Students across the nation face a reduction in financial aid next school year due to cuts in the national Pell Grant program.
According to some, University of Wisconsin students may be some of the most affected, due to Wisconsin’s high taxes.
“This is a major concern, and the impact on our students is a very substantial setback,” said UW System Director of Communications Doug Bradley. “It’s a loss of about $3 million in the UW System … the timing of this couldn’t be worse. We cannot afford to have this happen in Wisconsin.”
Pell Grants are a major source of financial aid for students, Bradley added.
“For those of us that rely on this, it makes a big difference in the amount of loans we have to take out,” Lisa Pritzkow, a UW accounting graduate student, said. “It’s a big hassle.”
The federal Pell Grant program provides grants to undergraduate and some post-baccalaureate students in need, according to the Department of Education. The amount of money granted to the student depends on a federally mandated formula used for many other financial-aid grants as well.
The reduction in the grants is due to an updated version of the formula used, Steve Van Ess, director of student financial services at UW, said.
“The Department of Education hasn’t updated the state formula since 1988, and this is the data we have been using each year,” Van Ess said.
The formula, which is supposed to be updated regularly, includes students’ and parents’ income, the family household size and the number of other family members attending postsecondary institutions.
Recent updates in the new formula are based on tax information from the year 2000. It calculates how much money students will receive in grant money next year.
This is important to note for two reasons, according to Van Ess. First, the data has not been updated for a long time and what would normally seem to be modest changes from year to year will be a significant reduction in allowances suddenly. Also, because the national economy was better in 2000 than it is currently, the effect of the change makes students and parents appear to have better incomes and be less eligible for grant money, Van Ess said.
According to Van Ess, 3,745 UW students received about $9 million in Pell Grants for 2003-04.
“Based on last year’s data, Madison students could lose up to $400,000 in Pell Grants, with an estimated loss of $300 from each student,” Van Ess added.
Some Republicans agree with the decision, which will result in overall program savings of $300 million next year. The Pell Grant program currently stands at a $4 billion deficit.
The Department of Education projects an increase in the number of students receiving Pell Grants due to an increase in spending of $856 million for the program. The total proposed spending for 2005-06 is $12.9 billion for the Pell Grant program.
The Pell Grant maximum award of $4,050 has been frozen for the past three years, but a recent press release announced President Bush plans on proposing to increase the maximum grant to $4,550 by 2010.
Still, many Democrats have criticized the Bush administration for reducing the amount of aid to each student while tuition costs have risen significantly.
“[The] report that the Bush administration is restricting access to Pell Grants … is more unwelcome news for Wisconsin families and students this holiday season,” Gov. Jim Doyle said in a release on Dec. 23, the day of the announcement by the Bush administration. “I urge the Bush administration to reconsider this decision, so that families in Wisconsin and across the country can continue to have full access to Pell Grants.”