Obama proposes changes to federal student aid

MSU students had mixed reactions to the financial aid portion of President Barack Obama’s 2012 budget proposal released Monday morning, where it appeared some students would have to sacrifice in others’ stead.

The plan was a slight relief to students who receive the need-based Pell Grant, as Obama expressed his intentions of keeping the maximum yearly disbursal at $5,550.

“They’re pretty important to me,” English sophomore Melissa Anderson said of the Pell grants she receives each semester. “I don’t get a large sum of Pell Grant money … but without that, that would be a lot of money (added to) my student loans.”

Others, though, found the method of keeping the funding level stagnant to be troubling.
Graduate students who receive federal loans would be able to take out only those that accrue interest while they are taking classes. Currently, interest generates on those loans after a student graduates.

Atop that, a 2-year-old program that permitted Pell Grant disbursal during the summer semester would be stricken because Obama administration officials said they have become too costly.

About 2,800 students at MSU received Pell assistance during the summer 2010 semester, the first year the program was implemented, said Val Meyers, associate director of MSU’s Office of Financial Aid.

But maintaining funding for a need-based program for undergraduate students by disadvantaging potentially equally needy graduate students is worrisome, said Adam Lovgren, vice president for graduate welfare for MSU’s Council of Graduate Students.

“Graduate students don’t get Pell grants as it is,” said Lovgren, who said loans help with things such as raising a family. “We don’t have lots of resources available to us.”

The financial aid proposals seem to embody the spirit of Obama’s 2012 budget proposal, which takes an air of cut fat and invest accordingly.

Arne Duncan, Obama’s secretary of education, said Monday during a conference call with reporters the president believes the measures are necessary.

“These are absolutely painful cuts, but they’re the type that are absolutely necessary,” Duncan said, adding the summer Pell grants are financially “unsustainable.”

Haley Chitty, a spokesman for the National Association of Student Financial Aid Administrators, or NASFAA, said the situation is not the most desirable. It is, though, perhaps best that Obama chose to bolster the Pell Grant program, he said.

“We have to think about priorities, and when you’re talking about student aid, the goal of it is to provide access for students that can’t afford higher education,” Chitty said.

And although he said NASFAA is happy Obama chose to prioritize federal student aid, serious and imminent opposition by the Republican-led House poses a threat to the plans.

Congress has yet to enact a 2011 budget, and last week the House proposed a resolution that would slash nearly $100 billion from Obama’s proposed budget for the current fiscal year set to end in September.

Part of those cuts would hit student financial aid, particularly Pell. Some sort of funding must be locked down by March 4, when another resolution maintaining federal spending at 2010 levels expires and potentially could create a government shutdown.

Meyers said it is unclear what could happen to Pell Grant money should the Republicans’ spending cuts take effect. Until Congress hashes out a plan, she said, anything from current-semester reductions to cuts next year could occur.