Prometheus 6   

Change in Aid Formula Shifts More Costs to Students
By GREG WINTER

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.

But they will also have a ripple effect across almost every level of financial aid, shrinking the pool of students who qualify for federal awards, tightening access to billions of dollars in state and institutional grants and, in turn, heightening the reliance on loans to pay for college.

… "This is a classic mismatch between public policy and the world that the students and families are actually living in," said Patrick M. Callan, president of the National Center for Public Policy and Higher Education. "If somebody put in a bill about this, it would get a hell of a debate, wouldn't it?"

The Education Department acknowledges that there is a disconnect between the formula and the current trajectory of state and local taxes, but contends that there is little it can do to remedy the situation.

Federal law requires that it update the tax tables periodically, and the data from which it draws comes directly from the Internal Revenue Service. The problem is, the department says, the most recent data is at least three years old, reflecting a period when state taxes were considerably lower than what they are now.

"I don't know what to do about that," said Dan Madzelan, chief of forecasting and policy analysis for the department's office of postsecondary education. "There's always some kind of a look back in the federal system."

Because discretionary income is unique to each family � entirely dependent on its size, income, the number of children it has in college and, for tax purposes, where it lives � there is no set amount that educational expenses will change.