With bailouts, economic stimulus packages, and a number of other pieces of emergency legislation being passed to prop up seemingly every aspect of the economy this year, a group of organizations connected to student financial aid are asking for additional support for college students. In a letter to Congress, thirteen higher education advocacy groups, including the Project on Student Debt and the National Association of Student Financial Aid Administrators, asked that the next economic stimulus legislation include expansions to financial aid, namely Federal Pell Grants and Federal Work-Study.
While maximum Pell Grant awards have gone up slightly in recent years and legislation such as the Ensuring Continued Access to Student Loans Act has helped students continue paying their bills, these thirteen advocacy groups feel that more still needs to be done. Family 529 plans and other savings, as well as college endowments, have taken enormous hits, putting tuition costs potentially further out of reach of many. Meanwhile, private loans have become harder for students with poor credit or no cosigner to obtain, further jeopardizing some students' ability to continue attending college. Advocacy groups hope that stimulus legislation can help alleviate these college financing problems.
The letter called for four major changes. Two involve contributing more to existing federal aid programs, a third suggests making minor adjustments and clarifications, and a fourth involves establishing an emergency fund for students who have been hit hardest by the recession. Under the proposed plan, Congress would increase the maximum Pell Grant amount to $7,000 per year (it's currently $4731) and fully fund the program. Funding for campus-based work-study programs would also increase by 25%. The group also would like to see PLUS loans become easier for families to learn about and obtain. Finally, the group suggests that an emergency student loan pool be created for students who still are unable to meet their financial need through help from their schools, college scholarships, and federal student financial aid. This pool would only be available at institutions that show a strong commitment to helping students pay for school.
While there's no guarantee Congress will incorporate any of these suggestions, higher education groups are hopeful.