Vocaboly.com

[Ray Woodcock]

{Excerpt from New York Times at
http://www.nytimes.com/2004/03/26/education/26COLL.html?th]

Push Is On to Limit Aid to Rich Universities
By GREG WINTER

Published: March 26, 2004


Following the Bush administration's lead, Republicans in the House say
they will push to overhaul a financial aid system that often sends a
disproportionate share of federal education money to wealthy
universities with relatively few low-income students.

For decades, hundreds of millions of federal aid dollars have been
channeled to universities through a system that sets aside a minimum
amount, typically called a base guarantee, to select institutions.

Such set-asides do not stem from the number of low-income students at
a given university, the Republicans contend. Instead, they show how
successful each institution was at securing its share in the 1970's,
when money for programs like work-study was meted out as much through
artful negotiation as need.

With many of the old guarantees still in place, Harvard, Princeton and
Yale — or any other member of the Ivy League, for that matter —
received 5 to 12 times the median amount per financial aid applicant
given to the nation's colleges to run their low-interest loan programs
in 2000-01, according to an analysis of federal data for more than
4,000 universities by The New York Times.

The Ivy League universities were also given 5 to 8 times more than the
median to pay their students in work-study jobs. And they received 5
to 20 times the median amount of grant money to look after the
everyday needs of poor students, despite having some of the largest
endowments in the nation.

In his budget, President Bush described the aid distribution as
inequitable and said the formulas should be revised. ...

As the set-asides decrease and the money is parceled out according to
where low-income students go to college, financial aid administrators
expect a significant geographic shift. Southern and Western states,
where student populations have grown in recent years, would almost
certainly draw money from the educational stronghold in the Northeast.

Beyond that, community colleges and for-profit universities, two kinds
of institutions that have had growth spurts, would also draw money
from public and private universities. ...

[The National Association of Student Financial Aid Administrators]
argues that the guarantees should be eliminated entirely, so that all
the money is distributed through what it calls a "fair share" formula.
But given the objections expected from Northeastern legislators, Mr.
Martin said, "I'm not surprised that they would not want to go as far
as we proposed." ...

The proposal to scale back the financial aid guarantees is likely to
be a contentious issue in the debate this year over reauthorization of
the Higher Education Act.

Another is whether students should continue to be allowed to
consolidate loans at fixed low rates, even when market interest rates
rise. Because the government ends up paying the difference, some
lawmakers argue that consolidation has become a de facto subsidy
program. Ending it, others contend, would increase the cost of
education by requiring higher payments by graduates.