Friday, June 13, 2003

Depending on student loans?

Greg Winter of the Times writes that Change in Aid Formula Shifts More Costs to Students:

Millions of college students will have to shoulder more of the cost of their education under federal rules imposed late last month through a bureaucratic adjustment requiring neither Congressional approval nor public comment of any kind.
The changes, only a slight alteration in the formula governing financial aid, are expected to diminish the government's contribution to higher education by hundreds of millions of dollars, starting in the fall of 2004.

And because state and local governments are making up for aWol's shortfalls on homeland security, unfunded mandates on education, and tax giveaways to the rich, student loans are shrinking.

Whether furnished by colleges, states or the federal government, the vast majority of the nation's $90 billion in financial aid is dictated by a single, intricate equation known as the federal need analysis. Its purpose is to decipher how much of a family's income is truly discretionary and therefore fair game for covering college expenses.

Much like the federal income tax, the formula allows families to deduct some of what they pay in state and local taxes. But, this year, the department significantly reduced that amount, in some cases cutting it in half. On paper, at least, that leaves families with more money left over to pay for college, even though state and local taxes have gone up over the last year, not down.

And so much for your Pell grant.

the changes should shave off a few hundred million dollars in grants to low-income students, known as the Pell Grant. With the faltering economy and the swelling popularity of college, the program has surpassed $11 billion a year. The new formula should constrain some of that growth, the department says, though it maintains that was never the intent of recalibrating it.

Don't you love those "bureaucratic adjustments"?