Got A Pell Grant? You May Have To Find Another Way To Pay For School

The nation's largest grant program is being downsized by $270 million.

Tens of thousands of college students who depend on government grants to help pay their way through school will be forced to find new ways to come up with tuition, thanks to severe cutbacks in the nation's largest grant program. The Pell Grant is being downsized by $270 million, according to a new report by the Congressional Research Service.

While the Department of Education has downplayed the impact — telling The Washington Post that it would only affect a handful of students — the exact number who would be barred from receiving aid is closer to 84,000, while a million other students who do get grants will likely find that the amount awarded will be smaller once the changes take affect in the 2004-2005 academic year.

The cutbacks come courtesy of a revision of the federal formula that governs financial aid, which the House passed earlier this month to amend the Higher Education Act. The revision penalizes students applying for need-based aid if their families deduct any of their educational cost on state taxes, because it makes it appear as if they have larger incomes. The state's tax tables have been unchanged for nearly a decade.

"One of the key questions is how the need analysis system should take ... tax-based resources into account in determining what families can be expected to contribute toward college expenses," the report reads. "Another issue that may be debated is how well the premises and process of federal need analysis serve non-traditional students. For example, some of these students may be seeking assistance for sporadic course-taking to bolster their economic opportunities ... making them ineligible for any Title IV student aid, or they may enroll on less than a half-time basis, making them ineligible for Title IV loans."

The report also notes that government spending on education is expected to rise, so that while some students will no longer qualify, more people will receive Pell Grants in 2004 than they did this year.