Fuzzy Pell Grant math

KEEP AN EYE on the money: Federal officials are expected to change the formula for giving out college financial aid. If they do, some students and their families will be left with less help.

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Federal college aid packages are based on a calculation of families' ability to pay -- a calculation that now uses 1988 tax tables. The Bush administration wants to use the most recent tax tables, saving about $300 million. On paper, families would appear to have the ability to pay more, but the plan ignores increases in local taxes. The change would affect Pell Grants and other types of aid.

Pell Grants go to low-income students and can be as much as $4,050 a year. Using the more recent tax tables would make 90,000 students no longer eligible, and another 1.3 million would get smaller awards, according to the American Council on Education.

Ohio congressman John Boehner, chairman of the House Committee on Education and the Workforce, says the total number of Pell Grant recipients should actually increase by 25,000. This makes sense, since an increasing number of people have been applying for Pell Grants, in part because a weak economy has sent more people to school.

The poorest students would not be affected. And even if students did lose Pell Grant money, financial aid experts say, many probably wouldn't drop out of school. They might work longer hours at part-time jobs or increase their use of credit cards.

The Pell Grant program itself has a structural deficit. So even though Pell Grant funding is at "an all-time high," according to Boehner, the money has to cover more students. Demand is so great that there is a $4 billion shortfall in the Pell budget. Meanwhile, families with ordinary incomes face growing college bills. The American Council on Education estimates that most of the 90,000 students who would lose Pell Grants under the new calculation would come from families earning $25,000 to $40,000 -- essentially equal to the annual cost of many colleges. Wealthier schools could probably make up for the Pell Grant loss with scholarships, but other schools might not.

It's understandable that the Bush administration wants to target grants to the poorest students. But using updated tax tables is a short-term step that leaves the larger problem of affordability unaddressed.

So college is increasingly seen as an option for rich kids -- they can afford the cost and the educational extras that can give college applicants an edge. And financial aid seems increasingly targeted to the poorest students.

The country needs a smarter debate on college costs -- one that doesn't ignore middle class families. This is a matter of educating students and building the country's future pool of talent and innovation.