Delivering American University's news and views since 1925. | Wednesday, November 14, 2018

Congress to pass changes to student federal aid act

AU students using loans to help pay for college may get assistance in paying off those loans after graduation once Congress passes a compromise version of the current College Cost Reduction and Access Act. After it is passed, the bill must be signed by President Bush, who has threatened to veto it twice in the past.

For the most part, the bill focused on repayment options for people who take out loans to pay for their college educations. The legislation proposed plans to reduce subsidized loan rates, grant loan deferment for some Armed Forces members, grant loan forgiveness for public service employees and change methods of loan repayment based on income, according to the bill's Web site.

History of aid

The latest change to federal financial aid is one in a history of ever-expanding and ever-changing financial aid programs in the United States, which began with the first private scholarship at Harvard University in 1643.

1862 - The Morrill Act gave federal lands to states in order to establish colleges offering programs in agriculture, engineering and home economics.

1944 - The GI Bill provided money for college to returning World War II veterans.

1958 - The National Defense Education Act provided funding to stimulate the study of math, science and foreign languages.

1964 - The Economic Opportunity Act created the Federal Work-Study program and gave funding to Head Start, Upward Bound, Vista and Job Corps programs.

1965 - The Higher Education Act of 1965 created the Educational Opportunity Grant Program and the Guaranteed Student Loan Program.

1978 - The Middle Income Student Assessment removed all income qualifications for the Guaranteed Student Loan Program.

1992 - Amendments to the Higher Education Act required the use of the FAFSA, changed the structure of the Perkins loan program and made other changes.

SOURCE: Center for Higher Education Support Services Inc. www.chessconsulting.org/financialaid/history.htm

The bill also loosens income standards for students receiving Pell Grants and provides money to Upward Bound and TEACH, programs that give money to more specific types of students.

The impact to financial aid will probably not be significant for AU students, said Shirleyne McDonald, an associate director at the Office of Financial Aid at AU.

"Because it is focused on those who are in repayment, the impact will be minimal," she said.

Financial Aid will monitor the bill's progress to ensure students get their financial assistance, McDonald said.

"We take a more aggressive approach [to finding students financial aid]," McDonald said. "Should this legislation be passed into law, our office will make every effort to inform and award eligible applicants."

The College Cost Reduction and Access Act stands a greater chance of becoming a law than it did this summer because of congressional changes. According to The Chronicle of Higher Education, Bush threatened to veto the bill twice during its introduction and deliberation. The Department of Education sent a press release in July stating that senior advisers implored Bush to veto.

The Bush administration would not pass the bill because it did not focus enough on the needs of low-income students in school and diverted too much money to helping those out of school, Department of Education Secretary Margaret Spellings said in the press release.

Since then, Congress has changed parts of the bill to meet the requirements of the Bush administration so that the president will consider signing it. Congress scaled back the number of new programs and raised the maximum Pell Grant to Bush's requested amount of $5,400, The Chronicle reported. In addition, the changes expanded the bill's cost to $21 billion.

Newly-implemented aid programs cause more administrative work for the Office of Financial Aid because it must calibrate its systems to find students who would be eligible for those programs, according to McDonald. Every U.S. university is given the option of having its students identify themselves for assistance or having the university help its students find aid.

At least 2,700 AU undergraduates received financial aid in the 2005-2006 school year. At least 2,200 received need-based awards, according to the AU Office of Institutional Research and Assessment.

In addition to need-based awards, the Office of Institutional Research and Assessment reported that students on merit scholarships received, on average $15,000 a year. Students on athletic scholarships were awarded $17,000 a year on average.

Even if the bill becomes law, it will be difficult to predict any change in the enrollment figures for AU, McDonald said. The number fluctuates each year. While typically each year the number of financial aid applicants increases, McDonald doubts it is because of the amount of money offered by the government.

For one student, major problems do not come from not getting enough money. Derrick Milburn, a sophomore in the School of Public Affairs, said timing was his greatest problem.

"The package gets posted in August or July, so you have to deal with financial aid during the school year," Milburn said.


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