Updated: 9:15 p.m. Saturday, March 24, 2012 | Posted: 9:14 p.m. Saturday, March 24, 2012

Many local students may lose grant money

Narrowed eligibility requirements take effect in July for Pell Grant.


Many local students may lose grant money photo
Sonia Slomba, Central State University's Director of Financial Aid, helps student Chris Arrone, a junior communications major and grant recipient.

By Meagan Pant

Staff Writer

The federal government spends more than $1.2 billion annually to provide financial aid for nearly 354,000 Ohio college students who come from low-income earning households.

That amount ranks Ohio fifth in the nation for total aid its residents received out of the $41 billion Pell grant program, according to the U.S. Department of Education. In the 16 public and private colleges and universities in southwest Ohio — extending from Edison Community College in Piqua to the University of Cincinnati — more than 60,000 students receive a Pell grant, which does not have to be repaid.

This summer, major changes to the 40-year-old program will impact an estimated 145,000 low-income college students nationwide when narrowed eligibility requirements take effect.

The new restrictions, enacted in December to rein in spending on the federal financial aid program, are expected to affect hundreds of students in the Dayton region who will no longer receive the support. The changes come as college affordability and the nearly $1 trillion in student loan debt is drawing increased attention.

So far, college officials said they do not know how many of their students will be affected.

“We’re really worried about the number of students who could lose their Pell grant this coming year,” said Amy Barnhart, director of Wright State University’s Office of Financial Aid. “It’s really hard to gauge at this point, because we haven’t received guidance yet.”

As of July 1, students can only receive the grant for six years, down from nine years. The new time limit retroactively applies to those already working toward a degree, meaning students who have attended 12 full-time semesters, or its equivalent, can no longer qualify for a grant.

Other changes include reducing the amount of annual income a student automatically qualifies for a full award to $23,000, down from $30,000. Additionally, students will no longer be able to take an “ability to benefit” test to qualify, and instead must have a high school diploma or GED, according to Rich Williams, higher education advocate for U.S. Public Interest Research Group.

“When we talk about changes and cuts to the Pell grant program, we’re talking about ending the path to graduation for many students,” he said.

‘Falling short’

More than $200 million in Pell grants are given to students at 16 area schools, according to area colleges and universities.

Grant amounts ranged from $555 to $5,550 and could be used at 5,400 participating institutions, including public, private and for-profit schools.

The program covers the smallest share of the cost to attend college ever — paying for less than a third of the price to attend a public four-year college full-time.

“It is that grant that makes a difference in whether or not they can go to college,” said Megan McClean, managing director of policy and federal relations for National Association of Student Financial Aid Administrators.

Recipients are twice as likely as other students to take out a loan to pay for their education, Williams said.

“If their Pell grants were to be cut, as many proposals in Congress this previous year were floated, they would face many tough choices, one of which is whether they can stay in school,” he said.

The retroactive limit on how long students can receive the aid will disproportionately affect black students, who make up 41 percent of Pell recipients nationwide who receive the grant for more than a total of six years, according to the Institute for College Access & Success.

At Central State University, one of the nation’s oldest historically black colleges, 88 percent of students receive a Pell grant. The university has the highest average award in the state, at $4,527 — which covers a third of the $13,678 cost of tuition, room and board for in-state students, said Phyllis Jeffers-Coly, dean of enrollment services.

“If Pell is supposed to be the solution to affordability, it’s falling short,” Jeffers-Coly said.

Funding debate

President Barack Obama proposed increasing the maximum amount of the award by $85, up to $5,635, in his fiscal year 2013 budget, which will be debated by Congress.

Congressional Democrats and Republicans have expressed different opinions on whether the Pell program should be expanded to include middle-class students or scaled back to be more affordable to taxpayers.

Congress should find ways to increase grant awards for eligible students and keep pace with inflation without adding to the nation’s deficit, said U.S. Rep. Robert Andrews, D-N.J., a member of the House Committee on Education and the Workforce.

“In order for our economy to bounce back and grow jobs, we need to expand Pell grants – not cut them – and stop placing our nation’s tax burden on the middle class who struggle in the face of mounting student loan debt,” said Andrews, who said he was a Pell grant recipient.

But U.S. Rep. John Kline, R-Minn, who chairs the committee, said expanding the program has already gone “beyond what taxpayers can afford, putting the program on a path to bankruptcy.

“In the last five years alone, Pell grant program costs have increased from $13.7 billion to a staggering $41.5 billion in the 2012-13 school year,” he said.

The Pell program faces a $7.5 billion shortfall in fiscal year 2014, according to the National Association of Student Financial Aid Administrators.

Because students who qualify for the grant are automatically entitled to the aid, shortfalls can occur when payments exceed the amount budgeted to the program.

The program, which was first made available in 1972, faced funding shortfalls in four of the five years from fiscal years 2007 to 2011 as spending increased during the weak economy and as more students pursued a degree.

The issue was addressed by making changes to other federal aid programs and rolling back some Pell benefits, including no longer allowing students to receive two grants in one year.

In 2011, the grants went to 9.4 million students nationwide, or about 27 percent of all undergraduates, according to the U.S. Department of Education.

‘It’s essential’

Sinclair Community College anticipates the eligibility changes could affect many students. In the first two quarters of the year, 13,704 students received a Pell grant.

“Immediately, students won’t really be aware,” said Michael Carter, Sinclair’s senior vice president for enrollment and student services. “Over the course of time, it could have a great effect because the large number of our students aren’t full-time students.”

Sixty-two percent of Sinclair students attend part-time.

Some students who are no longer eligible for a Pell grant have already been informed they will receive the aid in the coming school year, according to the NASFAA. The organization is asking the Department of Education to hold schools harmless for those overpayments.

Kettering College student Chris Ponder said he could not afford his associate degree without a Pell grant. Ponder, a father of two, is a full-time student after working as a delivery driver. He is studying to be an X-ray technician.

“It’s essential to me going to school,” he said. “There’s always that concern about well, what if we don’t get them this year.”

Edison Community College student Lacey Mullins said she could not have gone back to school after being laid off from a merchandise company in 2008 without the Pell grant to cover her tuition. The grant allows her to care for her two small children as she takes online classes to pursue a degree in medical office support.

“I’m going back to school to provide something better for my kids,” she said. “I don’t have to worry about whether I’m going to be able to get a job right after school and pay off my loans.”

Barnhart said it is difficult for Wright State to help students plan how they will pay for college with changes to the Pell program, along with reductions to the state’s need-based Ohio College Opportunity Grant in recent years.

“It makes us vulnerable because our students have to drop out of school, which hurts our graduation rate,” she said, adding Wright State will also offer supplemental financial aid to students who lose their grant. “It’s a big problem.”

‘Commonsense reforms’

Discussion on the future funding of the Pell program likely will not happen until after the November election because of the “last-minute approach to federal funding,” according to NASFAA.

The NASFAA said failure to address the looming shortfall could mean more restrictions to who is eligible for the aid. Kline said Congress must continue to make “commonsense reforms” to keep the program available to students who need it most.

“We need to make tough choices, not simply rely on short-term fixes that ignore the real challenges facing the program,” the GOP leader said.

University of Dayton’s Kathy McEuen Harmon, assistant vice president and dean of admission and financial aid, said she hopes people will take notice and write their members of Congress.

“Voters are the ones who are going to ensure it stays in existence,” she said.

Pell Grant eligibility:

Demonstrated financial need

The cost of attending the student’s school of choice

Enrollment full-time or part-time

Whether student attends for full academic year or less

Requirement that undergraduate be earning first bachelor’s degree (with the exception of certain teacher certificate programs)