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The report's authors call for more federal grant money nationwide. Federally funded student financial aid grants are playing a dangerously diminished role in financing college degrees, according to a recently released report from two national education-policy institutes. The report, entitled "Do Grants Matter? Student Grant Aid and College Affordability," charges that the real value of financial aid grants has declined substantially over the past 20 years due to the rapidly growing price tag attached to a college education. The authors of the study -- conducted by The Education Resources Institute, based in Boston, and Washington, D.C.'s Institute for Higher Education Policy -- said that colleges will have to work to keep costs down and that the government will have to spend more on student aid if college is to remain affordable for students from lower-income families. Last year, Penn students received $2.5 million in Pell grants and $2.1 million from the Supplemental Educational Opportunity Grant program -- the two main types of higher education grants given out by the federal government -- according to Student Financial Services Director William Schilling. Unlike loans, students are not required to pay back money given to them in grant form. "Funding for the federal government for grant aid has not kept up [with college costs]," IHEP Managing Director Colleen O'Brien said. "Its buying power has decreased." The TERI/IHEP report cites a number of statistics in support of its central thesis. For instance, while the average Pell grant in 1976-77 covered 19 percent of the cost of one year at a private four-year school and 39 percent of the price at a public institution, those percentages plummeted to 9 percent and 22 percent respectively. The report places most of the blame on the sharp increase in the cost of a college education. Taking inflation into account, the average price of attendance increased by 49 percent from 1977 to 1997, while family income only nudged up 10 percent. O'Brien said that it is incumbent upon schools to begin to reverse that trend, but Schilling advised against cutting costs indiscriminately. "Certainly colleges should be doing what they can to cut unnecessary costs," he said. "Restraining the growth of prices is certainly a good thing as long as it doesn't sacrifice educational quality." Schilling also noted one unfortunate Catch-22 contributing to the tuition increases of the last two decades: As costs drive tuition up, schools have to spend more on financial aid, and the more schools spend on financial aid, the higher they have to raise tuition. To that end, the authors of the student aid report called upon the government to recommit itself to providing needy students with grant aid, which would reduce the heavier aid burden borne by schools over the last 20 years and the indebtedness incurred by the growing percentage of students taking out educational loans. "Yes, you can go to college, but there are things policymakers can be doing to make it more affordable for you," O'Brien said. "A commitment to funding grant aid for students is important." While not countering the overall conclusions of the report, Department of Education officials emphasized that since 1997 -- the last year included in the study -- funding for student aid has increased significantly. "The administration has been very active in raising the maximum award for the Pell grant," said Daniel Madzelan, an official in the DOE's Office of Post-Secondary Education. And Schilling, while noting that the diminishing purchasing power of federal student aid has been a "clear" trend, said that the funding is still important. "If the Pell grant went away, we'd be looking at that $2.5 million hole and we'd have to fill it in some way," he said. "Students might have to give up the chance of going to school, particularly disadvantaged students."

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