Financial Aid Faces Major Cut

This November, Congress will vote on a proposal to cut federal financial aid by anywhere from $9 billon to $17 billion, which would be the largest cut in the history of federal student aid programs.

If the Republican-supported bill [H.R. 609] passes, typical student borrowers might have to pay $5,800 more than the existing average education debt of $17,500.

The cuts would mostly impact low-income students nationwide who already fall short by $3,800 each year when paying for college with financial aid, according to a memorandum by Rep. George Miller (D-Calif.), the senior Democratic member of the House Education and the Workforce Committee who is leading the fight against H.R. 609.

"There is no reason students should look at a college education and say they can't go because they can't afford it," said Tom Kiley, a spokesman for Miller's office.

The Republican proposals eliminate billion-dollar subsidies paid by the federal government to large banks and lending institutions in the student loan industry. The bill will also hold institutions accountable for their rising tuition costs by disclosing more information to the public and federal government.

According to a College Board report released last week, tuition at four-year colleges increased by 7.1 percent in 2004-2005.

"The committee has developed comprehensive reforms that will expand college access for low and middle-income students," said Education and the Workforce Committee Chairman John Boehner (R-Ohio) in a press release.

Democrats say the savings from subsidies are not going to students. "[Republicans] are taking the savings and putting them into tax cuts for the rich or budget mess instead of making college more affordable," Kiley said.

Director of the UConn Division of Enrollment Management, Jean D. Main, said the largest impact at UConn would be on the Federal Family Education Loan Program School (FFELP). The rate of students defaulting on these loans could increase.

According to the most recent publication of default statistics, in 2003 UConn had a 1.6 percent default rate, much lower than the national average of 4.5 percent.

"As benefits are taken away; potentially that rate will increase," she said. "It impacts your ability to do everything down the road; buy cars, houses, credit."

Although default rates may go up nationwide, Main said UConn's rate should remain low because of the University's own financial aid programs.

"Here at UConn we are very cognizant of how to treat low-income students," she said. "Seventeen percent of tuition revenue goes to need-based financial aid. Our history is that we are very supportive of needy students."

Low-income and needy high school students shouldn't be deterred from coming to UConn, Main said. The university will show prospective students what their financial aid options are and how they can acquiesce paying for a college education before they come to Storrs.

"We show people what sample financial aid package they would have," she said. "We will continue to do that faithfully in terms of what people could expect."

Another provision in the bill is raising the maximum amount of the Pell Grant, which is an entitlement program for need-based students. Currently, the maximum Pell Grant is $4,050 per year. The provision will increase it to a maximum of $6,000 for academic years 2006-2007 through 2012-2013, according to section 401 of the bill.

"The Pell Grant population is a growing population," Main said. "Everyone needs to be responsive to that change. The Pell Grant is a good provision. Any increase is positive."

Josh Litwin, coordinator for UConnPIRG's affordable higher education program and 5th-semester political science major, said the cuts are going to have a significant impact on student financial aid.

"It's going to hit students in the checkbook and make it harder for them after college," he said.

Litwin said students can join the fight against the bill and learn more about it at www.usstudents.org and www.studentaction.com.