Post by LS on Feb 17, 2005 22:50:44 GMT -5
What he says... 
Bush Seeks Cuts to Boost College Grants
By BEN FELLER
WASHINGTON (AP) - To get larger college grants to poor students, the Bush administration wants to shrink guaranteed aid to banks and end a popular loan program.
President Bush's budget will also propose raising federal loan limits for freshman and sophomore college students, Education Department officials told The Associated Press Friday.
The budget proposal will be released Monday.
The new education details help clarify how Bush would pay for one of the biggest financial aid shake-ups in decades, one mostly built around Pell Grants for poor students. It amounts to a shifting of money that would require action from six congressional committees.
Bush wants to raise the maximum Pell Grant from $4,050 to $4,550 over five years - or $100 a year - and end a $4.3 billion deficit fueled by surging demand in recent years. His budget would make the yearly increases mandatory rather than leave them at the discretion of Congress.
Overall, his financial aid plan would cost roughly $28 billion over 10 years, with $19 billion for the Pell Grants alone. The budget would raise loan limits from $2,625 to $3,500 for freshmen and $3,500 to $4,500 for sophomores. Those caps haven't changed since 1986.
To help pay for it all, Bush wants to shrink a range of subsidies that the government pays to banks to encourage them to make low-interest loans, and to the agencies that insure the loans for the lenders. The savings would pay for more than half of the financial aid overhaul, said Sally Stroup, assistant secretary for postsecondary education.
``We found several billions that we believe we can reduce without causing any disruption in the student loan program,'' she said. ``Lenders will make a little less money, it's true.''
Most of the Bush proposals are ``generally supported,'' said John E. Dean, special counsel for the Consumer Bankers Association, which represents banks that made federal student loans.
**But at least one idea, he said, may be a tougher sell - a plan to make banks assume a higher risk that students will default on loans, lowering the financial exposure for the government. That could prompt some banks to reduce loans to high-risk students, such as community-college students whose post-graduation income is less certain, Dean said.**
The budget also would phase out Perkins Loans, which provided help to about 673,000 students in 2004. Stroup said the $6 billion saved could be better used as Pell Grants.
Stephanie Giesecke, budget director for the National Association of Independent Colleges and Universities, defended Perkins Loans as integral student aid. But she gave Bush credit for wanting to expand Pell Grants and said Congress may seek its own ways to fund the plan.
``The instinct to put more money into grants rather than loans is a good one, and one that would be welcomed by families,'' said James Boyle, president of College Parents of America. ``And it would help close a perception gap, where college is increasingly seen as out of reach for low-income families. ... It would help focus attention that grant money is available.''
___________________________________________
...And what he really means
Reduced U.S. Grants Will Hurt College Kids
Sheryl McCarthy
Under the new federal guidelines, how much income makes a New York City family of four too wealthy to receive federal grants to send the kids to college?
Can you believe $45,000?
It's true, even though in this town $45,000 is barely enough to make the rent and put food on the table. But that income would make a student ineligible for a federal Pell Grant under the revised tables published by the Department of Education last month. The tables determine how much parents are expected to contribute to their child's education.
The new formula will end eligibility for Pell Grants for an estimated 89,000 students nationwide and for more than 6,500 students in New York State. And it will reduce the grants for an estimated 1.3 million students nationwide and 95,000 in the state.
The prospect has Sen. Charles Schumer (D-N.Y.) seeing red. "One of the worst things for our country's future is when a young person has worked hard, but can't go to college because they can't afford it. The Pell Grants have been a lifeline . . . and to cut them just doesn't make any sense."
The Department of Education's new formula revises the amount of the deduction parents receive for paying state and local taxes. The formula hadn't been adjusted in 17 years, and the Bush administration says that in the meantime taxes in most states went down. The reductions in the Pell grants would save the program $300 million, but critics say the new formula is based on 2002 tax data and that the states have, in fact, raised taxes considerably since then.
At the City University of New York, the city's biggest educator of poor and lower middle-class students, an estimated 2,000 students stand to lose their Pell grants entirely, while 44,000 will have them reduced. The size of the grants ranges from $500 to $4,050, depending on income, and these are pretty needy students. Under the new formula, a family of four with an income of only $20,000 will see its Pell Grant reduced. The cuts will range from $100 to $300 a year, but that's money that can be needed for books, fees or a tuition increase.
If anything, the Bush administration should be expanding the Pell Grant program. College costs are climbing steadily, and in his budget proposal for next year Gov. George Pataki is asking for tuition hikes at the City University and State University schools. He has also proposed one of the least helpful financial-aid schemes of all time - withholding payment of half the money awarded under the state's Tuition Assistance Plan grants until after the students graduate. Pataki says he wants to give students an incentive to finish college. But this plan would force students to somehow scrape together half of their grant money themselves, on the promise that it would be reimbursed years later.
It's true that the poorest Pell Grant students won't be affected by the cuts, but it's stunning to me that a family of four living on $45,000 in this city won't be entitled to a dime in Pell money. Sens. Schumer, John Corzine (D-N.J.), Gordon Smith (R-Ore.) and Edward Kennedy (D-Mass.) have introduced a bill that would block the cuts from going forward this year.
This wouldn't be so disturbing if the Bush administration weren't asking Congress to come up with $80 billion more to support our actions in Iraq and Afghanistan. Our soldiers deserve all the support we can give them, but it's another sign of how our military adventures abroad are hurting our ability to do what's necessary here at home.
In his proposed budget for next year, President George W. Bush does propose increasing the maximum Pell Grant by $500 over the next five years. Given the other cuts, that's like putting a fig leaf on the program. With good jobs almost impossible to come by without a college degree, the Bush administration must remember that Pell Grants are not a form of welfare. It also needs to decide if it intends to leave no sophomores behind.
