Higher ed experts applaud Obama's student aid proposals


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Higher-education advocates are applauding President Obama's plan to revamp federal student aid.

In a budget proposal released Monday, the president calls for increasing the Pell Grant cap, doubling the number of work-study positions available, and making other tweaks to federal student-loan programs.


Julie Morgan — a policy analyst with the Postsecondary Education Program at the Center for American Progress — said the administration's focused efforts toward supporting middle-income students is encouraging.

"All of these little things that we see in the budget are in the context of the president really capping [his proposal] to what's really bothering families and what we can do to solve [their problems]," she said.

Under Obama's plan, the federal Pell Grant limit would jump from $5,550 to $5,635, and 110,000 work-study jobs would be added over five years.

Mark Warner, the director of UI Student Financial Aid, said the proposal would help the 20 percent of university students who receive Pell Grant funding.

He said the UI had roughly 4,300 students getting $15 million in Pell Grant funding for the 2010-11 academic year.

Warner said Obama's dedication to higher education "is a very positive thing" for students.

"It's extremely pleasing to see in the budget that there is a strong support for Pell Grant [funding]," he said.

And just over 1,000 UI students earned roughly $2.2 million in work-study funds during the 2010-2011 academic year.

Warner said work-study programs are extremely beneficial for students and the president's acknowledgment of the programs is a good sign.

"It provides valuable resources for that student," he said. "For every dollar the student can use by work-study theoretically means that's one fewer dollar that student has to borrow."

The president's proposal also seeks to cap the federal Stafford Loan interest rate at 3.4 percent for one more year. Interest rates are set to jump to 6.8 percent in July. Funding for Perkins Loans would also increase from $1 billion to $8.5 billion.

"I don't think that there is really a likelihood that Congress is going to let interest rates increase to 6.8 percent, because that's really high," Morgan said. "The whole purpose of the federal student-loan program is that students have an alternative to high interest private loans."

But a representative from Sen. Chuck Grassley's, R-Iowa, office said that although increased Pell Grant funding is necessary, there is a lack of funds to support it.

"These actions mean we should have sufficient funding to maintain the maximum Pell Grant for the coming budget year as well, but it is likely there will be a Pell Grant shortfall again the following year requiring more difficult decisions," Grassley's office wrote in an email to The Daily Iowan.

Stephen Steigleder — another policy analyst with the Postsecondary Education Program at American Progress — said economically, higher-education programs are long-term investments in America's middle class.

"Private sector companies invest in capital equipment because it boosts productivity over the long run," he wrote in an email. "Similarly, the federal government should invest in human capital (i.e., our future workforce) because it boosts productivity and economic growth over the long run."

Despite Grassley's claim that money is tight, Steigleder said, the country must set budget priorities.

"I think helping low-income students attend college is more important than allowing hedge-fund managers to pay taxes at 15 percent," Steigleder said.

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