Today's NY Times

Lawmakers Move to Halt Cuts in Aid for College
By GREG WINTER

Published: November 21, 2003


A change in the government's financial aid formula that would force millions of students to pay more for their college educations will probably be suspended while lawmakers look for other options, Congressional leaders said yesterday.

Democrats and Republicans in a House-Senate conference committee said they had agreed to halt the new financial aid rules for at least a year.

"We were able to stop these punitive changes," said Senator Jon Corzine, a New Jersey Democrat who introduced legislation that ultimately yielded a deal.

"We need to be looking for ways to expand access to college education, not restrict it," Mr. Corzine said.

Late last May, in a bureaucratic move that caught colleges and legislators off guard, the Department of Education revised the formula by which billions of dollars in financial aid are distributed every year. The department defended the changes as a legal necessity, but members of Congress quickly took the offensive, characterizing them as a backdoor way of cutting education aid without facing the public.

Drawing from the department's own figures, the Congressional Research Service reported that the new formula would effectively bar about 84,000 students from receiving Pell grants, the federal government's largest scholarship program.

Beyond that, government scholarships would be reduced by about $270 million, because hundreds of thousands of other students would probably receive smaller awards. Countless state grants and scholarships given by universities themselves could also be affected, educational experts warned, because they are often governed by the federal formula as well.

At issue is a seemingly small modification to the way the government decides how much students should pay for college.

For the most part, a series of simple calculations lie at the heart of it all, responsible for determining how much of a family's income is discretionary, and therefore free to cover college expenses.

Much as with federal income tax, families can deduct some of what they pay in state and local taxes when calculating their available income. But this year, for the first time in almost a decade, the Department of Education reduced those deductions, even though state taxes have recently gone up, not down.

Reducing the deduction would make it seem, on paper, that families had more money to pay for college. As a result, many students would receive smaller scholarships because they theoretically need less help, while others would no longer qualify for grants at all because their families suddenly appeared to earn too much.

Senator Tom Harkin, an Iowa Democrat who helped negotiate the deal, said he would have preferred to see Congress increase higher education spending to bolster access to college. Barring that, Mr. Harkin said, the deal "will at least save Pell grants for the 84,000 students who depend on them."

Senator Arlen Specter, the Pennsylvania Republican who also helped work out the deal, said he was "very much concerned" that the government's formula for calculating financial aid might be flawed, particularly in its assessment of how much families truly pay in state taxes.

The Department of Education's most recent data come from 2000, near the end of a booming era when state taxes had been cut every year since the mid-1990's, according to the National Conference of State Legislatures.

By this fall, however, state taxes had been raised for two years in a row, making for what some members of Congress have called a different economic reality than the one on which the federal financial aid formula is based.

Some disconnect between the formula and the current economic climate is inevitable, the department contends, because accurate data are slow to be compiled.

Nonetheless, Congressional leaders said that under their deal they will appoint an independent commission to study whether the government's methodology is sound, reflecting what families actually pay in taxes. If better alternatives exist, Congressional leaders say, they are determined to find them.

"It was too complicated to decide by the seat of our pants," Mr. Specter said on Wednesday. "I think that we're now in position to talk about it intelligently."

I guess it's too much to ask for people to actually pay for something themselves.

While I generally agree with that sentiment, I completely disagree with you in this area. Besides the cost of cars and M$ software [img]tongue.gif[/img] , the cost of post secondary education has risen past general affordabillity. Even State schools. Now, one could say "If you can't afford it, don't go", but that ignores the reality that to get any "white collar" job, you need at the very minimum a Bachelors degree. The level of "education inflation" is ridickulus. Also, you assume that Pell Grants are the primary form of educational financial aid. It is not. Most students get loans - they do pay for it themselves! What this article is saying is they will qualify for less loan money - meaning they need to kick in more of the cost up front. Since the calculation is just a paper shuffle and not accounting for more actual discressionary wealth, less people will be able to afford the education they need.

Just think of this before you toss anymore nonsequiters around on this topic. How much of your education did you pay for? Your total education, not just post HS stuff.

Wow. I mean...wow. Do you have any idea how much College Financial aid--starting with the GI bill-- has helped turn America into what we are today?

I worked my *** off in highschool saving for college, and then worked all throughout college. I STILL needed help from the government to afford to go to school...and they gave me LOANS (which accounts for the majority of financial aid) which I must pay off. So, yeah, I'm still paying for my college education.

Anybody who does recieve grants and scholarships from the Federal Government are exceptional individuals and i agree whole heartedly with the grants...talented people are very rare and they deserve to be rewarded for there efforts.

