Financial Aid Decision Postponed One YearBy Zareena Hussain
Associate News Editor
Originally scheduled for this September, the Congressional reauthorization of the Higher Education Act of 1965 has now been delayed until a year from now, said Dean of Students and Director of Student Financial Aid Stanley G. Hudson.
The Higher Education Act outlines and sets out money for federally funded financial aid programs, including provisions for such programs as the Stafford and Perkins loans and federal work-study.
The deadline was extended to September 1998 because of other, more pressing issues on the Congressional docket, including budget reconciliation needed as a result of the government shut-down two years ago, Hudson said.
Any change to legislation will not take place until fall of next year and therefore will not take any major effect until January 1999, Hudson said.
Reauthorization, like the passing of any legislation, takes place both in the U.S. House of Representatives and the Senate. At the House level, legislators can hold hearings in which lobbyists can outline their opinions and recommendations on the subject. From these hearings, legislators can act accordingly to effect change in the drawing up of the bill.
MIT participates in law process
The Institute participates in the process through membership in various organizations, which act as advocates for member institutions. These include the American Council on Education and the Consortium of Financing Higher Education, which includes such peer universities as the Ivy League Schools, Johns Hopkins, and Rice University, Hudson said.
Very little new money will be coming into the program as a result of reauthorization, Hudson said. The greater questions in the coming months' debate will focus on the reallocation of existing funds in a "tug between constituencies," he said.
One area of interest to Institute financial aid administrators is need analysis. Currently, the federal formula eliminates evaluation of assets, such as home equity, in determining financial aid eligibility, Hudson said. This aspect of the formula can underestimate the ability of one family to pay tuition, while overestimating the same ability of another who has pooled their assets into savings, Hudson said.
Loan, grant balance questioned
Another issue, is the argument for a greater balance between the amount of federal support that comes in the form of grants and the amount that comes in the form of loans.
In the last reauthorization that took place in 1992, the amount of grants was increased to be more comparable with that of loans; however, discrepancies still exist.
Ninety percent of Institute loan money comes through federal programs in comparison to ten percent of grant money that is federally funded, Hudson said.
Even if it was not delayed, the reauthorization of federally funded financial aid would be unlikely to cause any great ripple effect. While the chance of an increase in funding is unlikely, the chance of a decrease, also "remains slim as well," Hudson said.
Programs in the tax system have also done a great deal to take fuel out of the coming debate centered around reauthorization of the act. "A lot of the effort to provide educational benefits has been done through the tax system,"Hudson said.
While a tax break may also result in a decrease of financial aid for those eligible for both, the effect of the tuition tax break on systems of financial aid in colleges and universities across the country will not be felt until after tax forms are filed in April 1999 and financial aid decisions can be based on the 1998 income figures, Hudson said.