Student Loan Blog : Academic Competitiveness Grants

Students Could Wave Goodbye to Merit–Based Federal Aid

Student Loan Girl — Thu, 25 Jun 2009 16:41:00 GMT

In another move to restructure the federal financial aid system, President Obama has proposed ending the government’s five-year foray into merit-based student aid and redirecting those financial aid funds to the need-based Pell Grant program, reports The Chronicle of Higher Education (“An Experiment in Merit-Based Student Aid Is Likely to End,” June 26, 2009).

The Academic Competitiveness Grant and the National Science and Mathematics Access to Retain Talent Grant programs were created by Congress in 2006 to encourage students to take academically “rigorous” coursework in high school and then choose college majors in fields with labor shortages.

Only students who are eligible for need-based Pell Grants can qualify for the Academic Competitiveness Grants, which provide $750 and $1,300 to college freshmen and sophomores respectively, and for the SMART grants, which provide $4,000 to college juniors and seniors who major in science, math, and certain foreign languages.

But so far both grant programs have fallen short of their participation projections, due in large part to the Department of Education’s failure to promote the programs, as reported by the department’s own inspector general in 2008.

The other major problem has been the programs’ vague qualification criteria, which has made it difficult for financial aid officers’ to determine award recipients. The American Council on Education, in a 2006 letter to the Department of Education, called the grant program’s guidelines “unworkable” and defined them as placing a “breathtaking administrative burden” on colleges’ financial aid officers.

Obama’s Proposal Receives Support From Education Officials

Education Department officials support the president’s proposal to make the Pell program an entitlement with annual increases tied to inflation and to raise the maximum Pell awards by $200 to $5,500 by the 2010–11 academic year because, they say, the Pell Grant program better serves low-income students than the competitiveness grant programs.

This proposal “would benefit the vast majority of the nearly six million Pell Grant recipients worldwide,” even though the annual increases amount to significantly less funding for the one in 10 students who qualify for the Academic Competitiveness and SMART grants.

Even former Secretary of Education Margaret Spellings, who crafted the merit-based programs under the Bush administration, backs the proposal.

“Do higher education officials and K-12 officials prefer free money with no strings attached? Absolutely,” Spellings said. “But if we’re trying to move the needle, putting resources behind our policy goals is a more powerful and prudent way to go."

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House Dems Get Second Crack at Higher Education Appropriations Bill

Student Loan Girl — Wed, 25 Feb 2009 23:23:00 GMT

Just days after President Obama signed a $787 billion economic stimulus bill into law, House Democrats have reintroduced a $410 billion overdue appropriations measure that would finance dozens of federal agencies and programs, including many related to higher education, whose budgets went unapproved during the last session of Congress, reports The Chronicle of Higher Education (“Delayed Appropriations Bill Would Increase Pell Grant and Research Funds,” Feb. 24, 2009).

During the tail end of the Bush administration, democratic lawmakers chose to put the original appropriations bill on the back burner after President Bush threatened to veto any measure that would exceed his fiscal budget. Instead, legislators passed a “continuing resolution” to fund the budgetless organizations at fiscal 2008 levels through March 6, so that legislators could revisit the appropriations bill under a new administration.

Lawmakers, after being delayed by work on the stimulus bill, are finally taking a second look at the appropriations bill just days before the continuing resolution’s termination date and President Obama’s scheduled release of his fiscal year 2010 budget.

The proposed spending bill will “keep the government running and finish last year’s business,” said David Obey D-Wis., head of the House Appropriations Committee, as wells as complement the Obama administration’s economic recovery package.

While the proposed budget measure will provide expanded funding to a variety of agencies and programs, it currently offers few specific financing details. The Fund for the Improvement of Postsecondary Education could get $133.7 million to fund projects intended to model improvements to college education and accessibility, the Gear Up program could get $313.2 million to help financially needy middle and high school students prepare for college, and the government’s student financial aid programs could get a $19.2 billion boost.

