New tax tables threaten Pell eligibility

Nearly 2000 Georgia Col-lege & State University students may lose valuable Pell Grant eligibility, now that updated tax tables have been adopted by the US Department of Education.

The highly political process of updating the tax tables was delayed a year after Sen. Jon Corzine of New Jersey proposed an amendment that would prevent the Department of Education from updating the tables for FY 2004, effectively salvaging the Pell Grant for more than 80,000 students who would otherwise lose the grant.

Despite the efforts of higher education officials, the amendment was not extended through this year, so the tax tables were changed and many students will lose out.

Director of Georgia College & State University Financial Aid Suzanne Pittman said the new tax tables offer less protection to students.

“The way the methodology for Pell Grant eligibility is there are tax tables built in to the formula. The tax tables that are used in the methodology are from 1988, so the argument for changing tax tables is that they are outdated,” Pittman said. “Using the 1988 tax tables that have been used, students were given more protection. It looked like the taxes they were paying out were at a higher rate, so more of their income was saved from the calculation. Now that the tax tables are being changed, it looks like the student has more income, which is used in determining Pell Grant eligibility.”

Pittman said 1,800 GC&SU students receive Pell Grants. She said it’s too early to determine exactly how many of those students will be affected.

“Students that are in the far end of the payment schedule, those that are receiving the minimum, they will probably be cut out,” said Pittman.

This new policy has caused a national stir because it affects so many students. Dallas Martin, president of the National Association of Student Financial Aid Administrators, expressed his concerns about the updated tax tables in a press release.

“Regrettably, the Education Department’s decision to proceed with the outdated and the methodologically flawed revisions to their federal need analysis state and other tax tables means that many need students will be forced to go deeper into debt to pursue their post-secondary education plans in the next academic year,” Martin said in a release from NASFAA.

A Federal Pell Grant, unlike a loan, does not have to be repaid. Generally, Pell Grants are awarded only to undergraduate students who have not earned a bachelor’s or professional degree. In some cases, students might receive a Pell Grant for attending a post-baccalaureate teacher certificate program.

The awarded amount is based on financial need. The maximum amount awarded for the 2004-2005 academic year is $4,050.

“I like the Pell Grant because if I didn’t get it, I’d have to spend more money in loans,” said senior History major Steven Fulbright, who has who has already received about $10,000 in loans. “Without Pell, students who are less privileged won’t have as much of an opportunity to attend college and better their lives.”

Pittman said increased debt might be the future for many students who lose Pell Grants.

“We would try to figure out what other resources they might qualify for. The biggest resource we have is student loans and so we’ll probably see indebtedness go up just because… what else are you going to do?” Pittman said.

Pittman said students who have already applied for financial aid have already done all they can do. She urged students who are interested in applying for aid for fall 2005 to do so as soon as possible.

Posted by Colonnade Archives on Feb 25 2005. Filed under News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry