Thousands of students may lose Pell grants

By Gus Bode

Daily Kent Stater (Kent State U.)

(U-WIRE) KENT, Ohio – More than 80,000 students could lose government grants for college next year.

Budget officials at the Department of Education estimate that 84,000 students nationwide could lose their Federal Pell Grant eligibility for the 2004-2005 award year.


Additionally, the department estimates the maximum Pell Grant amount will be $270 million less than previous years. About 100,000 students will receive less money next year.

Pell Grants are federal grants for college that students do not have to pay back.

The Department of Education adjusted the formula that determines a family’s expected contribution to college expenses last May. This formula decides how much financial aid a student will receive and how much a family will contribute to college costs.

The incomes, the allowances and the assets of both parents and the student determine expected family contribution. The formula deducts state and local taxes — deductions vary from state to state.

Families will be expected to contribute more to college expenses because the change in the formula reduced the percentage of deductions in most states. New tax tables will make a family’s income appear higher than it is. Previously the tax table had not been changed since the 1994-1995 award year.

Pell Grants are awarded based on need, and with the change, some students may now be ineligible to receive them.

Mark Evans, director of student financial aid, said it is too early to speculate how this new change will directly impact Kent State students, but in the past a large amount of students have relied on Pell Grants.


Evans said approximately 10,224 students at all eight Kent State campuses received Pell Grants in the 2002-2003 award year. Kent State students received a total of $23.5 million in Pell Grants last year.

In most instances Pell Grants are available to undergraduate students who are determined financially eligible by a standard formula.

By request of Democratic lawmakers, the Congressional Research Service recently released a memorandum describing the possible impact students will notice because of the formula’s change.

According to the memo, the percentage of taxes that can be deducted was unchanged in 13 states. Percentages rose in states like Connecticut, Nevada and New Jersey, giving them more financial aid. But in states like Ohio it decreased, giving students less aid. This is because Ohio’s tax deductions have been reduced by 3 percent for dependent students and by 1 percent for independent students.

But this 3 percent is not up to date, Evans said. He said the new tax tables are three years old and do not take into account today’s economy. Evans said this makes incomes look higher and is not an ideal situation.

Recently, Ohio increased its sales tax; however, the new tax tables do not reflect the increase in Ohio taxes. Ohio citizens pay more taxes today than a year ago, but with the change students will deduct a smaller percentage of taxes when they fill out their application for financial aid.

According to Evans, not only will Pell Grants be impacted but other financial aid as well. He said even a slightly higher family income shows lower need base and this could affect how much financial aid a student could receive overall.

“Students at low income levels will face minimal impact,” Evans said. “Those at the higher levels will be affected the most.”

Students who currently have Pell Grants may now face having to take out more students loans.

“The Pell Grant is the only grant I have,” said Kristina Milat, junior nursing major. “The rest of my financial aid is all loans that I will have to pay back.”

Without her Pell Grants, Milat would be forced to increase her loans and eventually will have to pay back all the money she borrows now.

“I’m pushing working four days a week now with my nursing classes,” Milat said. “If I worked more I would have no time to study and my grades will suffer.”

Evans said there is still financial aid available for students this year.

A portion of the 8 percent tuition increase created additional scholarships for those who need more assistance paying their tuition, he said.