Aid funding cuts affects students

President Barack Obama’s re-election presents the question of whether federal financial aid will be cut.

Chancellor Rita Cheng said aid plays a large role in SIU’s enrollment.

Obama said there would be no sequestration cuts. Sequestration refers to mandatory cuts made to federal programs.

“First of all, the sequester is not something I proposed. It’s something that Congress proposed,” he said Oct. 22 during the presidential debate. “It will not happen.”

SIU President Glenn Poshard said as of November, the state is behind in payments and still owes SIU money for both the previous and current fiscal years. He said $9 million is owed for the 2013 fiscal year that started July 1, 2012. Poshard said he does not believe he will see the remainder of money owed until December — almost five months into the fiscal year. He said the state owes SIU a total $107 million.

Families and students who receive financial aid are being affected by the recession. Poshard said this puts pressure on the university to deal with their own financial crises while still helping the students who need financial assistance.

Cheng said 87.5 percent of students enrolled have some type of aid, and 23 percent are student employees.

“It does not bode well,” Poshard said. “We have enacted many things that have affected our operations here at the university.”

Poshard said SIU enacted a series of cuts as well as a freeze on hiring to save money. He said many retired university employees have not been replaced in the past two years.

“We cut back and decreased the budgets on all of our colleges, and everything from travel to supply expenses are affected,” Poshard said.

He said the state gave SIU $248 million annually as of 2002, but the university is receiving $203 million this year.

“If we receive another state cut, we could see the amount go below $200 million,” Poshard said.

The three main sources of financial aid funding besides institutional aid are the federal Pell Grant, Stafford Loans, and the state level MAP grants, he said.

“We are doing the best we can — fiscally — under the circumstances,” Poshard said.

Federal financial aid has stayed stable, he said, but funding for the MAP grants has diminished.

“On the federal level, there is an agreement Congress made that proposes sequestration for January 1st, 2013 if no budget plan is approved,” Poshard said.

Cheng said an 8-percent decrease in Pell Grant funding would be enacted if sequestration happens. SIU currently receives $28 million from the Pell Grant, she said.

“The Pell Grant is not sustainable because more students are needing financial assistance, but no additional funding is being put in,” Cheng said.

MAP grant competition grows each year, she said, and the grant’s fundings  ran out in March for the fiscal year, a month earlier than usual.

“When it ran out, we had no forewarning or indication, so … we were unable to inform students to apply if they were seeking state aid before it ran out,” Cheng said. “In past years, we have received communication that it almost ran out.”

Cheng recommends students seeking aid to apply as soon as possible, because competition for the aid is only increasing.

As far as changes in the future of financial aid, Cheng said there is an expectation for families to contribute more and meet more specific qualifications.

“The stress for families to pay money for a college education is rising dramatically,” she said.

Beginning next year, students will not be eligible for the Pell Grant if they have poor academic standing or have been in school longer than 12 semesters.

Terri Harfst, director of financial aid, said a subsidized loan change will also take place next year.

“From my vantage point, the Department of Education is not going to start paying financial aid indifferently anymore,” she said.

Harfst said while the need for financial aid is severe, that aid is not indefinite.

“With those two changes, this proves that they do not have unlimited resources in Washington,” she said.

In the future, she said, students can expect higher financial aid qualifications.

“I don’t think that is unreasonable,” Harfst said.

She said she believes the chancellor has helped make up for budget cuts in her fundraising efforts.

Cheng said the Pepsi Corporation, for example, has contributed $1 million to the Chancellor’s Excellency Scholarship.

Poshard said besides the chancellor’s effort to raise institutional financial aid, SIU also has the lowest tuition rate among all of Illinois’ public research universities. He said having a low tuition rate eases the college expense on students and makes financial aid a less imminent need in some instances for SIU students.

 

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