Dept of Education may reduce Pell Grants

A new formula for determining college financial aid eligibility was announced by the Department of Education in late December, a decision which may remove or reduce federal Pell Grant scholarships for up to 90,000 students.

The average Pell Grant given to a student is about $2,400 a year. The people who will be affected most are those who are right on the cusp of qualifying for Pell Grants, said Brian DeYoung, a senior financial aid counselor. These are the people whose families are at the upper margin of eligibility and receive only the minimum of $400 per year.

The formula currently used relies on tax data from 1988, according to The Chronicle of Higher Education. The new formula will use tax information from 2002 and will go into effect July 1. This new formula will save the government at least $300 million for the 2005-’06 school year.

"The tax tables are supposed to be updated every year and haven’t been," DeYoung said. "If they had been updating the tables, it wouldn’t be as big of a surprise."

Junior Kelly Miller said, "I haven’t heard anything about these cutbacks. I think it’s important for students to be well-informed because of the huge changes these could have."

Many states use the federal formula to calculate aid for students at state universities. "What’s significant in Virginia is that they are estimating a 3 percent loss in Pell eligibility, which will have a trickle-down effect," said Lisa Tumer, director of financial aid and scholarships.

Financial aid is decided by first calculating the cost of attendance, which is the cost for tuition, room and board, transportation and other factors. Subtracted from this is the expected family contribution. The remaining total is the demonstrated need for the student.

Filing FAFSA forms by the priority date of March 1 will allow students to receive maximum consideration for financial aid.

"What we will try to do is protect our students with other sources of funding if it is available," Tumer said. "We don’t know what the state allocation will be yet, but we will try to absorb the shocks so the students don’t have to."

The formula change is an attempt to alleviate some of the Pell budget shortfall. In most states, 2002 taxes were lower than those in 1988, which suggests that grant applicants have more money to put toward college tuition.

"I think they probably do need to update the formula," Tumer said. "But I think they went about it in a way that didn’t allow the community to prepare for the changes it will create."