Daily Aid 78: CNBC Followup, Stimulus

Home » Eye on the Economy, Politics, Scholarship Update

Daily Aid 78: CNBC Followup, Stimulus

9 February 2009 1 views No Comment

Daily Aid 78: CNBC Followup, Stimulus

Student Financial Aid News

A followup from the CNBC story on Thursday night:

I thought of my brother, who’d been laid off in December, and his daughter who is a freshman at an expensive private college. He’d gone through all of the school’s procedures, filled out the “mid-year change in circumstances” forms, and had received a “Sorry, this year is all set” note back from the financial aid office. I wasn’t sure if this was the type of situation that Chris was looking for, but sent him off a tweet in response anyway.

The morning after the broadcast, Hugh crafted a note to the school, using the tips Chris had given him. An hour after hitting “send”, he received an email back, letting him know that his daughter’s grant had been increased for the semester.

Commentary

I couldn’t be happier with the outcome. I’m glad that we made a difference.

Featured Scholarships

Eye on the Economy

From Inside Higher Ed:

A compromise amendment worked out by moderate Democrats and Republicans in the U.S. Senate late Friday slashed billions of dollars that would have flowed to colleges and universities in the Senate’s original version, with the biggest cuts coming in education aid to states and funds to modernize college facilities.

To the relief of advocates for students, the compromise legislation sustained $13.9 billion to increase the maximum Pell Grant for needy students, which budget cutters had eyed. College and student lobbyists had worked aggressively late last week as various drafts of the compromise amendment emerged showing Pell funds in and out of the plan, but when Sens. Ben Nelson (D-Neb.) and Susan Collins (R-Maine) revealed the final plan’s contents late Friday evening, Pell was in.

Commentary

Ironically, the Senate’s moves are likely to make things worse rather than better. The Pell Grant has no place in an economic stimulus bill. Here’s why. The Pell Grant provides additional money for low income and middle income families to afford college. It effectively provides additional spending money for a family that would have been used for education. As is typical with most legislation in Washington for higher ed, changes would have been reflected at the turn of the fiscal year, July 1 – and that’s why Pell Grant funding has no place in a stimulus bill.

Is the Pell Grant important? Absolutely. Do low income and middle income students need more assistance affording college? Unquestionably. Would inclusion of the Pell Grant generate jobs?

No.

Or at least not in a timely enough manner. What the economy needs now, more than anything, are jobs. Employment. In Friday’s BLS data, unemployment hit 7.6% but the news no one noticed was that in terms of real human beings, more people are unemployed now than at the peak of the Great Depression. Financial aid, by contrast, has a lagging effect – new money for the Pell Grant will save families money beginning in July 1, but not before then.

Given that the economy has been losing jobs at a rate of 500,000 or so every month, any measure that has an effect delayed for 6 months should not be in a stimulus bill. Any measure that has the opportunity to immediately hire people is what belongs in a stimulus bill. We need jobs – everything else depends on that.

Increases to financial aid are important – they just belong in different legislation.

Did you enjoy this? If so, please consider subscribing for free to get it delivered to you. Subscribing for free means you don’t have to remember to download it every day.
+