President Bush sent a $2.4 trillion budget to Congress Monday that included an education proposal to raise federal college freshman loan limits, but few other increases in student financial aid.
Bush's plan calls for an increase in first-year student subsidized Stafford Loan limits from $2,625 to $3,000, according to a White House press release.
The current caps on Stafford Loans for upperclassmen are $3,500 for second years and $5,500 for third, fourth and fifth year undergraduates, according to the StaffordLoan.com Web site.
"We think it is a step in the right direction," said Chris Simmons, assistant director of government relations for the American Council of Higher Education. "First-year borrowing has not changed in years."
Simmons said the American Council of Higher Education proposed unsuccessfully larger increases in student loans, including a first-year limit of at least $4,000, and significant increases to upperclassmen borrowing limits.
University Director of Financial Services Yvonne Hubbard said she favored the increase in borrowing limits but issued words of caution.
"It is a good thing to raise the limits because students depend on loans," Hubbard said. "But here at U. Va. we have a feeling about debt. We are concerned when encouraging borrowing. We don't want to see 22-year olds maxed out in debt."
Aside from general student loans, Bush also proposed an $856 million increase in Pell Grant funding for more individual awards.
Of the proposed Pell Grant funds, $33 million would go to provide additional Pell Grants of up to $1,000 to low-income students who are State Scholars and enroll in college preparatory classes.
"I'm not in favor to attaching Pell Grants to that kind of merit," Hubbard said. "The Pell Grant forms the basis to what is given to the most needy."
Hubbard said the lack of an increase in Pell Grants results in a loss for students who receive them.
"With tuition undoubtedly going to go up and the Pell grants staying the same, this is a loss for human beings," Hubbard said. "It is a retreat from buying power."
Simmons expressed dissatisfaction at the lack of increase in Pell Grants and Perkins Loans.
"The Pell grant needs to increase dramatically," he said. "The president has chosen not to increase funding for [the Pell Grant] this year. This is a real disappointment to us."
Bush's education proposal also does not increase funding for the Perkins Loan Program, which provides low-interest loans through colleges and universities for students with demonstrated need. Students who receive these loans repay the actual higher education institutions from which they receive them.
According to the U.S. Department of Education's Web site, the Perkins Loan is capped per student based on the amount of funding to a student's school and his or her financial need with a maximum borrowing limit of $4,000 per year of study.
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