WASHINGTON – More college students will be eligible for federal Pell Grants in 2006,according to the U.S. Department of Education budget proposal unveiled by the Bush administration Monday.
Along with broader eligibility,President Bush has proposed raising the maximum award by $100 over the next five years,from $4,050 to $4,550.
Roberta Johnson,director of financial aid at Iowa State,said that with an economic recession and rising tuition costs,this is a needed change.
“Nationally,this is a huge issue,” she said. “It hasn't kept pace with inflation. It hasn't kept pace with the cost of tuition.”
Pell Grants are offered to low-income college students based on their application for federal student aid. Johnson said that in 2003-2004,Iowa State gave 5,488 students Pell Grants totaling $13.5 million.
“It is the building block of financial aid,” she said.
To help fund a $28 billion overhaul of college student aid in the Education Department over the next 10 years,the president proposed that federal Perkins Loans be phased out,returning that money to the treasury for grants. Perkins loans are offered to low-income students at a low interest rate.
The grant program has accumulated a deficit of more than $4 billion because the department funds all students who meet eligibility requirements. With these changes,the department expects a net gain of more than $1 billion over 10 years.
Johnson said more grant money is always welcome,but taking away Perkins Loans will leave some middle-income students in a tough situation.
“It is positive to get more dollars in grants,but we are losing a very viable program that we helped 2,800 students with last year,” she said.
Ray Simon,assistant secretary for the elementary and secondary education in the U.S. Department of Education,said in a conference call with reporters that the Perkins program isn't the best loan program for students anyway,and money would be better directed at the grant program.
“The Perkins Loan program is much narrower; the Pell program is broader,” he said.
Phasing out the Perkins program would happen over 10 years,if Congress approves. Sally Stroup,assistant secretary for post-secondary education for the U.S. Department of Education,said she expects Congress will accept the proposal.
“This is about priority-setting package changes,” she said. “We need to adopt legislation to make these changes. We think people are going to be hard-pressed to oppose increasing Pell Grants for low-income students. This is the year to do it.”
Stroup said more students will be eligible for Pell Grants in 2006 because family income limits will be raised.
Johnson remained critical of putting Perkins Loans on the chopping block. She said getting rid of Perkins is just a tool to initiate discussion among policymakers.
“The cost-benefit ratio isn't there,” she said. “It's going to be a bargaining chip. I am still optimistic.”