The House Appropriations Committee bill would also expand research funding for the National Institutes of Health by $938 million, and provide an additional $347 million in funding to the Federal Pell Grant Program, drawing on the budget previously allocated for the underutilized, and Bush administration-supported, Academic Competitiveness and National Science and Mathematics Access to Retain Talent grant programs.

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Education Department at Fault for Low Participation in Grant Programs, Audit Shows

Student Loan Girl — Tue, 05 Aug 2008 00:58:00 GMT

In an audit of the Department of Education, the department’s own inspector general blames the lack of participation in the government’s Academic Competitiveness and National Smart Grant programs on his department’s failure to effectively promote the programs, according to an article in The Chronicle of Higher Education (“Education Dept. Blamed for Not Doing Enough to Promote Grants,” August 4, 2008).

Low-income students who completed their state’s rigorous coursework requirements in high school are eligible for Academic Competitive Grants, otherwise known as ACG, during their freshmen and sophomore years of college. Smart Grants are awarded to low-income college juniors and seniors who are taking classes toward the completion of specific majors, including math, engineering, or technology, and maintain a 3.0 GPA.

The audit, released Friday, suggests that the Education Department hasn’t done enough to “follow-up with nonparticipating schools to ensure those [schools] required to participate” in the two programs were doing so, the inspector general said.

Although Congress approved $790 million in grants for the two programs during the 2006–07 academic year and up to $4.5 billion through 2010, the Education Department only awarded $242 million in Academic Competitiveness Grants to 310,000 students, and only $206 million in Smart Grants to 64,000 students.

Secretary Spellings Justifies Programs’ Shortcomings

Last month, Education Secretary Margaret Spellings suggested that the low participation in the grant programs was due to the fact that not enough high schools were teaching courses that meet the academic standards of the program.

While Spellings lays the blame on high schools, the inspector general’s report showed that the department had a list of 640 nonparticipating colleges and universities that were potentially eligible for the ACG program.

More than half of the schools did not respond to the department when it attempted to contact them. In a random sample of 75, or 23 percent, of these 330 nonparticipating schools, however, the report found that more than 83 percent were considered eligible.

And among the 310 schools that did respond to the department’s outreach, administrators at 23 percent of these schools said they didn’t know their schools were eligible. The inspector general found that more than 73 percent of these school were, in fact, eligible for the programs.

To improve participation in the programs, the inspector general recommends that the Education Department do a better job of reaching out to colleges and universities with eligible students. The department should also consider fining schools or taking away their eligibility to participate in the federal Pell Grant program if they have qualified students enrolled but don’t participate in the ACG or the National SMART Grant programs.

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Smart Grant and Academic Competitiveness Grant Terms Remain Unclear

Student Loan Girl — Tue, 24 Apr 2007 16:49:00 GMT

Recently, a rule-making panel convened to formulate the terms of qualification for students who receive the Academic Competitiveness Grant and Smart Grant. Unfortunately, they did not come to a consensus, which means that Education Secretary Margaret Spellings can disregard the group’s recommendations, as reported in the April 19, 2007 article by Kelly Field, titled “Rule-Making Panel Fails to Agree on Terms for New Federal Grants,” that appeared in The Chronicle of Higher Education issue of the same date. According to the article:

“Negotiations over the rules that govern the Academic Competitiveness Grant and Smart Grant programs ended in stalemate on Wednesday after members of a rule-making panel created by Secretary of Education Margaret Spellings failed to reach agreement on a package of proposed regulatory revisions.

“The group’s lack of agreement means that the secretary is not bound by the panel’s recommendations, and may propose any changes she wants in the programs.”

‘Certain Students’ Ineligible for Grants

Apparently the panel consisted of 14 individuals, six of whom voted against the proposed package, largely on the basis that these grants would not be provided to a certain type of student, as the article stated:

“Those negotiators said they were disappointed by the department’s refusal to provide the competitiveness grants to students in certain certificate programs. Early on in the three-month-long negotiations, the department said it was considering extending eligibility for the grants to students enrolled in certificate programs that award credits that count toward an associate or a bachelor’s degree. But the department abandoned that idea last month, saying it would be too expensive and could open up the program to fraud.”

