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Financial Aid Programs Affected By Budget Woes

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The U.S. Congress is struggling to agree on the budget and whatever state you live in is struggling too. One of the big problems is that much of the fluff has already been cut and there are not a lot of discretionary areas to reduce spending. Education is one of the targets.

How does that affect you? 

  • One proposal would have the Pell grant reduced by 15%.
  • Another would eliminate the new Year Round Pell program that was just rolled out to encourage students to accelerate their education by taking courses over the summer and winter sessions and getting additional Pell awards. It is a complicated program to explain to parents and students, but if a student successfully completes (C or better grades) enough units to reach an academic year plus one, they qualify to start the 2nd Pell award for that year. It is a program that rewards students for focusing on their education and finishing quickly.
  • The Federal Student Education Opportunity Grant (FSEOG) may be eliminated. This is a small grant for the neediest of Pell Grant students.
  • Perkins loans and other Perkins programs may be reduced. Of course there is another proposal to expand the Perkins loan program.
  • Subsidized loans for Graduate students may be eliminated.
  • States are looking at their grant and fee waiver programs.
  • Many states are raising fees for public institutions.
  • There will probably be a few cuts that no one ever thought of before.

There are lots of things in flux now. Your financial aid office will find it hard to make a definitive financial aid award because we don’t know what will happen. The one thing I know for sure:  You need to file your FAFSA/FAFSA renewal as early as possible and submit any documents requested. THEN, you need to register for classes at your earliest opportunity. When the dust settles on the state and federal budgets, financial aid offices across the country are going to scramble to correct any tentative awards they have made. Many offices are up 10-40% in financial aid applications for the 3rd or 4th year in a row. Get your paperwork finished, or plan your budget so that you can do without the aid until the financial aid staff get to your paperwork.

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