As Congress begins hearings on the federal budget for fiscal 2010, officials at traditional universities and online colleges alike said President Obama’s budget proposal would make grants available to more college students and encourage adults to earn degrees and bolster their resumes during an economic downturn that has seen the job market stagnate.

The Obama administration’s federal education budget for the fiscal year that begins Oct. 1 includes a major shift in the Pell grant program, which would increase by 13 percent–making more money available while expanding eligibility. The maximum Pell grant under the new plan would be $5,500.

The federal government would continue to offer direct lending as college applicants struggle to find lending companies willing to loan tens of thousands of dollars every school year. Obama’s 2010 budget proposal also alters the federal Perkins loan program to encourage more opportunity for low-income applicants. Universities and colleges that provide need-based aid for students would be rewarded with Perkins funds, which would increase from the current $1 billion annually to $6 billion in the newest budget plan.

Excelsior College, a 33,000-student online institution based in Albany, N.Y., saw the number of students using Pell grants double from January 2008 to January 2009, especially among adult learners returning to higher education.

"The economic downturn, combined with the [increase] in financial aid, is triggering a much stronger interest for adult students," said Paul Shiffman, Excelsior’s assistant vice president for strategic and governmental relations. "It is important for us to recognize that we have a burgeoning adult population that is coming back for more education and to revamp their skills so they can remain viable in the workforce. It’s almost become a necessity."

Online colleges and universities are benefiting from the wave of federal dollars alongside their brick-and-mortar counterparts, thanks to a 2005 law that made web-based students eligible for Pell grants and other federal assistance, Shiffman said.

"For the most part, [the federal government] did not recognize part-time adult learners" before the eligibility was altered, he said. "But we’ve seen that … financial aid equals access."

Michigan State University has had a 27-percent increase in Pell-grant recipients over the past year, said Val Meyers, the university’s associate director of financial aid. About 8,900 Michigan State students will receive Pell-grant aid in 2010, a jump from the 7,000 who received the assistance during the 2008-09 school year.

The average amount of aid per student has increased, too. The average Pell-grant recipient at Michigan State received about $3,400 last year. In the coming year, the average student will get $4,300 from the Pell grant program, Meyers said.

"Where I think it has the most use is to let nontraditional students into college," Meyers said, adding that bolstered aid programs have attracted adults who have been laid off or had hours cut back during the current recession. Job-placement officials often tell out-of-work adults about the newest rounds of college financial aid, and universities have seen a corresponding enrollment spike, she said.

"But what I see happening for many institutions is that they will become more selective, because the number of applicants continues to grow," Meyers added.

States nationwide have seen marked increases in college enrollment, with many officials crediting the increased availability of financial aid. The Minnesota State College and Universities system announced this spring that enrollment in all state institutions had jumped by 4 percent since 2008, with the largest increases coming at Minnesota’s two-year colleges.

Some two-year schools have seen double-digit enrollment jumps since last year. Northeast Alabama Community College announced a 13-percent increase, and college officials believe that number could rise to more than 15 percent. The college now has a record-high 2,708 students, according to its web site.

Obama’s 2010 budget proposal also aims to simplify the financial aid application process. The complexity of the applications forms have elicited gripes from students, parents, and college administrators in charge of processing student aid paperwork, officials said.

Applicants have long complained about having to resubmit the same personal and financial information every year when it comes time to renew financial aid. Most of that information remains unchanged, but parents and students must repeat the arduous process to apply for continued aid every school year.

The Free Application for Federal Student Aid (FAFSA) form–complete with more than 100 questions for applicants–has not been changed since the early 1990s. Simplifying the process could mean trimming FAFSA to just a few pages, higher-education officials said.

"There’s a sense that the feds have the same answers to the same questions in five different places," Shiffman from Excelsior College said. "It is overly complex. … To have to repeat the process on an annual basis is just crazy."


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