This summer, major changes to the 40-year-old program will affect an estimated 145,000 low-income college students nationwide when narrowed eligibility requirements take effect.
The new restrictions, enacted in December to rein in spending on the federal financial aid program, are expected to affect hundreds of students in Butler County, including many at Miami University and its regional campuses in Hamilton and Middletown, who will no longer receive the support. The changes come as college affordability and the nearly $1 trillion in student loan debt is drawing increased attention.
College officials said they do not yet know how many of their students will be affected.
As of July 1, students can only receive the grant for six years, down from nine years. The new time limit applies retroactively, meaning students who have attended 12 full-time semesters, or its equivalent, can no longer qualify for a grant.
“We’re going to find the students who have reached or even exceeded that limit and notify them of the change,” said Brent Shock, director of Miami University Student Financial Assistance. “We’ll work with every student individually to come up with other options.
“The biggest concern is that the Pell grant program has been the mainstay grant program since the mid 1970s for students with financial needs,” he said. “When you make changes to that program, it’s going to affect students who need assistance the most.”
Other changes include reducing the maximum annual income that automatically qualifies a student for a full award to $23,000, down from $30,000. Additionally, students will no longer be able to take an “ability to benefit” test to qualify, and instead must have a high school diploma or GED, according to Rich Williams, higher education advocate for U.S. Public Interest Research Group.
“When we talk about changes and cuts to the Pell grant program, we’re talking about ending the path to graduation for many students,” he said.
‘Falling short’
More than $200 million in Pell grants are given to students at 16 area schools, according to area colleges and universities.
Grant amounts ranged from $555 to $5,550 and could be used at 5,400 participating institutions, including public, private and for-profit schools.
The program covers the smallest share of the cost to attend college ever — paying for less than a third of the price to attend a public four-year college full-time.
“It is that grant that makes a difference in whether or not they can go to college,” said Megan McClean, managing director of policy and federal relations for National Association of Student Financial Aid Administrators.
Recipients are twice as likely as other students to take out a loan to pay for their education, Williams said.
The retroactive limit on how long students can receive the aid will disproportionately affect black students, who make up 41 percent of Pell recipients nationwide who receive the grant for more than a total of six years, according to the Institute for College Access and Success.
At Miami’s Oxford campus, 17 percent of the students receive the Pell grant, Shock said.
“And for the Oxford, Middletown and Hamilton campuses combined it’s closer to 25 percent,” he said.
Funding debate
President Barack Obama proposed increasing the maximum amount of the award by $85, up to $5,635, in his fiscal year 2013 budget.
Congressional Democrats and Republicans have expressed different opinions on whether the Pell program should be expanded to include middle-class students or scaled back to be more affordable to taxpayers.
Congress should find ways to increase grant awards for eligible students and keep pace with inflation without adding to the nation’s deficit, said U.S. Rep. Robert Andrews, D-N.J., a member of the House Committee on Education and the Workforce.
“In order for our economy to bounce back and grow jobs, we need to expand Pell grants — not cut them — and stop placing our nation’s tax burden on the middle class who struggle in the face of mounting student loan debt,” said Andrews, who said he was a Pell grant recipient.
But U.S. Rep. John Kline, R-Minn., who chairs the committee, said expanding the program has already gone “beyond what taxpayers can afford, putting the program on a path to bankruptcy.
“In the last five years alone, Pell grant program costs have increased from $13.7 billion to a staggering $41.5 billion in the 2012-13 school year,” he said.
The Pell program faces a $7.5 billion shortfall in fiscal year 2014, according to the National Association of Student Financial Aid Administrators.
Because students who qualify for the grant are automatically entitled to the aid, shortfalls can occur when payments exceed the amount budgeted for the program.
The program faced funding shortfalls in four of the five years from fiscal years 2007 to 2011 as spending increased during the weak economy and as more students pursued a degree.
The issue was addressed by making changes to other federal aid programs and rolling back some Pell benefits, including no longer allowing students to receive two grants in one year.
In 2011, the grants went to 9.4 million students nationwide, or about 27 percent of all undergraduates, according to the U.S. Department of Education.
Some students who are no longer eligible for a Pell grant have already been informed they will receive the aid in the coming school year, according to the NASFAA. The organization is asking the Department of Education to hold schools harmless for those overpayments.
‘Commonsense reforms’
Discussion on the future funding of the Pell program likely will not happen until after the November election because of the “last-minute approach to federal funding,” according to NASFAA.
The NASFAA said failure to address the looming shortfall could mean more restrictions to who is eligible for the aid.
Kline said Congress must continue to make “commonsense reforms” to keep the program available to students who need it most.
“We need to make tough choices, not simply rely on short-term fixes that ignore the real challenges facing the program,” Kline said.
University of Dayton’s Kathy McEuen Harmon, assistant vice president and dean of admission and financial aid, said she hopes people will take notice and write their members of Congress.
“Voters are the ones who are going to ensure it stays in existence,” she said.
Staff writer Pete Conrad contributed to this report.
About the Author