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Congress may pass laws, dropping pell grant funds
Melissa Benton
Michigan Daily (University of Michigan)
(U-WIRE) ANN ARBOR, Mich. — Congress is debating when to enact legislation that could affect university students receiving Pell grants. According to the U.S. Department of Education, the bill would require a revision of all state tax tables, making about 84,000 students ineligible for federal funding.
The 1992 Higher Education Act Amendments directed the U.S. Secretary of Education to update the state tax allowance tables by using income data from the Internal Revenue Service, but the department did not enforce this bill until this year. Secretary of Education Rod Paige said new tax tables wouldn’t decrease the Pell budget.
“President [George W.] Bush and I have made funding Pell grants one of the administration’s highest priorities. We have proposed higher increases in funding for Pell grants than were enacted during the eight years of the previous administration,” Paige said.
Margaret Rodriguez, associate director of financial aid at the University of Michigan, said the new tax tables would indirectly affect Pell grants.
“Pell grant eligibility is based primarily on the Free Application For Student Aid (FAFSA). However, the Department of Education is updating their tables that underlie need analysis, which will yield different outcomes,” she said.
All college students who apply for financial aid must fill out a FAFSA form every year they attend school, where they list their family’s incomes and tax return information. The new tables will take taxes enacted since 1988 into consideration, possibly lowering the amount Pell grants can offer students.
According to a 2003 Congressional Research Service memo, low-income applicants will not be affected.
“Expected family contributions of a significant number of very low-income aid applicants will be unaffected by these revisions, and that many relatively high-income applicants will find their eligibility for federal aid unaffected, although their EFCs may have risen,” the memo said.
The Department of Education estimates that postponing the required update would increase Pell grant expenditures for the 2004-05 school year by $270 million.
While changes will be made , Rodriguez said implications are still uncertain.
“We will run analyses to see how changes in Pell will impact funding for our students, but this issue has been so up and down that we do not know yet how it will affect students.”
“It is important to note that a number of family financial and household circumstances affect a student’s eligibility for aid each year, and therefore it is difficult to determine the overall impact of this update nationwide,” Paige said.
Financial aid is affected by annual changes in the amount of family income, household size, federal income taxes paid, the number of family members enrolled in college, and values of savings and assets.
“We intend to continue this strong support for the Pell Grant program in order to assist students from low-income families in their dream of obtaining a postsecondary education,” he said.
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