In an environment in which access for the poor has taken a back seat to aiding the middle and upper-middle classes and in which budget surpluses have given way to deficits, supporters of increased financial aid for low-income students face an uphill struggle. But with the Higher Education Act up for reauthorization, advocates of increased aid hope that Congress will recognize the importance of improving college access for low-income students.
“This reauthorization represents a huge opportunity,” says Jamie Merisotis, president of the Washington, D.C.- based Institute for Higher Education Policy. “It's a chance for Congress to show some real leadership in increasing access to higher education. And real leadership is critical now because minority and low-income populations are growing rapidly. It's time to make a long-term investment in our collective future.”
The largest federal grant aid program to help low-income students pay for college is the Pell Grant. Today, on average, the purchasing power of the Pell Grant covers barely half of the tuition charges at a public four-year college. In fact, Congress would have to double Pell Grant funding from $10 billion to $20 billion to restore the grants’ full purchasing power — a legislative action most college financial aid experts would welcome. Some analysts also would like the grant to become an entitlement so that those who qualify would know in advance how much money to expect. Noted researcher Lawrence Gladieux said it clearly in testimony to the House Committee on Education and the Workforce in July 2002: “In fairness and in anticipation of the increasingly diverse cohort of young people who will be coming of college age in the next decade, a Pell entitlement is what we ought to have.” If substantial enhancements of the Pell program cannot be made in the current fiscal and political climate, an alternative approach favored by some analysts is for the federal government to match what schools spend on need-based financial aid. “It would give colleges the incentive to target their resources to higher-need students,” explains Macalester’s Michael McPherson.
Even without a substantial increase in funding or the development of a matching program, there are several relatively inexpensive measures for Congress to consider that might help increase the number of low-income students enrolling in college. UCLA’s Tom Kane advocates replacing the complex FAFSA form with something far simpler and removing consideration of family assets in determining eligibility for federal aid. That way, says Kane, “you could pass out a table with family income and size that would show how much aid a student would qualify for.”
What might be lost in precisely targeting the aid, say researchers, would be offset by the certainty that would be introduced into the process. They believe that if students knew early on exactly how much aid they were eligible to receive (rather than finding out just a few months before classes begin), they would approach the college-application process more confidently and make better decisions. “A lot of policy-makers have come to the conclusion that the complexity of the process blunts the impact of aid on low-income kids,” says the Kennedy School’s Susan Dynarski.
Analysts also advocate excluding earnings of dependent students from the calculation of family income. Under the current federal formula, income earned by students to help pay for college is counted as part of family income, thus reducing the amount of aid for which students qualify. The Advisory Committee’s Brian Fitzgerald says it is unfair for students who face several thousand dollars in unmet need and have to work to close the gap to find that their grant aid is reduced as a result. He calls it “a work penalty.”
Substantial changes are also needed in federal loan programs, say financial aid professionals. Some advocate making additional funds available for subsidized loans and increasing the amount of subsidized money students can borrow. Federal loan limits have not been increased since 1992. Since that time, according to the College Board, average tuition and fees at public four-year colleges have risen from $2,907 to $3,754 in constant dollars, an increase of 29 percent. At private four-year schools, the increase was 31 percent —from $13,012 to $17,123 in constant dollars. The subsidized loan limit is currently $2,625 in the freshman year, and the amount increases gradually as students advance toward a degree.
Many college financial aid officers insist that the freshman loan limit is too low. Even students who are willing to borrow cannot take out enough in subsidized loans to cover their basic college costs, they say. That often means turning to their parents. But even if parents are willing to borrow under the federal PLUS program, repayment generally begins 60 days after the loan is fully disbursed — while the student is still in school. Some families are simply too cash-strapped to begin repayment right away, while others can’t qualify for loans. If loan limits were increased, financial aid officers say, more students would be able to cross the threshold to higher education.
