Kansas faces federal college aid cuts

Congress weighs changes to grant, loan programs

Students at Kansas colleges and universities would lose more than $2 million in financial aid under proposed changes to federal law, according to an analysis by the American Council on Education.

“Kansas would take a big hit,” said Chris Johnson, associate director of student financial aid at Kansas University.

The changes are part of the Higher Education Reauthorization Act being considered by Congress. The bill has been approved by a House committee but has yet to be heard on the House floor.

The changes would affect three federally funded programs that send money directly to colleges and universities for distribution to students:

  • Supplemental Educational Opportunity Grants.
  • Perkins loans.
  • Federal work-study.

The programs are designed to supplement Pell grants, which go to the neediest students, and provide assistance to middle-class students who miss the cutoff for Pell grants.

The KU impact

Allocations for the programs have been calculated, in part, on “base guarantees” that promise certain funding levels based on how much universities historically have distributed. Under the proposed guidelines, the base guarantees would be eliminated in favor of a “fair-share” philosophy that uses a formula including student demographics.

In general, longtime participants in the programs have higher guarantees and therefore would lose the most money.

“I personally don’t have a problem with the fair-share philosophy,” Johnson said. “It’s kind of odd they would take a base-year allocation from 25 years ago to figure your current allocation. But I do recognize if these numbers do change, there will be an impact on our students.”

At KU’s Lawrence campus, the biggest decrease, $83,000, would come from supplemental grants. The amount for Perkins loans would remain the same, and work study grants would increase by $106,000, leaving the university with a net increase of $23,000.

A small piece

Johnson, who recently completed a year as president of the Kansas Association of Student Financial Aid Administrators, said he worried the move away from supplemental grants would push more students toward loans.

“I hate to see any money go away that is gift aid,” he said. “The less students have to borrow, the better off we are in the long run. We don’t want to be a debt-ridden, college-educated society.”

But Johnson said the three programs represented a small amount of the aid KU distributes annually. For instance, KU students receive $80 million in federal guaranteed loans, compared with $3 million in Perkins loans; and $8 million in Pell grants, compared with $549,000 in supplemental grants.

The effect will be different at the KU Medical Center, which would receive $92,000 less under the proposal than it would if the programs were left untouched. All but $1,000 of the cut would come from the Perkins loans.

But Lisa Erwin, director of student financial aid at the Kansas City, Kan., campus, said other loan programs designed specifically for prospective doctors and nurses would lessen the impact at the Medical Center.

“It’s early, and there will be a considerable amount of debate on the topic,” she said.

Still not certain

Baker University in Baldwin would lose $43,000 in Perkins loan money but would increase its supplemental and work-study grants by $6,000 and $17,000, respectively. Jeanne Mott, director of financial aid, was not available for comment Thursday.

Though the American Council on Education analysis is the first look at the potential aid allocations, it may not be perfect. Some officials have criticized the data because the council assumed the base guarantees would be put in place during the 2003-2004 academic year. Instead, the changes wouldn’t be completely phased in until 2015-2016, when university tuition rates and demographics could be different.

Even some of those who are familiar with the financial aid policy say they’re trying to make sense of the new system.

“Not knowing each school’s demographics, it’s hard for me to draw many conclusions,” Johnson said. “I tried to look for some kind of pattern, but I couldn’t really find anything.”

Regents oppose it

The Kansas Board of Regents plans to lobby the Kansas congressional delegation to oppose the changes. Overall, Kansas colleges and universities would see a 14.6 percent decrease in the three programs combined. The largest hit would come in Perkins loans, which would be cut 54 percent.

“Anytime you lose money, you’re concerned,” said Kip Peterson, the regents’ director of government affairs and communications. “We haven’t studied the formula enough to understand exactly why. But anytime we lose money, it gets our attention.”

Rebecca Black, a spokeswoman for U.S. Rep. Dennis Moore, D-Kan., said Moore shared the regents’ concern about the decreasing funds.

“The bottom line is this funding allows people who wouldn’t otherwise attend college or get a post-secondary education to do so,” Black said.