Pell Granst to be denied to 81,000 more students

<p>The following article came from the Chronicle of High Education. It seems due to new and "improved" financial calculations, an additional 81,000 students will be denied pell grants. Read this article. </p>

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<p>Washington</p>

<p>The U.S. Education Department's new way of determining a student's need for financial aid will disqualify 81,000 students from receiving Pell Grants, the Government Accountability Office said in a report last week, a conclusion that confirmed earlier predictions by many higher-education lobbyists. </p>

<p>Since January, the department has been using updated tax information in its formula for assessing a student's eligibility for federal financial aid. The change makes families appear richer -- and thus able to contribute more to the cost of their children's higher education -- because it reduces the amount of money the department forgives for state and local tax payments. </p>

<p>The change in the tax allowance was the first in more than a decade. It was announced a few days before Christmas and took effect this year, despite opposition from Democratic lawmakers, college lobbyists, and advocates for students (The Chronicle, January 7). </p>

<p>The report from the GAO, the investigative arm of Congress, concludes that the change will increase the expected family contribution for college costs by $440, on average, and is likely to result in a decrease in the Pell Grant award for about 35 percent of students. The average cutback will be about $130, the report says, and families will have to pony up an additional $3.2-billion over all. </p>

<p>The report also concludes that the change will save the government about $250-million in the Pell Grant program. Republican lawmakers had urged a change in the formula to ensure that Pell Grants were awarded to the neediest students, and in order to close the program's $4-billion shortfall. </p>

<p>The GAO says the new rule will incease the total family contribution for college costs more than five alternative changes that the Education Department could have pursued last year. Those strategies would have increased the expected family contribution from $1-billion to $3-billion. But only one strategy would have disqualified more students (88,000) than did the policy that the department adopted. </p>

<p>The full text of the report, "Department of Education's Update of the State and Other Tax Allowance for Student Aid Award Year 2005-2006," is available on the GAO's Web site. It can be viewed using Adobe Reader, available free. </p>

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<p>Background articles from The Chronicle:</p>