BY JESSE O'NEILL
President Barack Obama signed a bill this week to allocate an additional $400 billion in spending and raise the $14.3 trillion debt ceiling, avoiding a major default in the government. Most importantly for students, this new plan will sustain Pell Grants for undergraduates, but eliminate the in-school interest exemption for graduate and professional student borrowers.
"It actually increased Pell Grant spending by $17 billion. There are 13,000 students at Ohio State on the program, which is one out of four students who will qualify," Rep. Steve Stivers, R-Ohio, said.
The package grants $10 billion in Pell Grants for fiscal year 2012 and $7 billion for fiscal year 2013. This will keep the maximum award of $5,550 intact. However, the Pell Grant program will still suffer a $1.3 billion shortfall in 2012, according to Stacy Rastauskas, assistant vice president of federal relations for OSU.
"We do have to thank Congress and recognize Congress and the president for recognizing the Pell Grant Act, but unfortunately it is not a perfect measure," Rastauskas said.
The Pell Grant shortfall was expected to be $20 billion for fiscal year 2012, but was reduced to $11 billion because the Year-Round Pell was eliminated, according to the National Association of Student Financial Aid Administrations. With this new legislation, the shortfall will be $1.3 billion.
The in-school interest subsidy for graduate and professional students would be eliminated in order for Congress to save $18.1 billion during fiscal years 2012-21, according to Rastauskas.
This elimination was included in Obama's fiscal 2012 budget request to Congress, according to the U.S. Office of Management and Budget.
"Your loan is subsidized, meaning you don't have to pay the interest while being a student. Unfortunately, the measure eliminates this, despite the fact that the university came out vocally against this," Rastauskas said.
Jeremy Norris, a future OSU graduate student in social work this fall, said these cuts are not the answer and will increase debt even more.
"If you want this country to be prosperous again and come out of this depression, the last thing that you should be attacking is the education system, especially with this generation that is going out in the job market," Norris said.
The Student Aid Alliance released a statement on the debt ceiling deal saying, "Such support is vital to ensuring that talented and deserving students will have the means to earn their degrees."
However they also said, "These cuts amount to $30 billion that has been taken out of the pockets of cash-strapped college students even before the FY 2012 appropriations process is finalized."
In light of this debt crisis, Stivers is offering a Jobs Fair Aug. 15 from 11 a.m. to 3 p.m.
"We're going to have more than 60 companies that represent 4,400 open jobs right now that will be available for folks looking for a job," Stivers said.
The event will be open to the public and anyone on the job search. It will be hosted at the OSU 4-H Center located at 2210 Fred Taylor Drive in Columbus.