Issue: Reauthorization: Campus-based Programs

Recommendation:  Maintain the current structure and distribution calculation of federal campus-based programs.

Rationale: The financial aid administrator is in the best position to structure a package for needy students based on the knowledge of the family's unique economic situation, and the student's unique academic status and goals.  The current campus-based programs provide the aid administrator with the maximum flexibility.  In addition, any significant modification in the distribution calculation of campus-based aid will greatly reduce the financial assistance that individual students currently receive-effecting the student's ability to persists and achieve his or her chosen academic goals.

NASFAA:  Pell Grant Program Reauthorization Recommendation:

Issue 1: Pell Grant Entitlement. [no comparable section of the HEA]

Recommendation: Create a Pell Grant Program "true" entitlement and assure that such an entitlement will extend for ten years into the future. The Pell Grant maximum should double in next five years, with an inflation adjustment after that. The maximum award under this entitlement proposal would be as follows: 

AY 2004-2005 $5,800 authorized
AY 2005-2006 $6,000 entitlement
AY 2006-2007 $6,500 entitlement
AY 2007-2008 $7,000 entitlement
AY 2008-2009 $7.500 entitlement
AY 2009-2010 $8,000 entitlement
AY 2010-2011 inflation adjustment
AY 2011-2012 inflation adjustment
AY 2012-2013 inflation adjustment
AY 2013-2014 inflation adjustment
AY 2014-2015 inflation adjustment

Rationale: The Federal Pell Grant is the keystone of the financial aid partnership for needy students.  We appreciate that the Congress has generously increased the maximum award in recent years.  Still, the current appropriated maximum award of $4,000 is well below the authorized $5,800 maximum award in the Higher Education Act.  For years, many in the higher education community and Members of Congress have been alarmed over increasing student debt and have urged increases in grant funding to redress the "grant/loan imbalance."  Only twice since the founding of the Pell Grant Program in 1972 has the appropriated maximum award matched the authorized level.  If we are serious about reducing student loan debt; if we are serious about increasing grant assistance; if we are serious about providing increased educational opportunities; then, once again, NASFAA suggests that making the Pell Grant Program a true entitlement, divorced from the vagaries of the appropriations process, is the only way we can help reduce student debt levels, guarantee adequate grant assistance, and increase educational opportunities.   

We also recommend setting a new national goal. The Congress this year is poised to complete a five-year process increase the amount of federal spending on medical research by doubling the budget of the National Institutes of Health (NIH).  With the accomplishment of this admirable goal, we call on the Congress to start anew on an ambitious national goal that will benefit so many of our citizens and the nation itself and begin a five-year process to double the Pell Grant maximum award from $4,000 to $8,000.   

We also suggest the Pell Grant entitlement go outside the bounds of the conventional legislative process and extend for ten years.  Doing so accomplishes critical goals, most important, it provides an assurance of funding for current and near-term future students, as well as showing students in junior high schools that if they meet financial eligibility requirements and apply themselves academically, then the finances for affording a postsecondary education are in place.  Such a long-term entitlement will give those who may be on the margins academically the incentive to apply themselves to their studies, knowing the funding will be there.