The Raid On Financial Aid - Black Enterprise
Black Enterprise Magazine September/October 2018 Issue

While Republicans tout the whittling down of the national deficit by a potential $50 billion to $70 billion, minority congressional members argue it is being done at the expense of educational grants, which African Americans are more likely to rely upon than other races.

The single largest source of cuts, some 70%, comes from raised interest in student loan programs and the elimination of government subsidies to private lenders. “Had Congress wanted to make education more affordable for students, they wouldn’t have made student loans more expensive,” says Luke Swarthout, a higher education associate with the State Public Interest Research Group’s Higher Education Project. “Although Congress added $3.7 billion worth of grants, they cut $12.6 billion by raising federal student loan interest rates for students and parents.”

The bill stipulates a 6.8% fixed interest rate for students and an 8.5% fixed interest rate for PLUS parent loans, which will be available July 1. “The bill did nothing to advance need-based financial aid,” surmises Swarthout, noting in particular a 1% fee paid by borrowers to guarantors.

In the budget appropriations bill for fiscal year 2006, Congress froze the maximum Pell Grant award at $4,050 for the third year in a row despite inflation and nationwide tuition increases. By comparison, the average cost of tuition at a four-year public institution rose 5.33% per year over the same three-year period. For private institutions, tuition rose an average of 8% per year. When combined with rising inflation — which averaged 2.77% for each of the last three years — this could have potentially dire consequences for many African American students who rely on the grants. Experts point out that 48% of black students rely on federal grants to finance their education. This is 10% more than all other races and 26% more than white students.

Pointing to new developments in the bill, Republicans attest that considering the circumstances, President Bush’s instructions to trim $40 billion from federal spending and expenses accumulated by several hurricanes including Katrina is actually a fair deal for students. They also tout two new, albeit temporary, grant programs. Over the next five years, the bill will allocate $3.7 billion to the programs, which benefit high-achieving students who are eligible for Pell Grant assistance.

The Academic Competitiveness Grant will provide first- and second-year students who maintain a 3.0 grade point average with $750 and $1,300, and SMART (Science and Mathematics Access to Retain Talent) grants provide $4,000 for juniors and seniors who major in mathematics, science, and certain foreign languages critical to national security. “Encouraging U.S. students to pursue these fields is not only a matter of competitiveness, it is a matter of national security,” says Sen. Lamar Alexander (D-Tenn.), subcommittee chairman on education and early childhood development. “Higher education is America’s secret weapon for its future success. We wrote a bill that accomplishes deficit reduction, as well as benefits for borrowers and greater access to higher education. This bill … [demonstrates our] commitment to higher education.”

Join the Conversation

Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, SocialWayne.com chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining BlackEnterprise.com as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and BlackEnterprise.com helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.


MORE ON BlackEnterprise.com