Bush’s budget plan cuts student aid

The proposal includes a $4.6 billion reduction in Pell Grants funding and cuts to Perkins Loans.

by Aidan M. Anderson

Coming hot on the heels of congressional approval of the 2006 Budget Reconciliation Act, President George W. Bush’s 2007 federal budget proposal again takes aim at trimming spending on student aid programs.

In addition to the passage of the act’s provisions, which require greater federal loan origination fees, students and their families will be faced with fewer federal funding options.

Issues affecting student borrowing are a $4.6 billion reduction in funding for Pell Grants and the elimination of the Perkins Loan program.

This academic year, the University dispersed $14 million in Pell Grants to 5,372 students, said Kris Wright, director of the University office of student finance.

Perkins Loans are a good option for low-income students because they are not dependent on credit history.

The University uses Perkins Loans to help students cover the gap between other financial aid and the actual cost of attendance, Wright said.

Perkins Loans are administered by the University, repaid by the student and recycled into a pool from which the University disperses the loans to other students.

The budget recalls $664 million in Perkins Loans funding from higher education institutions.

“They not only want to not fund new Perkins Loans through the appropriations process, but they also want to take back from campus those funds that have come back in repayment,” said University Federal Relations Director John Engelen.

Any cuts to these federal programs will come in addition to those included in the 2006 Budget Reconciliation Act, which the president is set to sign today, Engelen said.

“The fact is, it’ll be more expensive for students to borrow,” he said.

University undergraduates and their families took out $92 million in federal loans during academic 2005-2006, Wright said.

The president proposed a $600 million increase in Academic Competitiveness Grants for Pell Grant-eligible students who maintain a 3.0 grade point average and major in technology, math, science or a foreign language.

The president’s budget proposal includes a 7.9 percent increase in National Science Foundation funding. This should result in more money for the University because the NSF is the University’s second-largest source of funding.

In fiscal 2005 the University received about $53 million from the foundation, said Ed Wink, vice president for research.

Some University administrators call state delegates with their input on funding but on limited, specific issues, Wright said.

“For the most part, we just watch it unfold like everyone else does,” she said.

In an e-mail to the Daily, U.S. Rep. Betty McCollum, D-Minn., called the president’s budget proposal a “broken promise” to increase Pell Grants and make college more affordable.

“He has chosen to deny hundreds of thousands of students low-cost Perkins Loans while pushing regressive tax cuts for the wealthy,” McCollum said. 

John Yarian, communications director for U.S. Rep. Gil Gutknecht, R-Minn., said Gutknecht’s staff is studying the proposal and plans to react.