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Republican plan might affect ND’s financial aid

Sheila Flynn | Monday, April 5, 2004

A Republican-backed plan to redistribute financial aid allocations to universities could affect Notre Dame in the future, but changes would most likely not be immediate or insurmountable, said Joseph Russo, director of student financial services.

“There’s been a rising level of interest to try to rectify what appears to be a process that doesn’t seem to work,” Russo said.

The President George W. Bush-backed proposal calls for a decrease in federal education money sent to wealthier universities with a smaller percentage of low-income students, instead of allocating more funds to institutions in which a larger population of low-income students are enrolled. In a March 26 article, The New York Times reported that several Ivy League schools, for example, receive government amounts significantly larger than the median sum given to universities across the nation. Supporters of the aid revision plan charge that such esteemed and rich schools have secured these amounts because they were better able to negotiate or were more experienced in navigating red tape and paperwork.

Russo, who has been monitoring the financial aid developments since the 1960s, said more savvy university administrations definitely did have the upper hand in the past – especially in the “earlier years,” circa 1965, when schools were required to complete a “very, very complicated application.”

He said this difficult application procedure was changed in the early 1980s in an attempt to make it more fair, requiring universities to fill out only a single sheet of paper.

“[The process changed] for the very reason not only that it was too complicated, but also to try and remove from the process what clearly had become known as grantsmanship,” Russo said.

“Those who knew how to get the money were advantaged.”

Despite the fact that the process was simplified, however, Russo said levels of funds were “grandfathered” to ensure that “those institutions that historically had been getting dollars” would still be able to support their schools and their students.

“The grandfathering factor still remains very significant in the funding process, all the way up to today,” Russo said.

He also said that a main component of aid allocation relates to a school’s tuition, and Notre Dame’s cost guarantees aid to students who might not necessarily qualify elsewhere.

“If some were enrolled at the local community college, they might not be eligible,” Russo said.

“What this comes down to is a pretty basic policy matter: Is federal student aid intended to provide access or access and choice?”

Another factor prompting the new proposal is the appearance of more proprietary schools across the country, Russo said.

“A lot of new schools have entered the process, proprietary schools,” he said. “Because so much of the funding is already set aside, they’re left with not as much opportunity. Some of the lowest income students today are enrolled in those types of institutions.”

If the government does decide to increase aid to these types of institutions and limit funding to Notre Dame, Russo said the financial dent will be felt, but it will not affect all types of aid. Money from Stafford and Pell loans, for example, comes with students and is not directly distributed by the University.

“We’re involved with the process of getting them [students] money here, but they bring both of those programs here to the tune of millions of dollars annually,” Russo said.

“The kind of money they’re talking about refers to the other three of the campus-based federal student aid programs.”

These campus-based programs include a grant, a loan and work-study, Russo said.

“Ten percent of the current federal dollars this year are what we’re talking about,” Russo said.

“One hundred thirty-five million is being administered for undergraduate total student financial aid; 35 million is federal; of the 35 million federal, about 3.5 million of that – 10 percent – would be through this campus-based federal allocation process,” the process being revised, Russo said.

The impact would be significant, he said, but not disastrous.

“The federal dollars here are significant, but they’re not the only dollars,” Russo said.

He predicted that, if the changes do occur, they would not hit the University at once; rather, they will be instituted as a “phase-out,” Russo said. And, given time and reconsideration of policies, he said he believes the University would figure out a solution.

“If that [aid] were to totally disappear, we think we would still be able to manage,” Russo said.