Bill could bring major financial aid cuts

By Bessie King

The U.S. House of Representatives approved the federal spending bill two weeks ago, and on top of war payments, health care and Hurricane Katrina relief, students’ financial aid was also tucked into a little-noticed corner of the multi-trillion dollar bill.

If the Senate passes the bill as it currently stands, that little corner could eliminate funding for major financial aid programs like the Perkins Loan, the Federal Work Study program and Supplemental Educational Opportunity Grants (SEOG).

Since a bill proposed by President George W. Bush that would have slashed about $12 billion of government-supported student loans programs was cut from the budget, the legislation under consideration could either maintain federal financial aid grants at their current levels or take substantial cuts from the funding.

Those cuts would force many students into obtaining more loans with interest rates as high as 7 percent, according to a recent article in the Chronicle of Higher Education.

“At this moment, the university doesn’t know what will happen yet because the legislative process is not complete,” said Seamus Harreys, dean of student financial services. “The university is, however, advocating through channels we have access to, through state representatives, senators and national associations.”

The proposal, approved by the House, reauthorizes the Higher Education Act, a law that funds and manages all federal student aid programs.

Even though the proposal increases the maximum Pell Grant from $5,800 to $6,000 and makes it available to students year-round rather than just once every nine months, amendments had to be made by opponents of the legislation.

Some of those amendments included the elimination of a proposed change in the formula used to allocate funds to the three major financial aid programs, work-study, Perkins Loans and SEOG.

The change suggested opening the programs to new institutions instead of maintaining them among universities that have participated in them for years. If this change in the formula had occurred, Northeastern would have lost $3.8 million in funds, according to a statement by Congressman John F. Tierney (D-Salem) who has been representing northeast schools and students on the issue. Also, there is no increase in student aid funding or lower costs in student loan interest rates. However, the amendment was not passed and the formula will remain the same.

Supporters argue that the legislation maintains the Perkins Loan in its current form despite Bush’s attempt to axe it as part of his $12 billion cut. The legislation makes the grant more accessible for low-income students, whose families qualify for welfare benefits, to apply for the grant.

The legislation is now on its way to the Senate, where it could endure more amendments.

Harreys said even though the senate has yet to approve the budget, he feels more positive than he did three months ago. With increasing war costs, Katrina recovery funds and the skyrocketing oil prices, he said he had worried the proposed legislation would be worse.

“It is still not a positive situation because of the $12 billion cut that will occur over the next five years beginning July 1, and which will cause many students to borrow more money at higher interest rates, but we are working to keep what we have for our students,” Harreys said.

Harreys said he recommends student advocacy, pointing out that it is different to say “a student needs funding” as opposed to “I need funding.”

Last year, the Student Government Association (SGA) organized a letter and phone call campaign to senators and representatives asking them to limit the changes that were going to be made to financial aid. This year, the organization is preparing for another campaign.

“The flooding of calls got a lot of responses,” said SGA President Ashley Adams. “I urge next year’s e-board and students to continue advocating because the campaigns are easy to mobilize and prove to be successful.”

The senate’s decision is expected within the coming weeks.

In the meantime, the Office of Financial Aid has begun informing students of their options for loan consolidation and increasing education on the issue. The office is also encouraging students to contact their representatives to express discontent against other possible cuts in education funding and partake in any university-wide phone-a-thons or campaigns.

“You can’t complain about something unless you get involved in it, so express your interests,” Harreys said. “It will not be time to rest until we see the final bill that comes out, and the university won’t stop fighting.”

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