New money from feds for students

So far, this year has been a momentous one for students because of legislation passed at both the federal and state levels that increases student aid.

So far, this year has been a momentous one for students because of legislation passed at both the federal and state levels that increases student aid.

With the passage of health care reform and with it the Student Aid and Fiscal Responsibility Act included in the federal Reconciliation Act, lawmakers can proceed in consideration of other student-related issues, including the DREAM Act and further financial regulation and lending reform.
    The Student Aid and Fiscal Responsibility Act, immersed in the Health Care and Education Reconciliation Act of 2010, was passed on March 25.

    The bill, which had been stuck behind health care in the Senate Health, Education, Labor and Pensions Committee since it passed the House in September of 2009, was used to supply the major pieces of student aid reform that made it into the Reconciliation Act in March, according to Katie Markey, Associated Students of PSU interim legislative affairs director.

All of its proposed changes amend the Higher Education Act of 1965, or U.S. Code 20, which further codifies the reforms.
Through SAFRA, the Federal Pell Grant program—a federal aid program which provides grants to eligible low-income undergraduate [and some graduate] students to help with the cost of attendance—is expanded by $36 billion over the next ten years. $13.5 billion of this appropriation will be immediately disbursed for the fiscal year of 2011 to expand the program for students today—not years down the road—Markey said.

Benefits to Oregon

    Markey also said that she expects a full $54.7 million to be disbursed to Oregon’s First Congressional District, meaning that students in the area will directly benefit from Pell Grant reform. The rest of Oregon will get roughly $325.2 million over the next ten years if today’s numbers of current recipients are used as an estimation. 
Students applying for aid under the Federal Application for Free Student Aid this spring, expecting assistance for the 2011–12 school year, will begin to see changes as early as July 1.
These funds will both help to further guarantee the program, according to the legislation, and will annually increase the maximum grant award value authorized under the Pell Grant program. This means that in 2011, and in years beyond, the awards will first increase relative to the increases in the cost of living and consumer price indexes—acknowledging that the economic climate faced by students from year-to-year is dynamic.
By the 2013–14 school year, a maximum grant of $5,550 will be made available to eligible students, a value that may even become higher, depending on how quickly the value of the grants increases between now and 2013. Further increases are authorized using this appropriation through the 2018–19 school year.

Benefits to PSU
    For PSU, these reforms mean that more students, who previously would have been deterred from going to college because of the prohibitive costs, will now choose to go. In many ways, this will directly correlate with higher enrollment numbers.
The reforms will result in “better quality of campus life and a more diverse student body with more diverse backgrounds,” Markey said. But the changes will be gradual and not overtly noticeable.
In this same vein, SAFRA also increases the funding for the College Access Challenge Grant Program, which, according to the Department of Education Web site, is meant to “foster partnerships among federal, state, and local governments and philanthropic organizations through matching challenge grants that are aimed at increasing the number of low-income students who are prepared to enter and succeed in postsecondary education.”
Programs authorized under the CACGP “focus on financial literacy” of students, according to Markey, and “are available to students in programs that emphasize awareness of personal finance to help increase enrollment and retention rates.”
Further potential benefits to PSU include the investment of $2 billion over the next four years in community colleges around the U.S. The dual-enrollment program with Portland Community College gives many students, who otherwise would not have pursued a four-year undergraduate degree, the opportunity to do so.
After attending PCC, many students choose to make the full transfer to PSU. If more students now begin to attend PCC—numbers are already at record highs at community colleges around the nation—then it follows that enrollment may also increase in the future at PSU.

    Perhaps most importantly, SAFRA puts an end to the Federal Family Education Loan program, through which the government guarantees private loans to students. This both expands direct federal lending and forces banks to, not only be more accountable for their lending, but to compete for contracts with students—a move which should reduce interest rates at a time when students are struggling to find a loan with payments that won’t put them into bankruptcy.
Monthly payments are also reduced to 10 percent of discretional income [rent, cost of living, etc.] from 15 percent, and the repayment period for all student borrowers drops from a 25 to 20-year debt forgiveness deadline, as long as one consistently makes all monthly payments.


    Also pending in Congress is the Development, Relief and Education for Alien Minors Act or DREAM Act, which would provide an estimated 100,000 undocumented students—who otherwise would not have been able to attend college—in Oregon and countless more around the country the opportunity to become citizens six years after they begin their degree at a U.S. university if they comply with certain other requirements.
If students have been in the country since before the age of 16, graduated from a U.S. high school in good standing, and if they complete their post baccalaureate degree with no major additions to their personal criminal record, they are placed on the fast-track to citizenship, Markey said. This legislation is important, she added, because it “doesn’t seem fair—we’re here to benefit students.”