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Month: January 2016

Obama administration announces plan to expand Pell Grant program

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The Obama administration has introduced a plan to bring back year-round Pell Grants and to create a $300 bonus for Pell recipients taking at least 15 credits a semester. Both elements of the plan are designed to incentivize students to graduate faster and accrue less debt in school. The plan would cost $2 billion over the next year, according to the Department of Education.

The year-round Pell Grant program was initially put in place by President Bush in 2008 but was cut in 2011 as a budget-saving measure. While the effort to reinstate the program will likely face significant Congressional opposition, there is some bipartisan support. Senator Lamar Alexander (R-LA), Chair of the Senate education committee, and Democratic Senator Michael Bennet of Colorado are cosponsoring legislation to reintroduce year-round Pell Grants. “We have long supported providing students a more flexible Pell Grant program and hope this is one of many areas Congress and the administration can work together to strengthen higher education,” a Republican education committee spokesman was quoted as saying in Inside Higher Ed. Even with this bipartisan support, however, the administration faces a difficult task in getting the legislation through a very budget-conscious Congress.

The $300 bonus, dubbed “15 to finish” by education non-profits, is also somewhat controversial, though the division is between a different set of stakeholders than the Pell Grant expansion. Many college completion non-profits support 15 to finish, saying that encouraging 15 credit semesters is an important tool in incentivizing Pell recipients to graduate on time. The plan has drawn criticism, however, from community college leaders and adult student advocates, who contend that 15 credits is too many for students who are busy working or who have come into higher education unprepared for college-level work.

See the UW Federal Relations department post for further information on the Pell Grant proposal.

New York expands student loan forgiveness program to include lower earners

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New York state has recently instituted the “Get on Your Feet” loan forgiveness program in an effort to keep young college graduates living and working in the state. The program, originally introduced as a part of Governor Cuomo’s 2015 Opportunity Agenda, is designed to help struggling recent graduates in the state pay back their student loan debt. Get on Your Feet is the most recent extension of NY state’s financial aid to its college graduates, which includes loan forgiveness for several public service professions and need-based state grant programs with awards of up to $5,165.

There are a number of eligibility stipulations for the program, including that the graduate be enrolled in the federal Income-Based Repayment plan or the Pay As You Earn plan, that they are making less than $50,000 per year, that they work and have graduated in-state, and that they have received their degree during or after the 2014-15 academic year. Get on Your Feet also only applies to federal loans; private loans are ineligible for relief through the program.

The plan, which has been covered by CNN Money, the Huffington Post, Forbes, and the Washington Post, is not without controversy – recent graduates who do not qualify for Get on Your Feet are upset because they feel they are paying for others’ college costs while reaping none of the benefits of the loan forgiveness. The program is financed through the state’s General Fund, for which the primary sources of revenue are in-state taxes.

The Washington Post article lists some of the other states that have forms of student loan forgiveness. Forty-five states and the District of Columbia offer some form of loan forgiveness for its residents, according to the article, but New York is the only state that specifically targets lower-income graduates. Most programs in other states are concentrated in public-service industries; health, social work, teaching, and public law.

Washington state provides health-care professionals with loan forgiveness of up to $70,000 over two years (details on the Washington State Achievement Council website) and also gives financial assistance in the form of the State Need Grant (SNG), which distributes financial aid awards up to the price of in-state undergraduate tuition—$10,344 at UW—for Washington residents whose families meet the minimum income requirements.

Unfortunately, more than 33,500 students across Washington, 3,500 of whom attend the UW, are eligible to benefit from the SNG but do not because the program has not received sufficient funding from the state.