Sandra Steele, Educational Consultant

Financial Aid Update from Texas Association of College Admission Counselors ... Legislative Update

Courtesy of Association of College Admission Counselors

A Christmas Surprise for Needy Students

Change in Federal Formula Means Thousands May Lose Student Aid

As many as 90,000 students could be disqualified from receiving Pell Grants and other forms of federal and state financial assistance under a change that the Bush administration has made in the formula the government uses to calculate a student's need for aid.

Two days before Christmas, the U.S. Education Department announced that it had, for the first time in a decade, updated the amount it allows families to deduct for state and local tax payments when applying for financial aid.

According to an analysis by the American Council on Education, about 1.3 million students and their families will see their eligibility for federal financial aid cut because the new formula will show them to have more discretionary income available to pay for college than before. The families of the approximately 90,000 students disqualified from Pell Grants could also appear to be rich enough that they would be ineligible for state and institutional aid as well, according to the council.

Despite opposition from Democratic lawmakers Congress gave the department the green light to make the change in the formula when it approved a vast budget bill last month for the 2005 fiscal year.

Lobbyists were not surprised that the announcement came right before Christmas.

"It's not unusual for federal agencies to release unpleasant news when people aren't paying attention," said Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education.