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President Barack Obama's budget plan would cut $100 billion from Pell Grants and other higher education programs over a decade through belt-tightening and use the savings to keep the maximum college financial aid award at $5,550, an administration official said.
<p>The proposal includes ending year round Pell grants and the Stafford loan subsidy for grad students. I'm sure there's "little evidence that students earn their degrees any faster" with a second Pell grant...I think that program only began a year ago!</p>
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The administration also has expanded other programs that help students reduce loan payments and ultimately forgive debt they can no longer afford to repay.
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<p>The gov giveth and then taketh away...I really have to wonder how long the Public Service Loan Forgiveness program and the like will actually last. I hope they're not selling these kids down the river...</p>
<p>This is dissapointing. The year round pell is so new, I don’t see how they can judge whether it has been effective or not! It has only been around for a year for goodness sake. I wonder if that means their undergrad subsidized loans will not continue to be subsidized while they are in grad school. That would suck, especially as I am pretty sure all the pages of stuff they sign when doing the counseling and MPN say the loans will be subsidized. </p>
<p>Between this latest news and the canceling of the ACG and SMART grant programs FA is going the wrong way. I’m glad my family are toward the end of our collective undergrad college careers. I have one thinking of Grad school though.</p>
<p>I’m disappointed in Obama. I see to recall promises for helping out college students.</p>
<p>They’re also ending subsidies for private loans to help more with government loans, which seems a wise move. Also, it seems like they have planned for the future, unless another administration changes things (which inevitably happens sometime).</p>
<p>I agree SCM…the second Pell grant program seems to have been much more popular (read, overbudget) than they anticipated. I’m not surprised, with all the adults returning to school due to layoffs - why wouldn’t they want to go year round?! I’m sure they cannot end subsidies on existing loans…that would violate the loan provisions. I’m not happy about losing it on the $8500/year future grad loans either…if they continue to charge 7.9% that will be an extra $700 or so in interest to pay every year to avoid having it capitalized!</p>
<p>I am one of those adults back in school (never expected to be, but between my husbands early retirement and high medical costs - premiums and our share of what is not covered - we have seen our comfortable retirement savings dwindle drastically). I was hoping to use the summer Pells to get out a year quicker (though having just ■■■■■■■ through the summer class offerings in my major, accounting, the 12 hours I was planning on may not be quite as easy to find as I had hoped).</p>
<p>Do you think the summer Pell grants could end as soon as this summer? That would be rather dramatic! I was hoping my daughter could apply for a summer Pell to use this summer. This will be the summer between her junior and senior years and we were both hoping she could stay in school and complete a couple classes in the summer term.</p>
<p>I received a subsidized Stafford myself this year for my post-bacc accounting program, and I’m thankful for it. I, at least, will be okay if there’s not another one to follow as I’m close to being done… but I feel a lot sympathy for other returning students who are just trying to develop some professional skills in this new, tough, and changing economy.</p>
<p>No, it would not take effect until October 1st. But, for those schools that have summer headers, I think that students who are using a Pell grant this summer could potentially see their grant affected for Spring 2012 since, technically, that’s when they’re actually using the second Pell. I’m hoping kelsmom will have share her thoughts on this…</p>
<p>Hopefully this summer is part of last years budget. My daughter is hoping to get an internship this summer. If she doesn’t then I’m hoping summer Pell is still around this summer. She is doing an environmental certificate to go with her major and one of the limited number of core class choices is offered in the fall at the same time as one of her required major classes (neither are offered in the Spring and the major class will take precedence of course). The class is however offered in the summer so if she does not get an internship then taking the class in the summer will be on the cards so she can still get the certificate - it would be nice to have the Pell to pay for part of it.</p>
<p>I just looked up my daughter’s college, and they must be a summer “tailer” too. The FAFSA application that must be submitted for this summer’s aid is the 2010-11 FAFSA, which of course she already has in place for this year. There is an additional app, of course, but not another FAFSA required.</p>
<p>Summer rearer? Idk, anyway D’s school is a summer header and she’s required to do two more summers…her program mandates it, the classes are not even offered in a regular term, and she’d be kicked out of her major if she didn’t stay. She took 9 credits last summer too, but that was to make sure all her pre-reqs were done by the cutoff date. No amount of financial aid could help her get through quicker, but we’re fighting just to make sure she can graduate on time! It’s tougher to stay on track at a lot of the public schools now that state aid has been cut so drastically and so many more students are enrolling because they can no longer afford the privates. Our state just cut the small amount of grant aid for grad students and raised grad tuition rates (one year before she’s considered a grad student, of course). Time to update the spreadsheet again…</p>
