More Pell Grants could create more problems

President Bush's plan to increase the amount of financial-aid grants seemed to be a step forward in improving the availability of federal funding for students.

But education groups say the plan may actually end up doing more harm than good by cutting other programs in the process.

Bush recently released his 2008 budget, which proposes a raise in the maximum monetary aid of the Pell Grant, the largest type of federal aid for underprivileged students, from $4,050 to $5,200 by 2008.

However, to make way for the increase, several other financial-aid programs - chief among them the Supplemental Educational Opportunity Grant - may eventually be cut.

According to the American Council on Education, the elimination of the SEOG program, in which the federal government gives universities funds to add to their financial aid pool, would negatively affect 1.3 million students.

National Association of Independent Colleges and Universities spokesman Tony Pales said that the increase in Pell Grants is welcome, but not at the expense of other aid.

"The current set of grants needs to be protected, not dismantled," he said.

Ultimately, the number of students receiving federal aid would drop from about 6.5 million to 5.5 million by 2008 as a result of the total program cuts, according to budget documents.

But not all experts believe this to be a bad move on the part of the Bush administration.

Mark Kantrowitz, publisher of FinAid.org, sees the SEOG as an unfair way to award grant money and believes that the new plan would make grants "more equitable."

Kantrowitz pointed out that, through the SEOG program, some universities receive more federal money than others in a fairly arbitrary process.

"Campus-based funding is problematic because it is influenced by historical factors," he said, explaining that the government gives some universities large amounts of funding merely because it has done so in the past.

Kantrowitz added that the Pell Grant system works directly with students rather than giving universities discretion over how much aid students receive.

But from the University's perspective, the Pell Grant debate will likely end up being a non-issue.

Frank Claus, associate vice president for finance, said Penn is committed to fulfilling the full financial need of every student, something that will be accomplished with or without federal grants.

The maximum award from a Pell Grant only equals a small fraction of Penn's total tuition, while grants and loans from the state and the University supply much of the aid.

Still, like others in higher education, Claus supports the raise in the Pell but finds the cut of the SEOG detrimental - though he realizes that something has to give.

"We would love to see the Pell go up and the SEOG stay," Claus said, "but you can't have everything."

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