Federal Student Aid Program Funding in Limbo
By Charles Pekow
Anyone wishing for immediate increases in student aid will have to wait at least a few more weeks. President Bush recently signed a continuing resolution funding the federal government through Nov. 18 at fiscal year 2005 levels. The resolution is based on the bill passed by the House of Representatives, because the Senate has not yet passed their version of the bill.
Most programs will continue at last year’s levels for the time being, but proposed increases (such as for the Fund for the Improvement of Postsecondary Education or the maximum Pell Grant) don’t take effect now. However, programs that the House of Representatives voted to terminate (such as Community Technology Centers) get no money, at least temporarily.
Two-Year Colleges Enrolled More Than 4 Million in 2004
More than 4 million Americans attended two-year schools a year ago. The Census Bureau’s figures for October 2004 show that an estimated 2.6 million attended full-time and 1.74 million part-time. The overwhelming majority (2.3 million full-time and 1.6 million part-time) attended public colleges.
The figures include an estimated 788,000 who had already completed two years of college. Of those in their first and second years, 1.2 million were under 20 years old; 1.05 million were between ages 20 and 24; 697,000 were between 25 and 34 and 585,000 were 35 and older.
New Relief Bill Waives “50 Percent” Rule
Among the many bills still pending in Congress to help hurricane victims lies one with a catch, according to the American Federation of Teachers. Sen. Michael Enzi, R-Wyo., chairman of the Committee on Health, Education, Labor and Pensions, teamed up with ranking member Sen. Edward M. Kennedy, D-Mass., and Sen. Jeff Bingaman, D-N.M., to offer a Hurricane Katrina relief bill that would allow the Department of Education to waive requirements in the hurricane zone regarding repayment of aid not used because of school interruption, allowing extra time to repay loans and increasing loan limits.
The bill would also allow the department to transfer Work-Study funds from one school to another and waive the matching requirement this academic year for students who transfer because of the storm.
But the bill also includes a measure to encourage distance learning by waiving the 50 percent rule — which bars a school from offering federal financial aid if more than half of its classes are offered via distance education — for any institute of higher education in the country. Since students could attend from anywhere, the waiver is not limited to students and schools in the hurricane zone. And unlike the other student aid waivers, this provision has no time limit. “If you are going to talk about doing that, we should limit that to those affected and sunset it,” says Gabriella Gomez, AFT’s chief lobbyist on higher education issues.
Two-Year College Students Defaulting Less
Loan default rates among two-year college students are dropping, but they remain higher than those for other college students. The Department of Education reported that the overall default rate on Direct Loans and Federal Family Education Loans fell from 5.2 percent in 2002 to 4.5 percent in 2003. But for public community colleges, 5.8 percent of students defaulted in fiscal year 2003; however, that default rate slid in recent years from 7.2 percent in 2001 and 6.7 percent in 2002.