<p>I have not heard any buzz about year round Pell going away this year (this is actually the first I have heard of it at all). The software companies just spent a fortune updating for the ridiculous rules, and financial aid offices have spent countless hours trying to figure out how to implement them. I don’t see it going away that quickly. I personally have spent hours calculating assumed transfer credits for our students who had Pell from 10-11 last summer & Pell from fall before beginning classes at our school. It’s actually very costly from an administrative perspective to administer year round Pell. Of course, the solution would be to make the rules less convoluted. But I doubt that will happen. :)</p>
<p>@swimcatsmom,
"I’m disappointed in Obama. I see to recall promises for helping out college students. "</p>
<p>There is no way this can be blamed on the President. Last Nov. we had an election, the people decided that tax cuts for oligarchs and plutocrats was more important than investing in the future. Now the cuts must be made; we have to live with it. Such is a democracy. </p>
<p>I can’t wait to vote for the first time next year!</p>
<p>There is no way this can be blamed on the President</p>
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<p>The article says “Obama to seek” … but this is not the place for political rhetoric. It doesn’t matter who caused what. What matters is what will or will not happen. We could debate for hours on why our economy s<strong><em>s … in the end, it still s</em></strong>s.</p>
<p>From what I read – there isn’t much available on this yet – it sounds like the $5500 max Pell would remain. The change would be the “summer” Pell and sub loans for grad students. I think that’s all very unfortunate, but really it sounds like the Pell would just go back to the way it was. Losing the sub loans for grad students is a hit, but not a huge one given the deficit problem and the big picture.</p>
<p>It is galling that the wealthy got all their fat tax breaks reinstated… kind of amazing really when you hear all the hue and cry about CUT CUT CUT from their friends in high places.</p>
<p>^I agree that it’s unlikely that students will not attend grad school over a loss of interest subsidy on an $8500/year loan but I think the year round Pell was a very good idea, particularly for displaced workers whom we need to get back into the workforce asap! I feel like it’s a slap in the face to those students who made that commitment to retraining in the last year and relied on the availablity of summer grant aid. Student loan limits aren’t going up and most colleges won’t give any aid for summer, so where will that money come from? If we expect them to just take the summer off and work, where are the jobs for them to do so coming from? From what I’ve seen, many of them already work part-time at whatever job they can find and raise families while they’re in school! I’m also concerned that steep cuts are proposed for other programs that impact low income families directly, such as the LIHEAP subsidy which is paid directly to the energy providers. Do we really have to force the elderly and families with children (including those returning adult students) to decide whether to heat or eat? This is not a good direction to be heading in, imho, especially as energy costs continue to rise.</p>
<p>Otoh, there’s no arguing the fact that nearly half of all tax filers pay no federal income tax at all and there are big loopholes in the FAFSA formula which allows for Pell grants where there is truly no need for them, as we’ve seen on some threads recently. And the proliferation of tax credits has reached the point where people who are actually paying taxes almost feel like suckers. That just has to end…if some of these tax credits, particularly the refundable programs, were cut out or capped in the budget perhaps we’d be able to preserve and continue to develop programs that truly reflect what we value as a nation.</p>
<p>This is an interesting little chart showing the cost, in terms of lost revenue, of some of the current tax breaks:</p>
<p>It was interesting that Jacob Lew (see CNN’s video in sidebar) was talking about the budget-cutting process being the similar to what families go through…but they seem to have left out the entire idea of increasing revenue! It makes sense to me that if all but the very lowest earners (ie. at/below poverty level) were paying something, or at least not receiving thousands in refundable tax credits, that we all might be better off.</p>
<p>Actually this can be blamed on Obama. He did not have enough coat tails or influence to KEEP the house and senate. He had the entire Congress.</p>
<p>Also troubling is the elimination of Americorps which will impact low income students as well. Many do work study through Americorps and if it’s gone then it’s a double whammy.</p>
<p>Is the concern that some students are taking lighter loads during the regular school year knowing that they can “make up for it” in the summer and pay for it with Pell? </p>
<p>For instance, if full tuition at a state school is the same cost whether you take 12 credits or 18 credits, some might take 12 credits instead of 15, and then “make up” in the summer using more Pell money. That just is an unnecessary cost. </p>
<p>If anything, maybe this should be limited to one summer Pell per kid.</p>
<p>Frankly, if this is their big concern…why aren’t they more concerned that a person can accept full Pell for like 18 semesters (or something like that). At most, a person should only be able to accept a “full time” Pell for no more than 10 or 12 semesters…that’s 5-6 years. If the person is only going part-time and accepting “part-time” Pell, then it could be for more semesters…like 14-16. </p>
<p>And, why don’t they change FAFSA’s rules about ignoring assets (that aren’t home/farm) if your income is under a certain amount? No one should get full Pell if their (non-home/farm) assets are over $200k or so. One family on CC gets full Pell and their stocks are worth over $750k (or was it one million?). Just ridiculous. Even more ridiculous was that the kids were getting “free lunch/breakfast” because that only looks at income as well.</p>