Widening the College Gap
December 2, 2004
With all the talk about not leaving children behind and the necessity of a college education to survive in the Information Age economy, it's hard to fathom why Congress and the Bush administration would cut back on Pell grants, a form of college aid for truly needy students.
In passing the omnibus spending bill, Congress gave the go-ahead to the U.S. Department of Education to "adjust" its formulas for calculating financial aid. Last year, Congress had held back the adjustment because it would reduce grants for 1.2 million students and cut off aid completely to about 90,000.
On the surface, the change seems like a reasonable update. The government uses a complex formula comparing a family's expenses — including taxes — with its income to determine its financial need. Education officials want to stop using old state tax rates that date back to 1990 and replace them with rates from 2000, which are generally lower. But most states have been raising taxes since 2000, so the 1990 rates are now probably more accurate than the newer ones.
Though the change will not affect the poorest of the poor — families of four with incomes of less than $25,000 — no students who get Pell grants are rolling in cash. At most, their families take in perhaps $45,000 a year. Further, college costs are rising at more than twice the rate of inflation, and the maximum Pell grant has been frozen for three years at about $4,000.
The Pell grant changes, by themselves, probably won't keep many low-income students from attending college, said Brian Fitzgerald, director of a congressional advisory committee on financial aid. But most states use the federal formula for their own grant programs and, by law, colleges and universities that receive federal funds must use the formula in calculating financial need. (California officials are still figuring out how the changes to the Pell grant formula might affect the more generous Cal Grant college aid.) With reductions in financial help at the federal, state and college level, worthy but needy students might be kept from higher education.