I'm not sure if your response comes from jealousy, a sense of elitism, or simply the desire to stir up agruments on the forum...but whatever it is, if you believe what you just said you should be ashamed to call yourself and American.

I personally feel that the governemnt should only give aid to cover the cost of an education in a state school (only to those who need it ofcorse). If someone wants to attend someplase more expensive, then they can make up the difference on their own (work, or get loans/money from other sources).

or happen to belong to one of many groups that the government loves to throw money at (the example that springs to mind being the indians).

Wow. I mean...wow. Do you have any idea how much College Financial aid--starting with the GI bill-- has helped turn America into what we are today?

I worked my *** off in highschool saving for college, and then worked all throughout college. I STILL needed help from the government to afford to go to school...and they gave me LOANS (which accounts for the majority of financial aid) which I must pay off. So, yeah, I'm still paying for my college education.

Anybody who does recieve grants and scholarships from the Federal Government are exceptional individuals and i agree whole heartedly with the grants...talented people are very rare and they deserve to be rewarded for there efforts.

I'm not sure if your response comes from jealousy, a sense of elitism, or simply the desire to stir up agruments on the forum...but whatever it is, if you believe what you just said you should be ashamed to call yourself and American. </font>[/QUOTE]Duh, yeah! I'm workig to pay back those law school (major) and college (minor) loans, and it is doing the gummint good. Between me and my wife we make six figs and are paying diligently on 30 yr loans of $250K. We HAVE become productive members of society, are paying our due, and donating to charity and the community in large amounts. There is little room for argument that only those wealthy white privileged brats should be allowed to afford and go to school. If you feel different, screw you!

This is why I like the system here in Dennmark. Education is free at every level (I got a Master of Science in Engineering).

And the students get a monthly payment in addition - which can be supplemented by a loan or a job (I delived mail on Saturdays)

But then we pay 50% taxes for the rest of our lives.

This education policy is simple - if you have the talent/skill to complete an education, then lack of money shall not hold you back.

I note I am not for free education. Education brings benefits, including a generally better station in life and more money. It ought not be free, because that punishes those who do not have an education. I am not for any member of society getting government freebies, and education is valuable. If education is free, do not complain that the indigent or uneducated are given a free ride.

However, in addressing how to deal with the rampant costs of education in the US, I am at a loss. I know that Centre college (www.centre.edu) used its $100 million endowment to give every student a $5,000/yr break on tuition. However, this still left tuition + room/board at $15,000 or more for everyone. The problem is that US colleges, even with the high tuition, do not make a lot of profit. It takes a lot of money to give students a 15/1 faculty/student ratio (with 97% of faculty being Ph.D.). If we force tuition prices down via law, we will simply bankrupt colleges. Like medicine, it's a tricky problem to address. The only remedy to keep colleges/hospitals from going bankrupt is to also legislate that professor/doctor salaries be lowered. If education were free, that may be plausible, since most doctors (for instance) justify their $300,000/yr incomes based on their astronomical student loan debts (and the years of residency they must serve being basically indentured servants at a meagre pay). It's very complex, and perhaps not the topic of this thread. It is an issue I have ideas about, but only half-formed ideas.

education is a topic near and dear to my heart. generally speaking, an educated individual is an asset to the society [s]he lives in. as such, it is in the best interests of the society to encourage and enable those people interested in and capable of furthering their education to do so. in this sense, the danish system is admirable.

however, throwing dollars at a problem wont necessarily achieve the desired goal.

for example, here in australia, for the first time our federal education budget is providing more funding to private schools than colleges and universities. private schools attract the best teachers with high salaries and low teacher:student ratios, and pay for it through exorbitant tuition fees. this attracts AB economic status families (ie white, rich).

by giving them further aid to create a further gap in education quality, while maintining tuition barriers that keep everyone else from having access to that education does not benefit society as a whole - only those white enough and rich enough to get in.

Well, here in the US we circumvent that by only charging the rich whiteys and basically giving the vast majority of minority students very large scholarships. We have need-based grant programs as well. The Pell Grant and Stafford program kicked in a lot for me each year. Some of it was grant, most of it was loans.

And, I think student loans are an excellent way to achieve the goal of having individuals attend school now, becoming more producting -- and wealthy -- members of society, and then letting the student pay off the loans over a large period of time. It keeps smart people from getting a free government leg up on the backs of the less smart people, but achieves the goal of allowing those who cannot afford school to go to school. The one drawback is that this will sometimes prevent students from going down an educational path that leads to less likely income (such as art or drama). For me, the decision between graduate school in English vs. Law School was largely economically-based.