Jan. 31, 2013

Member advisory

HACU and the Student Aid Alliance on preserving federal student aid

HACU and the Student Aid Alliance are encouraging everyone to sign a petition to preserve federal student aid and keep America’s system of higher education the best in the world. Access the petition at the following link:

http://action.studentaidalliance.org/5371/save-student-aid-statement-support/HACU

The fiscal cliff facing the U.S. last January 1 was partially avoided by Congress making a limited number of decisions on taxes. However, in that bill, Congress delayed decisions on spending cuts until March 1. If the mandated cuts go forward, students who receive federal aid risk losing up to $765 a year.

Recent budget deals have already cut $32 billion from the student aid programs, sacrificing some students’ benefits to pay for others, and states across the country have also been cutting higher education budgets. If Congress does not act to prevent a five percent cut to student aid programs, more than 100,000 students could lose major portions of their financial aid, and millions more will see their aid reduced.

In just the last few years, more than $32 billion in student aid has been eliminated:

• The summer Pell Grant that helped low-income students study year-round and finish their degrees in a shorter time. 
• The Leveraging Educational Assistance Partnerships grant program, which paired federal dollars with state dollars to provide more aid to deserving students.
• The in-school interest exemption for graduate and professional students, which made borrowing more expensive at a time when students can least afford it.
• The interest exemption during the 'grace period' that allowed people just out of school a period of six months to get settled before accumulating interest on their loans.
• Eligibility in the Pell Grant Program for more than 100,000 students; benefits available to others have also been limited.
  

Work force projections show that by 2018, there will be jobs for as many as 22 million new workers with college degrees, but the nation's current trajectory indicates that goal will be missed by 3 million workers. The need for an educated future workforce makes it more important than ever to preserve, protect and provide adequate funding for the core federal student aid programs, which offer students an opportunity to acquire the knowledge and skills our nation demands for a strong recovery.