State commission wants to know how college students are feeling reduced federal aid
by Paige Rentz
prentz@annistonstar.com
Oct 07, 2012 | 6046 views |  0 comments | 12 12 recommendations | email to a friend | print
A student walks near Bibb Graves Hall at Jacksonville State University. (Anniston Star file photo)
A student walks near Bibb Graves Hall at Jacksonville State University. (Anniston Star file photo)
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Changes to federal eligibility rules for Pell Grants have some students returning to college looking for new ways to pay for classes, and one state commission wants to know just how far-reaching the impact on Alabama students will be.

The Alabama Commission on Higher Education has commissioned the University of Alabama Education Policy Center a study on the topic November.

“We need to get that information out as quickly as possible,” said ACHE Executive Director Gregory Fitch. With rising costs of college, he added, families, institutions and government bodies need to be able to plan for the effects of the cut.

Pell Grant awards, which are designed to support low-income students, are calculated by a formula that considers family size and income to determine the expected family contribution to pay for college. This summer, the income threshold for families to receive an automatic zero contribution was reduced from $32,000 to $23,000.

“Because they tweaked the formula, family size and income could stay the same, but the student could get less Pell Grant money,” said Ben Baker, director of student financial services at the University of North Alabama. The change also eliminated awards to some students who qualified for the minimum $555 award and those taking college classes who have not graduated from high school or obtained a GED.

Students were previously eligible to receive grant awards for the equivalent of up to 18 full-time semesters. As of July, that number dropped to 12 semesters, even for students who are already receiving Pell Grants.

Fitch said commission staff were already hearing from families about the change. “Phone calls started coming in when people started realizing this was retroactive,” he said.

"One of the most difficult things about that provision is that it didn’t include the grandfathering clause," Megan McClean, director of policy and federal realtions for the National Association of Student Financial Aid Administrators, said of the reduction in lifetime eligibility. Because the changes went through the budget process, which is focused more on numbers rather than policy, she said they happened quickly, and students and institutions don’t have as much time to prepare for them.

“I think for those students who are close or relatively close to the end,” she said, “I think it could raise real concern over whether those students will ultimately complete. It’s likely that if they are a Pell recipient they probably don’t have a lot of spare change to devote to college.”

And though most institutions would like to make up for lost eligibility by providing assistance to students, she added, many just wouldn't have had the time to make budget adjustments of that size.

Alabama by the numbers

Pell Grant recipients make up a significant portion of students at public universities in Alabama, ranging from nearly 62 percent of the student enrollment at Alabama State University to 14 percent of Auburn University students in the 2010-11 academic year, the most recent data available. Jacksonville State University ranked fourth among Alabama universities, with 35 percent of its students receiving Pell funds.

This year, Jacksonville State has 3,553 students — nearly 39 percent of its total student enrollment — receiving more than $7.8 million in Pell Grants, according to Vickie Adams, director of student financial services. Adams had no figures how for many students are affected by the change but said she’s spoken to six or seven students who have had awards reduced or eliminated.

At the University of Montevallo, the changes have affected awards for 43 students, 20 of whom are no longer eligible for Pell funds, said media and community relations manager Diane Kennedy-Jackson. The university has 1,232 students receiving $5.4 million in Pell grants this year.

According to data from the Southern Regional Education Board, the federal government awarded slightly less than $34.5 billion to students in the 50 states and Washington D.C. in 2010-11. Of that total, $674.2 million went to students at Alabama colleges and universities. Students at public institutions received the bulk of this funding — $21.84 billion nationwide and nearly $480 million in Alabama.

According to data from the U.S. Department of Education and the state’s Executive Budget Office, Pell Grant awards that year accounted for 22.7 percent of the University of West Alabama’s revenues, the highest in the state. The University of Alabama at Birmingham had the smallest ratio at 1.8 percent, and Jacksonville State hit the median with $17.6 million in awards accounting for 9.5 percent of its revenue.

When student loan disbursements are pulled from the revenues as in JSU’s audited financial statements, Pell awards make up 14 percent of its revenues.

Dealing with the impacts

UNA’s Baker noted that these figures for the 2010-11 academic year should represent peak awards because the former Pell Grant rules allowed for students to receive 150 percent of their Pell award in one year. The idea, he said, was to get students to accelerate their academic work and get moving toward a degree. Students could enroll full-time over the summer in 2010 and 2011, during which they would be eligible for Pell money.

When the eligibility changed this summer, students who had taken advantage of the change began seeing those added summer awards counting against them, Baker said.

JSU’s Adams said she’s spoken to students who are now about to reach their lifetime limit of Pell benefits as well as their aggregate limit of federal student loans. Many students in that situation, she said, don’t believe they will qualify for private loans because they are credit-based. So she and her colleagues are trying to counsel students on how best to stretch out the resources they have in order to graduate.

“Your ultimate goal,” she said, “is to get your students graduated, get them out and working so they can begin to repay their debt.”

While universities are seeing small numbers of students who have lost eligibility this year, Baker said he thinks the worst of the impact is yet to come — “when students who are at the 400 or 500 percent and they’re still a junior and they’ve got a ways to go.” While he called the effects potentially devastating for certain students, Baker said this change simply illustrates a characteristic of the Pell Grant system, whose benefits are not set in stone.

“Just because you’re a freshman or sophomore today getting some Pell Grant money,” he said, “you’re not guaranteed you’re going to get that two or three years from now.”

But McClean said for students beginning college under the new guidelines, the change might not be so bad. "You could educate new students about the regulations," she said. "It may have the impact of encouraging students to complete."

Staff writer Paige Rentz: 256-235-3564. On Twitter @PRentz_Star.

Alabama Pell Grant awards, 2010-11

School, Recipients, Award amount

  • Alabama A&M University, 3,524, $16,647,538

  • Alabama State University, 4,094, $19,667,889

  • Athens State University, 1,594, $6,574,954

  • Auburn University, 3,762, $16,170,834

  • Auburn University-Montgomery, 2,202, $8,679,743

  • Jacksonville State University, 4,031, $17,613,048

  • Troy University, 12,121, $45,343,084

  • University of Alabama, 5,904, $24,818,325

  • University of Alabama at Birmingham, 4,097, $18,029,994

  • University of Alabama in Huntsville, 2,048, $8,561,260

  • University of Montevallo, 1,059, $4,807,937

  • University of North Alabama, 2,402, $10,332,977

  • University of South Alabama, 4,520, $18,546,725

  • University of West Alabama, 1,369, $6,457,433

Data from the U.S. Department of Education’s Office of Postsecondary Education.

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