While 1.3 million students across the nation will suffer cutbacks in their Pell Grants, Yale officials said their students will not experience changes in their financial aid packages.
After the first update in federal tax tables in over a decade, the amount of money families can deduct when applying for financial aid for state and local tax payments decreased in 21 states, resulting in decreased education grants in those states. An additional 89,000 students will completely lose their Pell Grants next year because of recent federal changes in the way families’ eligibility for financial aid is calculated, according to an analysis conducted by the American Council on Education.
In keeping with University financial aid policy to compensate for decreases in grants, students affected by the Pell Grant loss will not face added financial burdens, Yale Financial Aid Director Myra Smith said.
“For Yale students with financial aid, there is no effect,” Smith said. “The aggregate does not matter to the students at Yale because we’re going to meet their need no matter what happens to their Pell Grant.”
The change, which is one of the largest modifications in the past decade according to financial aid experts, will have a larger impact on other students across the nation who receive Pell Grants.
“This is one of the biggest reductions since the 1992 authorization of the Higher Education Act,” Brian Fitzgerald, director of the Advisory Committee on Student Financial Assistance, said. “There hasn’t been a change since then that has affected as many students and made 80,000 to 90,000 students ineligible.”
With this change, students’ eligibility for all other Title IV aid programs such as the Federal Perkins loan and federal work study will also decrease, because the same formula is used to determine eligibility for all types of federal aid. Fitzgerald said he was concerned this change would increase the gap between students’ eligibility for need and the amount of aid they receive, a gap he estimated to be $4,000.
But Alexa Marrero, the press secretary for the Republican majority on the Congressional Education and Workforce Committee, said Pell Grant funding will increase overall by $458 million to a total of $12.5 billion, and the number of students receiving Pell Grants will increase by about 25,000 students, with more students applying for Pell Grants.
Susan Aspey, the press secretary for the U.S. Department of Education, also said in a written statement that the number of students receiving Pell Grants next year would increase, and that the update in tax tables was necessary because of laws mandating the update.
“We’re required by law to do this and we can’t pick and choose which parts of the law to follow,” Aspy said.
But given that the tax tables, which are supposed to be updated annually, have only been updated once since 1992, the DOE does “pick and choose,” when to update the tables, said Larry Zaglaniczny, the director for congressional relations of the National Association of Student Financial Aid Administrators.
The Advisory Committee on Student Financial Assistance, which was created by Congress to advise its members on financial aid, recommended in July that Congress entirely eliminate the “unfair” tax tables, Fitzgerald said. Zaglaniczny said the tables are “seriously flawed and inaccurate” because they only take into account two income bands, and they use IRS data based solely on tax filers who itemize.
“Congress needs to spend some time digging into tax tables and refine the methodology of defining tax tables so that it accurately reflects what the elements of need analysis should be,” Zaglaniczny said.
Zaglaniczny said the change, which was made Dec. 23, may also violate the Higher Education Act’s “Master Calendar” provisions, which stipulate that updates of need analysis elements must be done by June 1.
Josh Eidelson ’06, a member of the Undergraduate Organizing Committee, said he hoped these “outrageous” federal changes would spur Yale to make the alterations in its financial aid policy that were necessary before the Pell Grant decrease.
“I would hope that as the federal government abrogates its responsibility to low income students, Yale will take the opportunity to step up and meet its own responsibility to better realize equal opportunity at this university,” Eidelson said. “Yale has a ways to go still in making equality of opportunity a reality.”