent qualified, up from 52 percent of applicants in 1998.</p>

<p>The average grant in 2003 was $2,436, up from $2298 in 2002 - maximum award available that year was $4,000. The average cost of education of pell grant RECIPIENTS was $13,418 in 2003, up from $12,710 in 2002.</p>

<p>The average income of a pell grant recipient was $19,328. However, Just under 9% of recipients had incomes of over $40,000.</p>

<p>Obviously, there are many millions of students being helped by Pell grants - and they should be (as I said, a Pell grant helped me get through school) — but I’d like to know more about the details of exactly how the changes in eligibility are going to occur, who they will affect, even if the new system may ultimately help more deserving students in the end by freeing up more funds for them. After all, The total amount of Pell grants is not being cut, the way they are being distributed is what is changing is how I am reading this. I’d like more concrete information on how the distribution changes affect students at various income levels before I make a judgment on this. Does anyone have any more specific information on that?</p>

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<p>As reported in an annual study by The College Board, average tuition prices at four-year public universities have increased by 47 percent in the last decade. In the same amount of time, the maximum Pell Grant has increased by 42 percent, while the average awarded amount has increased by just 37 percent. The problem though, is the number of students who now qualify for the award. Since Pell Grants are given on a “need” basis, students are only entitled to its benefits based on their expected family contribution (EFC), which is calculated on the FAFSA form. </p>

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<p>Just for clarification, Emerald, these changes were made under the Clinton administration in the 1990’s, not under the Bush administration.</p>

<p>Also, comparing the increased cost of 4 year private college education with the cost of pell grant increases is misleading. If you look at my previous post, most pell grant recipients are NOT attending 4 year private colleges. If you look specifically at the actual increase in cost of education of pell grant RECIPIENTS, you’ll see that Pell grant increases have done a very good job of keeping pace with the actual cost of education incurred by the recipients of those grants. That’s a much more accurate indicator of whether pell grants are doing a good job of serving the demographic for which they are intended.</p>

<p>I fail to see what’s wrong with making Pell grants dependent on EFC - it’s just like any other form of financial aid and should be tied to ability to pay. </p>

<p>Bear in mind that Pell grants are not intended to pay full educational costs for anyone - the supposition is that a student will use all options available, such as Perkins loans, institutional grants, federal work study programs, etc.</p>

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<p>Fendergirl, before claiming outrage, did you even check if the application of a TWELVE year old impacts you at all? </p>

<p>This is not about giving less money to deserving recipients, this is about using the correct qualifications. The students who will see reduced awards were only entitled to the money because the government failed to follow the law. By law, the Secretary of Education should have amended the tables every year.</p>

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<p>Emeraldkitty, your numbers were correct:</p>

<p>*“According to the American Council on Education, the maximum grant award in 1973 was $1,400. In 2000, while Bush was campaigning for his first term, he promised to raise the maximum award amount from $3,300, where it stood then, to $5,100. Today, the maximum allotment is only $4,000, and Bush has requested an increase of just $50 more in his 2005 budget.” *</p>

<p>However, shouldn’t we look at the evolution of the numbers in the past, and see how the last administrations fared?</p>

<p>This shows the maximum and average awards:
Year --Max -Avg
FY92 2,400 1,543
FY93 2,300 1,506
FY94 2,300 1,502
FY95 2,340 1,515
FY96 2,470 1,577
FY97 2,700 1,696
FY98 3,000 1,878
FY99 3,125 1,933
FY00 3,300 2,070
FY01 3,750 2,298
FY02 4,000 2,436</p>

<p>The number of awardees:
FY92 4,002,045
FY93 3,755,675
FY94 3,674,967
FY95 3,611,821
FY96 3,665,654
FY97 3,732,807
FY98 3,855,180
FY99 3,808,269
FY00 3,880,448
FY01 4,340,879
FY02 4,778,507</p>

<p>The expenditures:
FY92 6,175,902
FY93 5,654,453
FY94 5,519,475
FY95 5,471,708
FY96 5,780,033
FY97 6,331,091
FY98 7,232,782
FY99 7,385,809
FY00 8,057,217
FY01 9,975,092
FY02 11,641,552</p>

<p>Then, the percentage of maximum award versus cost of public and private colleges. The second column is public, the third is private. </p>

<p>FY92 40% 16%
FY93 36% 14%
FY94 34% 14%
FY95 33% 13%
FY96 33% 13%
FY97 36% 14%
FY98 39% 15%
FY99 39% 15%
FY00 39% 15%
FY01 42% 16%
FY02 41% 16%</p>

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<p>That’s the problem with looking solely at the numbers. It ignores the real impacts on real people. The solution would have been to RAISE Pell Grants to track the rise in poverty rates.</p>

<p>Fat chance. They need two more divisions in Iraq.</p>

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<p>Mini, I am glad to hear that things were so much better when we did not need two more divisions in Iraq. I am equally glad to see that the cost of college was so much more affordable ten years ago that we could allow the maximum Pell grants to be lowered. </p>

<p>Why didn’t the real people scream at an administration that left the education massively underfunded for six of their eight years -in spite of a booming economy- and passed the buck to the next administration. </p>

<p>Yes, there is indeed a problem with numbers … they leave permanent records from which certain politicians can run but not hide.</p>

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<p>Hey - I didn’t like the last administration any better than this one, so you’re barking up the wrong tree. (But, the cost of PUBLIC education WAS much more affordable 10 years ago. At UW, costs have skyrocketed. Democratic governors and all.)</p>

<p>As for the two divisions - well, one can’t really argue the point. The current administration is a huge believer in deficit spending. The only question is what they want to spend the non-existent dollars on. Pharmaceutical companies and Halliburton need not worry.</p>

<p>He’s clear about his priorities.</p>

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<p>The solution would have been to RAISE Pell Grants to track the rise in poverty rates.</p>

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<p>The numbers for Pell Grants have been keeping pace pretty nicely with the raise in education costs of recipients of Pell grants. Again, refer back to the web site I gave - it lists data from the past decade showing that the grants are going up about the same rate as the ACTUAL educational costs of recipients. During the same time period the numbers of actual recipients has also been rising steadily. While it would be nice to think that everyone living below the poverty level would want to go to college, the truth is probably different, don’t you think? </p>

<p>Of course, we could be making a case that we need to be sending more low income kids to private four year kids and funding that - but that seems like an entirely different issue, and certainly one we’ve discussed in the past a great deal.</p>

<p>I’m curious how everyone here feels about school vouchers for k-12 education.</p>