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Federal Student Aid Formula: Cost-of-Living Adjustment Could Increase Aid to a Small Percentage of Students in High-Cost Areas but Could Also Complicate Aid Process
George A. Scott (au)
In FY 2008, the Dept. of Educ. dist. approx. $96 billion in fed. student financial aid, incl. $14.6 billion in Pell Grants to low- and middle-income students, to help them pay for higher educ. exp. Much of this aid was dist. based on a formula that is used to identify students who need financial assistance. How much a family can afford to contribute to college costs depends on a variety of factors, incl. the cost of living where a family resides. This report addresses these questions: (1) How does the current fed. financial aid formula affect students in different geo. areas? (2) What options exist for modifying this formula to reflect geo. cost-of-living differences? (3) How would adding a cost-of-living adjustment to the formula affect the fed. financial aid system?
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