New formula decreases grant eligibility

While fewer college students will be able to receive Pell Grants from the federal government, both congressmen and President George W. Bush have proposed increasing the funding for the grants.

Shortly before Christmas, the Department of Education announced a change in the formula that determines which students receive Pell Grants. According to Dan Goyette, director of financial aid at Marquette, for 15 years the Department of Education has not adjusted state tax tables, which are factored into the Free Application for Federal Student Aid (FAFSA). Therefore the amount many students and families could pay for college had been underestimated if the student lived in a state, such as Wisconsin, where the tax rate had dropped since the last adjustment of the tax tables.

With the adjustment in the tax tables, about 90,000 students could lose their grants, which range from $400 to $4,050 a year, depending on need.

At Marquette, perhaps 50 of the 1,000 students who receive grants may lose their funding, Goyette said.

However, the neediest students at the university, who receive the highest grant amounts, will either lose little or no funding, Goyette said.

But the handling of the situation could have been better, according to Rolf Wegenke, president of the Wisconsin Association of Independent Colleges and Universities.

He said the Department of Education should have adjusted its tax tables every year, and the change in the system will inevitably hurt private schools.

"We enroll more lower-income people than the University of Wisconsin System," Wegenke said. He estimated 1,200 to 1,500 people in Wisconsin private colleges and universities would lose their Pell Grant funding.

Statewide, up to 5,500 students in colleges, public or private, could lose their Pell Grants, according to a statement issued by the Wisconsin PK-16 Leadership Council, to which Wegenke and UW System President Kevin Reilly belong. The council is a group representing different sectors of education (public and private) in Wisconsin.

Because of the change, he said, some low-income students would have to borrow more money, and others may have to drop out of school because they cannot afford to take out any more loans in order to pay for college.

Goyette said he did not think any Marquette students would have to drop out of college due to losing their Pell Grants. He said extra loans would be able to cover whatever is lost from the Pell Grants.

Those students who still have Pell Grants may be able to receive more money from a bill expected to be introduced by Reps. Tom Petri (R-Wis.) and George Miller (D-Calif).

The bill would give incentive for colleges to use a direct-loan program from the federal government, instead of the current system with the Federal Family Education Loan program, which uses banks, credit unions and guarantee agencies.

According to Goyette, use of the direct-loan program saves the government money, as they do not have to pay the banks and agencies fees. Petri and Miller's bill, thus, proposes that the money saved by use of the direct-loan program be redirected to Pell Grants.

Sen. Edward Kennedy (D-Mass.) has introduced a similar bill in the Senate.

President Bush said in a speech in Jacksonville, Fla., Friday that he would also like funding increased for the grants.

"We want to increase the Pell Grants by $100 a year over the next five years," Bush said.

But the problems with cutting students from Pell Grant eligibility must be addressed first, Wegenke said.

He said although he believed Petri and Miller's bill had a good chance of passing, "by the time you see the appropriations through, the tax table change would go into effect."

This article appeared in The Marquette Tribune on Jan. 18 2005.