Other Terms for the Grants as Outlined in the Article:

“The draft regulations voted on on Wednesday would also:

Explain how colleges may calculate transfer students’ grade-point averages. …”
“Establish a process by which colleges could ask the secretary of education to add additional majors to the list of mathematics and science majors eligible for Smart Grants in a given award year.”
“Clarify that students who had previously enrolled in college as part of an ‘early college’ program would remain eligible for the grants so long as they were above the age of compulsory attendance in high school and had never received federal funds while in high school. …”
“Detail how students may demonstrate their intent to declare a major in a math or science field and how colleges may document progress in that major. …”
“Clarify that in order for students to be eligible for Academic Competitiveness Grants, they must either receive a diploma or, in the case of home-schooled students, a certification of completion from their parents.”

It is important to keep up to date on all the news regarding student loans and education.

Talk to the education financial advisors at NextStudent. They have all the information and advice you need on student loans. Check out www.nextstudent.com.

Be sure to tune in next Monday for my next blog on student loan issues in the news.

Student Loan Girl

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SMART/AC Grants Open to Mixed Reviews

Student Loan Girl — Tue, 19 Dec 2006 21:59:00 GMT

“I’m grateful for any federal funding, but in terms of affecting large numbers of students, it hasn’t had a huge impact on our campus,” said David Gelinas, University of the South’s director of financial aid, as reported in a Dec. 14, 2006 article by Doug Lederman titled “Are Students Getting SMART?” that appeared in Inside Higher Ed.

Gelinas stated that his institution only had four SMART Grant recipients and about 36 Academic Competitiveness Grants awarded, the article reported. While it may be too early to tell, many schools are reporting similar challenges and low numbers of recipients in the first few months of the program. Overall the consensus appears to be that colleges “were having trouble finding enough students who met all the qualifications” for the grants.

Financial Aid Officials Give Feedback

Executive dean of student services at Des Moines Area Community College, Laurie Wolf, mentioned that less than one percent of her school’s 28,000 students qualified for the Academic Competitiveness Grants, according to Lederman’s article. “That’s just not a lot of students,” she said. She further explained that her institution has gone through extensive efforts to attempt to identify “eligible recipients of the Academic Competitiveness Grants,” and that qualification and distribution efforts have proved difficult, according to the article.

Barmak Nassirian, the associate executive director of the American Association of Collegiate Registrars and Admission Officers, gave another relevant example. Washington state’s Everett Community College that awarded more than 1,100 Pell Grants has only three Academic Competitiveness Grant recipients, the article said. Nassirian said, “ ‘The administrative burden and the effort involved in getting the ACG into the hands of the three students may outweigh’ the value to those students,” Lederman reported. This sentiment is one reflected in the challenges experienced by Wolf at Des Moines Area Community College.

The grants, which target students from low-income families who are pursuing degrees in such fields as linguistics, science and technology, have received some positive acclaim. According to the article, Ellen Frishberg, who is the director of student financial services at Maryland’s Johns Hopkins University, said her school awarded 128 Academic Competitiveness Grants and 55 SMART Grants.

While Frishberg does not address the effort taken to disburse the grants, her university has greatly benefited from the program, as suggested by the number of student recipients. “The targeting [of the programs toward science and other high-demand fields] makes total sense. This is the place I want to give poor kids more grant money,” she said.

Initial Projections Confirm Programs May Be Underutilized

According to the article, the Department of Education unveiled data confirming the grant programs were not being used as much as previously hoped. David Bergeron, director of the policy and budget development staff at the Education Department’s Office of Postsecondary Education, conceded that the projected grant recipient total figure of $686 million for 2007 falls short of the $790 million appropriated by Congress, but does not indicate a problem. “For all of us concerned about getting more grant aid to low income students, to the extent [the programs] seem to be doing that, we’re happy,” he said.

Talk to the education financial advisors at NextStudent. They have all the information and advice you need on student loans. Check out www.nextstudent.com.

Be sure to tune in next Tuesday for my next blog about this week in student loans.

Student Loan Girl

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