Cafc presentation 9 29-11 ticas


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Cafc presentation 9 29-11 ticas

  1. 1. Federal Aid Programs: What they Mean and Where they StandCollege Access Foundation ConveningLos AngelesSeptember 28-29, 2011Debbie
  2. 2. Federal Grants and Loans • Pell Grants and federal loans are the two largest sources of undergraduate financial aid • Both are widely available to students with minimal academic requirements and few college or program restrictions • The federal Pell Grant is the foundation of students’ financial aid packages 2Aid amounts from College Board, Trends in Student Aid 2010
  3. 3. Support the Federal Grant The Federal Pell Pell Grant • More than 9 million Americans – and one million Californians – depend on Pell Grants to go to and complete college. – Most Pell recipients have family incomes of $40,000 or less. – Nearly half of African-American undergraduates and 40% of Latino undergraduates rely on Pell Grants to attend college. • The maximum Pell Grant is currently $5,550, though students’ grant size depends on their need and attendance status.U.S. Department of Education, “Fiscal Year 2012 Budget Request: Student Financial Assistance,” p-13, projection of Pell Grantrecipients 2011. Calculations by TICAS on data from the U.S. Department of Education, Office of Postsecondary Education, “PellEnd-of-Year-Report,” 2009-10, Table 71. 3
  4. 4. Declining Purchasing Power The maximum Pell Grant currently covers about one-third of the cost of attending a public 4-year college (tuition plus room and board) – a smaller share than in the 1980s. 4Calculations by TICAS using the College Board, Trends in College Pricing 2010, Table 5a and, Pell Historical Figures.
  5. 5. Support the Federal Pell Grant Protect the Federal Pell Grant • Some have proposed cuts to Pell Grant awards and eligibility. However: – The program is not “unsustainable” – annual growth estimates are 1-2% over next ten years. – 40% of recent Pell Grant growth was due to the economic downturn, not to policy changes. – When America’s economy needs more students to complete college - and more are struggling financially to do so - we should be investing in those students, not cutting the financial aid programs that make it possible for them to work their way into the middle class.TICAS. 2011. Cutting Pell Grants Will Hurt Families and the Economy, Lower College Completion. 5
  6. 6. Related Student Aid CutsSupport the Federal Pell Grant• Summer Pell/Two Pells in an Award Year  Pell• Loan subsidy for graduate students  Pell• Student loan repayment incentives  deficit• (Proposed) Grace period loan subsidy for undergraduate students  Pell 6
  7. 7. Support the to Cut Pell Grants Proposals Federal Pell GrantHarmful cuts to Pell Grants could take many forms:• Reducing the size of the maximum grant• Reducing the size of the minimum grant• Redefining full-time attendance at 15 credits• Rolling back recent eligibility changes• Instituting an income cap• Changing the types of income considered in needs analysis• Excluding less-than-half-time students• Excluding students without a high school diploma or GED• Instituting an age cap• Reducing lifetime limits on Pell receipt 7
  8. 8. Support thePell Coalition Grant Save Federal Pell• Coalition of civil rights, social justice, education, and youth organizations dedicated to protecting college opportunity for low-income and working-class students• Key message: No cuts to the maximum grant or harmful cuts to eligibility• 8
  9. 9. What’s Next for Pell Grants?Two separate processes underway:• FY 2012 Budget negotiations: – Not out of the dark yet – Still small but significant funding gaps ($1.3 billion for FY 2012, $1.6 billion for FY 2013) – Senate wants to cover the gap, but House has proposed wide-ranging cuts• The Super Committee • Tasked with finding >$1 trillion in cuts to reduce the deficit • If no agreement, trigger cuts (“sequestration”) of $1.2 trillion (2012-13 Pell Grants would be exempt) • Everything is on the table 9
  10. 10. Federal Loans First• Federal student loans are safer and more affordable than other forms of borrowing. – Income-based repayment (IBR) caps students’ monthly loan payments to a percentage of their discretionary income. – Forgives remaining loan balances after 25 years (or 10 years if student works in public service) – See for more information.• Colleges can do more to help students avoid private loans. 10
  11. 11. Student Debt in California• California compares favorably to most other states. – 48% of California’s Class of 2009 graduated with an average of $17,326 in student loan debt (43rd and 44th in the nation, respectively).• Important factors that help keep debt down in California: – Generous Cal Grants program for four-year students. – Heavy reliance on community colleges, in which very few students borrow (and some are prohibited from doing so).For state-by-state data on student debt and methodology, see 1
  12. 12. Debbie Cochrane