FEDERAL FINANCIAL AID FOR COLLEGE STUDENTS

WHEREAS, the federal government supports a cadre of programs providing grants, loans and work-study jobs to qualified college students from low and middle-income families; and

WHEREAS, this 30-year national commitment to college access, unprecedented in any other time or place, has enabled millions upon millions of students to enjoy the benefits of a higher education; and

WHEREAS, AFT has always affirmed the special importance of federal grant aid, particularly the Pell Grant program, because it permits the neediest students to attend college without encumbering themselves with excessive debt; and

WHEREAS, the purchasing power of federal grants is failing to keep pace with inflation or college costs. From 1981 to 1994, the cost of attending a public college or university rose by 153 percent, while the maximum Pell Grant award increased only 31 percent. The maximum Pell Grant covered nearly half the costs of attending an average college in 1980, but covers only about a quarter of costs today; and

WHEREAS, just as the purchasing power of grants has declined, there has been a dramatic increase in the number of students taking out federal college loans and the size of these loans. Between 1977 and 1987, the number of students applying for Guaranteed Student Loans tripled. Just between 1992 and 1994, loan volume increased 45 percent while the size of the average loan increased 10 percent; and

WHEREAS, the average student-aid package was 76 percent grants and 21 percent loans in 1976, but is now 72 percent loans and 26 percent grants; and

WHEREAS, the growing reliance on loans forces many graduates to avoid relatively low-paying social service occupations and is saddling too many of them with more indebtedness than they can handle, sometimes leading them to default; and

WHEREAS, the Clinton administration has proposed an increase in Pell Grants while a congressional funding proposal would have cut Pell Grant funding and removed nearly 300,000 students from the Pell Grant rolls; and

WHEREAS, the Clinton administration wants to move ahead with its direct loan initiative, which eliminates banks as loan middlemen and reduces the cost to student borrowers, while Congress wants to curb or eliminate direct lending and has supported proposals that would increase student loan costs;

RESOLVED, that AFT reaffirm its strong support for an active federal role in providing access to college for academically qualified students who demonstrate financial need; and

RESOLVED, that AFT reaffirm its support of the federal Pell grant program as the foundation of aid to the most needy students and call upon Congress to bring grant levels more closely in line with rising college costs; and RESOLVED, that AFT support the Clinton administration's direct lending initiative, oppose any effort to reinsert banks as middlemen in the making of loans and also oppose making loans more expensive for students. (Executive Council 1996)