Controversial Proposal to Redistribute Financial Aid

The Bush administration's new proposal for financial aid may leave many students with less aid to pay for rising tuition costs.

The proposal involves the elimination of Perkins Loans and a $100 increase every year for the next five years for Pell Grants. Currently, the maximum amount a student can receive from a Pell Grant is $4,050.

But the formula that determines who gets what will be revamped, causing about 84,000 students to no longer be eligible for the grant, according to a report released by the Congressional Research Service. Some 100,000 students will receive less money than the previous year.

The president's focus is to get more money to students in dire need of aid, but some critics do not see the benefits of giving a smaller group of students an even smaller increase.

"With tuition increasing constantly, we are all becoming students in 'dire need,' and the administration needs to keep that in mind," one student said.

Deleting the Perkins Loans puts middle class families in a more vulnerable position. The loan is awarded to students with a modest need for aid. The government is asking universities to pay back their shares of the loan in order to see through the $500 increase in Pell Grants.

"Even if those students get the $100 increase each year, what will $100 really do for them? It will barely pay for my accounting book," a Lubin student said.

The plan has yet to be approved by Congress, and thus far it is being criticized by some local politicians.

In an interview with The Daily Star of Oneonta, NY, Senator Chuck Schumer said an increase in one program does not justify the elimination of another.

Another aspect of the proposal involves reallocation of funding to all universities. The "Fair Share" plan would provide more federal funds to larger, growing universities in the west and south rather than northeastern universities, which traditionally received the greatest amount.

The current plan gives more money to older, established universities, while the administration's new plan allocates more money to universities with greater populations.