Higher education recently received its biggest financial aid boost in over 60 years last week after both Congress and President George W. Bush passed the College Cost Reduction Act.
The bill, signed by President Bush on Sept. 27, is the single largest government investment in higher education since the G.I. bill of 1944. Officials claim the bill will make college more affordable to students by increasing the amount of available federal aid by about $20 billion over the next five years. Furthermore, the bill will not increase taxes, as the funding will come from cuts in subsidies the government pays to student loan lenders.
The legislation increases the maximum Pell Grant, a fund which goes to students with the lowest income rates, from $4,050 for the 2006-07 school year to a maximum of $5,400 by 2012 beginning July 1, 2008.
Additionally, the act increases government loan options for students and lowers students’ reliance on costly private loans. It also lowers loan interest rate fees and broadens federal aid eligibility to include more students.
UCSB Director of Financial Aid Ron Andrade said the legislation was especially important for UCSB, where almost 25 percent of the student body receives Pell Grant financial aid.
“If you rank all of the UCs, UC Santa Barbara accepts a much higher percentage of low income and needy students than any other campus,” Andrade said. “For the 2006-07 school year, UCSB had 4,438 students receiving Pell Grant financial aid, which is nearly a quarter of the population.”
Although this is the biggest increase in federal financial aid in decades, Andrade said it is still not enough to help all low-income students.
“The problem with the Pell Grant is that it has remained stagnant for so many years, while the cost of attending college has significantly increased,” Andrade said. “The average student living in the dorms at UCSB has to pay around $26,000 for a nine-month school year at UCSB. However, the maximum Pell Grant only pays for about $4,000 of that total cost.”
Andrade said it would take a much larger increase for the Pell Grant to truly act as a cost-effective way for low-income students to attend school.
“In an ideal world, the Pell Grant should pay for 50 percent of the cost to attend school, so it should award around $12,000 to needy students,” Andrade said.
Pell Grants are awarded based on familial income information provided by students on their Free Application for Federal Student Aid. Following the submission of a student’s FAFSA, the government uses a formula to calculate an expected familial contribution, which details exactly how much aid a particular applicant can receive.
Rebecca Thompson, legislative director of the United States Student Association student advocacy group, said her organization played a large role in the passage of the act.
“It was really the effort of college students all across the country and especially those from California that helped get this bill passed,” Thompson said. “We had students writing in, calling and visiting members of the California legislature, as well as students speaking in front of both the House and Senate education committees. It was a combination of both a grassroots and federal campaign that ultimately got the bill passed.”
Like Andrade, Thompson said she thinks the government should continue to increase higher education opportunities for low-income students.
“If the Pell Grant was to keep up with the increase in college costs, it would have to award over $10,000,” Thompson said. “Yet, there is no denying that this is an excellent first step in making higher education more affordable, and we will continue to fight for even further reform.”