A higher education overhaul that allows for an increase in Pell Grant funding at universities has been signed by President Barack Obama as a part of the health care reform bill.
Students will now receive federal financial aid directly through the government instead of working through middleman lending agencies. Obama contends this stipulation will make an extra $68 billion available over the next decade, much of which will be funneled into Pell Grant funding.
The bill was signed Tuesday morning after passing the House and Senate, despite Republican opposition to the health care package.
Virginia Tech representatives are contemplating the effects that the funding increase could have on the university.
According to Mildred Johnson, director of the undergraduate admissions department, Pell Grants could affect an institution’s enrollment and the applicant’s choice to apply.
“I would certainly think that students would choose to apply more based on the amount of funds given to them, but that’s no guarantee,” Johnson said.
A student’s decision to go to a college depends largely on factors such as the reputation that a school has earned or the opinions of current students, said Johnson.
However, in some cases, a student’s financial background could play a role in the selection of an institution in situations such as the availability of financial aid and the cost of tuition, particularly for students from lower income families.
During the 2008-09 academic year, 2,752 Tech students received a more than $8.9 million in Pell Grants, according to Barry Simmons, director of scholarships and financial aid. For the current school year, the maximum grant is $5,350. Obama expects the maximum grant to rise to $5,975 by 2017.
“We want to have students to be able to afford to come here, but I do believe they would rather elect to go to other places if we don’t put forth competitive financial aid awards,” Johnson said.
On the other hand, Simmons does not believe that the Pell grant increase would make a significant difference in a prospective student’s decision.
“I don’t think the scale of the change will be enough to influence student behavior positively or negatively,” Simmons said. “It’s not that we don’t appreciate the increase. It’s just that increase in itself will help students, but that’s not going to make or break any of their decisions.”
“I chose to come here because I wanted to come here, but money wasn’t the main issue,” said Christien Byun, a Tech student who receives Pell Grant funding.
“I didn’t make my decision based on the cost of the school,” Byun said.
The reform also lowered monthly payments for Pell Grant recipients from 15 percent of discretionary income to 10 percent of discretionary income.