In his budget for 1984, the president deplores the federal government's "growing and inappropriate influence on parental, state and local education decision-making," and proposes a "major legislative initiative" to "restore emphasis on family and student responsibility in meeting postsecondary education costs . . . "
Translated, that means another reduction in federal aid for many students attending college, junior college and technical schools. The budget suggests a 4 percent cut next year in spending on higher education. Part of the savings will come from lower interest rates, which reduce the government subsidies paid on student loans. But there will also be direct cuts in grants and loans.
From 1982 through 1984, planned spending will drop 16 percent. Over the past two years alone the cost of the average four-year college education has risen by 23 to 29 percent, according to the college board.
Congress will inevitably make some changes in the education budget. But here are the president's key proposals on direct student grants: (1) Every student will have to pay part of his college education out of earnings, loans or parental contributions. It will no longer be possible to pay for a low-cost school entirely with a combination of federal grants.
At present, a needy student starts with federal grants when assembling his package of student aid.
Under the proposed system, the government will assume that every student, regardless of income, can finance the first 40 percent of the cost of her education, including tuition, room, board, books and fees. This money may come from a variety of sources, including student savings, contributions from parents, student loans, college loans or grants or a campus job--whatever you can scrape up.
If the school costs less than $2,000 a year the student must finance the first $800, which comes to more than 40 percent. Federal student grants then become your second layer of college aid, awarded according to income and the cost of the school you attend. For the rest of the money needed to finance your education, you'll again return to your own sources of funds, including loans and college grants.
In many cases, this change may make no difference to the total amount of aid you get. But the presumption of 40 percent self-financing will limit grants for some students at low-cost schools. The American Council on Education is studying this issue to see exactly what it's going to mean.
(2) A second proposal will definitely make a big difference to the amount of aid that many students get. How you fare depends on your income level and the grant policy of your school. Some low-income students will do better, some worse. Middle-income students will definitely get less.
You will need a little nomenclature to stay on top of this issue. Student grants began life as Basic Educational Opportunity Grants, then were renamed Pell Grants and now are to be called Self-Help Grants. Washingtonians use those names interchangeably; I'll call them self-help or student grants.
For the school terms starting July 1984, about 80 percent of the grant money would be reserved for students from families earning $12,000 or less, and only 20 percent for families above that income level. The over-$12,000 group got a larger percentage last year, but the education department isn't saying exactly how much larger.
The cut-off point for participation in the program--for a family of four with one child in an expensive school--is an income of $26,000, which would qualify you for the minimum $100 grant. As you can see, that's not the sort of thing to hang a college education on. In general, lower middle-income students will qualify for smaller grants than they got last year.
When the student-grant program first began in 1972 it was intended for low-income students. Now it's going back that way. Low-income students with insufficient student grants used to be able to turn to their colleges for a Supplemental Educational Opportunity Grant, or a State Student Incentive Grant. But under the proposal, SEOGs and the federal contribution to SSIs would be folded into a single federal grant.
The maximum federal grant, for low-income students who attend expensive schools, would rise to $3,000 a year from $1,800 today. But the new grant may or may not equal what the student was getting from his old student grant plus a SEOG and an SSI. Some low-income students will come out ahead and others, behind.