Bush Seeks Cuts to Boost College Grants
By BEN FELLER
WASHINGTON (AP) - To get larger college grants to poor students, the Bush administration wants to shrink guaranteed aid to banks and end a popular loan program.
President Bush's budget will also propose raising federal loan limits for freshman and sophomore college students, Education Department officials told The Associated Press Friday.
The budget proposal will be released Monday.
The new education details help clarify how Bush would pay for one of the biggest financial aid shake-ups in decades, one mostly built around Pell Grants for poor students. It amounts to a shifting of money that would require action from six congressional committees.
Bush wants to raise the maximum Pell Grant from $4,050 to $4,550 over five years - or $100 a year - and end a $4.3 billion deficit fueled by surging demand in recent years. His budget would make the yearly increases mandatory rather than leave them at the discretion of Congress.
Overall, his financial aid plan would cost roughly $28 billion over 10 years, with $19 billion for the Pell Grants alone. The budget would raise loan limits from $2,625 to $3,500 for freshmen and $3,500 to $4,500 for sophomores. Those caps haven't changed since 1986.
To help pay for it all, Bush wants to shrink a range of subsidies that the government pays to banks to encourage them to make low-interest loans, and to the agencies that insure the loans for the lenders. The savings would pay for more than half of the financial aid overhaul, said Sally Stroup, assistant secretary for postsecondary education.
``We found several billions that we believe we can reduce without causing any disruption in the student loan program,'' she said. ``Lenders will make a little less money, it's true.''
Most of the Bush proposals are ``generally supported,'' said John E. Dean, special counsel for the Consumer Bankers Association, which represents banks that made federal student loans.
**But at least one idea, he said, may be a tougher sell - a plan to make banks assume a higher risk that students will default on loans, lowering the financial exposure for the government. That could prompt some banks to reduce loans to high-risk students, such as community-college students whose post-graduation income is less certain, Dean said.**
The budget also would phase out Perkins Loans, which provided help to about 673,000 students in 2004. Stroup said the $6 billion saved could be better used as Pell Grants.
Stephanie Giesecke, budget director for the National Association of Independent Colleges and Universities, defended Perkins Loans as integral student aid. But she gave Bush credit for wanting to expand Pell Grants and said Congress may seek its own ways to fund the plan.
``The instinct to put more money into grants rather than loans is a good one, and one that would be welcomed by families,'' said James Boyle, president of College Parents of America. ``And it would help close a perception gap, where college is increasingly seen as out of reach for low-income families. ... It would help focus attention that grant money is available.''
___________________________________________
...And what he really means
Reduced U.S. Grants Will Hurt College Kids
Sheryl McCarthy
Under the new federal guidelines, how much income makes a New York City family of four too wealthy to receive federal grants to send the kids to college?
Can you believe $45,000?
It's true, even though in this town $45,000 is barely enough to make the rent and put food on the table. But that income would make a student ineligible for a federal Pell Grant under the revised tables published by the Department of Education last month. The tables determine how much parents are expected to contribute to their child's education.
The new formula will end eligibility for Pell Grants for an estimated 89,000 students nationwide and for more than 6,500 students in New York State. And it will reduce the grants for an estimated 1.3 million students nationwide and 95,000 in the state.
The prospect has Sen. Charles Schumer (D-N.Y.) seeing red. "One of the worst things for our country's future is when a young person has worked hard, but can't go to college because they can't afford it. The Pell Grants have been a lifeline . . . and to cut them just doesn't make any sense."
The Department of Education's new formula revises the amount of the deduction parents receive for paying state and local taxes. The formula hadn't been adjusted in 17 years, and the Bush administration says that in the meantime taxes in most states went down. The reductions in the Pell grants would save the program $300 million, but critics say the new formula is based on 2002 tax data and that the states have, in fact, raised taxes considerably since then.
At the City University of New York, the city's biggest educator of poor and lower middle-class students, an estimated 2,000 students stand to lose their Pell grants entirely, while 44,000 will have them reduced. The size of the grants ranges from $500 to $4,050, depending on income, and these are pretty needy students. Under the new formula, a family of four with an income of only $20,000 will see its Pell Grant reduced. The cuts will range from $100 to $300 a year, but that's money that can be needed for books, fees or a tuition increase.
If anything, the Bush administration should be expanding the Pell Grant program. College costs are climbing steadily, and in his budget proposal for next year Gov. George Pataki is asking for tuition hikes at the City University and State University schools. He has also proposed one of the least helpful financial-aid schemes of all time - withholding payment of half the money awarded under the state's Tuition Assistance Plan grants until after the students graduate. Pataki says he wants to give students an incentive to finish college. But this plan would force students to somehow scrape together half of their grant money themselves, on the promise that it would be reimbursed years later.
It's true that the poorest Pell Grant students won't be affected by the cuts, but it's stunning to me that a family of four living on $45,000 in this city won't be entitled to a dime in Pell money. Sens. Schumer, John Corzine (D-N.J.), Gordon Smith (R-Ore.) and Edward Kennedy (D-Mass.) have introduced a bill that would block the cuts from going forward this year.
This wouldn't be so disturbing if the Bush administration weren't asking Congress to come up with $80 billion more to support our actions in Iraq and Afghanistan. Our soldiers deserve all the support we can give them, but it's another sign of how our military adventures abroad are hurting our ability to do what's necessary here at home.
In his proposed budget for next year, President George W. Bush does propose increasing the maximum Pell Grant by $500 over the next five years. Given the other cuts, that's like putting a fig leaf on the program. With good jobs almost impossible to come by without a college degree, the Bush administration must remember that Pell Grants are not a form of welfare. It also needs to decide if it intends to leave no sophomores behind.