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Critics: Even tiny income hurts college students' federal grants

April 12, 2004

BY DAVE NEWBART Staff Reporter

Like 70 percent of UIC students, Nur Abdellatif holds a job to help cover his college costs. But he also helps pay his family's bills, particularly after his father became sick with cancer and died and his mother stopped working because of a disability.

Abdellatif's earnings as a security guard -- $7,700 -- were modest, yet when added to his parents' income, he became ineligible for a $3,500 Pell grant he would have gotten had he earned less. He now wonders if he should have worked at all.

"It's ridiculous," said the 21-year-old marketing and management major from Elmhurst, who worked up to 32 hours a week while attending the University of Illinois at Chicago full time.

His assessment is not unique. Critics point to a host of frustrating problems with rules governing the federal government's primary financial-aid vehicle, the Pell grant, even as a committee studies retooling the regulations.

As it now stands, most students whose parents earn more than $15,000 annually can themselves only make $2,400 before they potentially lose aid. For students paying for college on their own, the limit is $5,500. Fifty percent of student earnings above those levels must be put toward school costs before financial aid is determined. And, more than a third of a student's savings also must go toward school expenses, meaning a college student who tucks away job earnings is subjected to ''double taxation,'' critics say.

"We are a nation that believes in rewarding hard work," said Brian Fitzgerald, staff director of Advisory Committee on Student Financial Assistance, which is advising Congress on changes to financial-aid rules. "But the kids with the good work ethic are penalized because they get lower Pell grants."

While UIC Chancellor Sylvia Manning would like to see her students working less so they can focus more on academics, she realizes many students need jobs to make ends meet. Low-income students often contribute to the entire family's budget. "Cutting back their financial aid because they are working sends the wrong message and sometimes leaves them in a hopeless bind,'' she said.

More than 5,600 students at UIC earned more than the limits, potentially reducing their aid.

While the number of students impacted statewide was not available, the 140,000 recipients of non-federal Illinois aid grants worked in jobs an average of 28 hours a week -- which at minimum wage would guarantee they made more than the limit.

Fitzgerald's committee, which recently held a public hearing at UIC, has been mandated by Congress to suggest changes to financial aid law by July.

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