Presidential candidates hit on financial aid
In a debate packed with topics ranging from the Libya embassy attack to immigration to the deficit, the presidential candidates managed to bring up financial aid for higher education as well. President Barack Obama’s reference to Pell Grant increases at the Oct. 16 debate with Governor Mitt Romney was a sign financial aid policy is important to voters — and candidates — this election.
It remains unclear how the outcome of the presidential election will impact financial aid for college students around the nation. Obama’s campaign speaks about plans to continue to use savings to step up support for Pell Grants and points to sizable increases already made in Pell Grant funding, along with the end of bank-based lending. In the recent debate, Obama cited that change as a source of savings that allowed for increases in program funding.
The Romney campaign instead promises to bring banks into the student-loan market, while at the same time Romney said on Oct. 16 that he expects to continue to increase Pell Grant program funding. That was a new commitment for Romney, who had previously spoken about limiting the program’s growth.
“Regardless of the outcome of the November elections, federal student aid will remain one of the nation’s top priorities,” noted David Warren, president, National Association of Independent Colleges and Universities, which represents many of Minnesota’s Private Colleges in Washington, D.C. “Congress and the White House, whether they are controlled by Republicans or Democrats, will need to work to keep student aid focused on students, and make further investments to meet the growing need of low- and middle-income students and families looking to improve their lives.”
A test for national political leaders on just that front will be coming sooner than many may think — well before the inauguration of the next president. Significant cuts to several federal financial aid programs will hit Jan. 3, unless Congress can agree on a plan to cut the deficit by then. That’s the result of the mandatory cuts, known as sequestration, that were put in place to try to force an agreement on addressing the deficit. But with no sign of an agreement, the threat of these cuts may become all too real.
While the Pell Grant program would be protected during this fiscal year, other federal financial aid programs would be cut about 8%, according to a report released in mid-September by the White House’s Office of Management and Budget. These programs include federal work-study and the Supplemental Educational Opportunity Grant. (Cuts would be made to higher education access programs, including TRiO and GEAR UP programs.) The cuts would go into effect July 1, 2013. The American Opportunity Tax Credit, which provides a credit of up to $2,500 per year, is also set to expire in December and has not yet been extended.
Some worthwhile caution was offered by the editorial board at the Washington Post. Pell Grant funding faces its own funding cliff in future years that Obama hasn’t addressed, noted an Oct. 20 editorial, while Romney’s position “is even more suspect.” The editorial concluded that “fine promises on Pell grants without the substance to back them up neither serve Pell-dependent students nor advance smart budgeting, in which priorities complete fairly and tradeoffs aren’t hidden."
A summary of the presidential candidates’ positions on financial aid and other higher ed areas has been prepared by the Chronicle of Higher Education.