House spending proposal won't affect Hopkins

House Republicans are seeking to revamp distribution of campus-based federal aid in a reallocation that could favor community colleges and for-profit institutions.

The representatives argue that the current process favors elite northern universities and that reforms should be introduced to focus aid on institutions with more low-income students.

The overhaul won't have a substantial effect on Johns Hopkins University, said Ellen Frishberg, the University's executive director of student financial services, but it could cost Hopkins' peer institutions -- such as Harvard University -- millions of dollars in federal aid.

The overhaul would affect three federal aid programs: the Federal Supplement Education Opportunity Grants (SEOG), the Federal Work Study (FWS) and the Federal Perkins Loans. These are grouped together as "campus-based aid programs," since they are distributed directly to each university rather than to eligible students.

The funds are allocated based on a formula developed in the '70s, so that each enrolled institution has a "base guarantee" -- a minimum amount of ensured aid regardless of the institution's "fair share," the financial need calculated each year.

The reduction urged by National Association of Student Financial Aid Administrators would see a reduction of the base guarantee by 20 percent each year for five years, said Frishberg.

"We get our "fair share,' the amount our students qualify for us to get," she said of Johns Hopkins. "But some other schools have a "base guarantee' that is higher than their "fair share.'"

Hopkins' base guarantee is valued at $459,109, and its 2004-05 "fair share" was valued at $484,437.

"Federal aid is such a small piece at Hopkins," she said. "It's 10 percent of what we give our students."

Hopkins' peer institutions aren't the only universities that may suffer from the proposed reallocation -- large public institutions, such as the public university system of California, depend heavily on the federal grant package since they receive so few private endowments.

"Some could lose upwards of half a million dollars annually," she said.

Schools that could suffer most include the public university systems in Maine, Michigan and California, as well as private schools across New England.

Although large private institutions -- and most of the Ivies -- will probably absorb the cut, public institutions will be hard put to find a substitute, said Frishberg. "The big public four-year programs -- UCLA, Berkley, any of those large flagship research universities -- were early committers to the program" she said.

Developed in the 1970s, the formula for the "base guarantee" was initially intended to protect institutions involved in the federal aid program because of the cost of administrating the federal loans, work study and grants.

"There was a complex formula to make sure that schools that already were in [the program] would be protected," said Maureen Budetti, director of student aid policy at the National Association of Independent Colleges and Universities. "There were certain administrative costs, so that schools that committed and started doing these programs would have a certain financial base, and the appropriate funds would increase over time so that new schools could come in."

But often the "base guarantees" only depended on the quality of grant applications, rather than institutional quality or needs.

"It had a lot to do with who was writing your grants," Frishberg said.

Budetti -- whose organization represents 900 private universities -- said the reallocation will just shift aid.

"It would just be a lot of shifting from certain poor students to other poor students," said Budetti. "You would be taking from students at large public institutions and some privates, and it would be mostly going to the for-profit sector or community colleges."

Much of the shift in aid would move to the south.

"Probably in large part you would get the shift from the established, the older population centers, to the new growing sectors," Budetti said. "The states that might win would be Texas, Arizona and Florida."

Frishberg thinks for-profit institutions -- such as Sylvan, Kaplan and the University of Phoenix -- would gain from the possible overhaul.

"I think we'll see corporate higher education getting a larger share," Frishberg said. Budetti said it could even limit the options of low-income students.

"By giving students who were going to any Ivy League an extra grant, that meant that you could have poorer students attending private schools," she said.

But even if the proposal were to pass through the House, Budetti gives it little credence in the Senate."While the House seems interested in doing this, the Senate is probably less like to," she said, "because about half the states would lose money and half the states would gain money."