Grant funding falls short in Clinton’s proposal

by Sean Madigan

While President Clinton’s 2000 budget request provides a slight boost in federal aid for higher education, under Clinton’s package students who receive Pell Grants will continue not to get as much money as the Higher Education Act allows for.
Of his $1.766 trillion budget, Clinton proposed to increase aid 3.9 percent to bring the total student aid package up to $52.1 billion. But higher education officials agree funding could be better.
“Everything helps, but there is a feeling out there that we could do better,” said Judy Swanson, associate director for client services at the Office of Scholarships and Financial Aid. “We need a healthy increase to see (student aid funding) start recouping its losses.”
Although Congress allocated a maximum increase of $300 under the Higher Education Act, Clinton’s plan would ask for less than half that amount, $125. This is how much the grant increased last year.
In 1965, the federal government passed the act which states how much money Congress can legally allocate to higher education. Every five years, Congress reviews and amends the amount that can be authorized.
Under Clinton’s proposal the maximum Pell Grant would increase 4 percent to $3,250.
However, not only is the amount of the increase less than is allowed by the education act, but the total base amount of the grant is less than it could be, too. For 1999-2000, Congress could allot as much as $4,500 per student per year for the grant. But because the base amount of the grant this year was only $3,125, it would be unlikely for Congress to approve an increase so large.
Phil Lewenstein, spokesman for the Minnesota Higher Education Services Office said the actual funding is falling short of what Congress is authorizing.
“The gaps just keep getting wider,” Lewenstein said.
The Pell Grant provides funding for students who demonstrate the most financial need. Unlike a loan, the Pell Grant does not need to be repaid.
In 1997, more than 66,000 undergraduate students in Minnesota received Pell Grants. On the Twin Cities campus alone, more than 5,493 students received Pell Grants totaling $8.7 million.
“It’s positive that the Pell Grant is going up $125, but it’s very far behind what the actual authorized amount is,” Lewenstein said.
To help supplement the discrepancy between the rapidly increasing cost of higher education and the moderate increases in federal student aid, the government issues Federal Supplement Education Opportunity Grants to students with exceptional need.
Right now Pell Grants cover roughly one-third of the total annual cost for higher education for students who qualify. The SEOGs help make up the difference.
The University’s current policy is to match SEOGs dollar for dollar with Pell Grants.
Clinton’s proposal would also increase aid for Work Study to $64 million, a 7.4 percent jump from last year. Work Study is a financial aid program that is designed to help student get jobs. Employers benefit because the government pays 75 percent of the student’s wages while the employer only covers 25 percent.
Students benefit because the money they earn is not counted against them as earned income when they reapply for financial aid the following year.
Funding for the Perkins Loan, which provides low-interest rates to students, would remain the same. The budget calls for $100 million for the loan, the same amount allocated in 1999.
Swanson warns that if returning students do not return their Free Application for Federal Student Aid before March 1, they might not receive all of the aid they are eligible for.
More than 800 University students are currently in the Work Study program.