More FinAid for Students from Pricey Places?

Paying for College
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<p>From today's Chronicle of Higher Education:</p>

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[quote]
Cost-of-Living Adjustment Could Increase Aid to Students From Pricey Metro Areas</p>

<p>By Kelly Field</p>

<p>Adding a cost-of-living adjustment to the federal formula used to determine families' financial need could increase aid to students from high-cost cities like New York and San Francisco, but decrease it to students from less expensive parts of the country, according to a report released today by the Government Accountability Office.</p>

<p>The report, which was requested by Congress, looked at three options for accounting for geographic cost differences in housing and other expenses. It found that the changes could benefit about 17 percent of student-aid applicants but hurt about 37 percent of them.</p>

<p>The biggest beneficiaries of an adjustment would be Pell Grant recipients with relatively high incomes living on the East and West Coasts. A family in San Francisco earning $51,000 a year, for example, could see their $860 Pell Grant increase to $3,060.</p>

<p>The adjustments would not greatly increase the cost of the Pell program, because many grant recipients already receive the maximum award or do not live in high-cost areas.</p>

<p>The report notes, however, that adding a cost-of-living adjustment would be inconsistent with broader federal efforts to simplify the student-aid process and could make the formula more difficult to explain and administer.

[/quote]
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<p>For six years, I have been involved in a grant-funded counseling program in Queens (NY), that provides private college counseling to girls who might otherwise not get it. Each year I see some of my advisees receive need-based financial aid packages that don't meet their need at all because the formula doesn't factor in the high cost of living in New York City.</p>

<p>This change will be good news for them, but I also realize that it could hurt other families from less expensive areas (where wages are typically lower, too) who are struggling to pay for college as well.</p>

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<p>$30,000 might buy more in rural South Dakota than it does in NYC, but that family has some other issues to face. For example, they MUST send their child away for school, because there are no local options. The NYC family can most likely send their child to a local school & the kid can live at home. The list of “unfair” could go on & on … I think it opens a real can of worms to pick a couple areas & adjust for those areas only. You are correct in pointing out that the feds hope to make the aid process simpler. Frankly, they are going toward a “simple” that funnels aid to the very poorest. $20,000 doesn’t buy much anywhere.</p>

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<p>I would agree with kelsmom that what’s fair and unfair is quite difficult to sort out. In addition, it is also difficult to sort out what constitutes a choice and what doesn’t. To some extent parents choose where to live, even if that decision was made many years ago and it would be hard to uproot the family now. To me the foundation of fairness in FAFSA is that it does not make judgments about the choices people make. Otherwise FAFSA would begin to look like the tax code.</p>

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<p>Great example of simplifying the FAFSA right here.</p>

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<p>I hope it is great news for me because I live in NY and my salary on the scale of the US standard is considered high even though I am a nurse and my husband is a teacher. We work hard and don’t have any luxuries. Taxes are high here and we get minimal help with college costs.
What I make in NY is considered middle class for NY but would be considered affluent somewhere else.</p>

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<p>St Andrews - IMHO, FAFSA does make judgements. It doesnt count home equity or 401K as available assets. To me, what this is saying, is we are not demanding parents move to pay for college. To me, that would be consistent with cola adjustments, which I do not see as that difficult. The federal govt maintains cola levels for various programs. They can be applied based on zip code of parents. Progarammed in. Why would that be so difficult.</p>

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<p>the problem is that when what hurts one group, benefits another, controversy results.</p>

<p>[2009</a> General Schedule (GS) Locality Pay Tables](<a href=“http://www.opm.gov/flsa/oca/09tables/indexGS.asp]2009”>http://www.opm.gov/flsa/oca/09tables/indexGS.asp)</p>

<p>That said, Federal employees have locality pay tables for their salary (at least on the GS scale that I am paid on). I would say that using already established formulas and applying that to the same places that the Fed does when generating salary tables would seem like a good idea for accessing the earned income portion of the FAFSA.</p>

<p>Possibly another adjustment (based on what a State school costs in any given state) could be made for families that live in remote areas where commuting to college is not an option.</p>

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<p>Sue – I agree with you. Some low cost areas do have local educational options, many remote areas do not.</p>

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<p>I meant to say “assessing”, not “accessing” in my post above. Too late to edit and looking at it wrong bothers me!</p>