Money Loser for UC/UCLA

House Republicans’ rewrite of the Higher Education Act was a dud in almost all respects for student aid advocates and higher education associations. But in its proposal for the Federal Work-Study formula, the bill appeared to deliver on calls to make the program’s funding allocation more equitable.

The work-study formula has long been criticized for unfairly favoring elite private colleges in the Northeast.

Under the PROSPER Act -- as House Republicans have deemed their bill -- those are the institutions that would lose out the most on funding, according to an analysis by the American Council on Education.

The new formula would distribute funding in some surprising ways, however. Community colleges would see a big boost in work-study funding. But for-profit colleges would, too.

...The list of colleges potentially losing the most under the new formula does include some large public institutions with high proportions of Pell recipients, like University of California, Los Angeles, and the University of Washington Seattle. But they also include elite private colleges like Harvard, Northwestern and Cornell Universities.

The formula in the PROSPER Act was designed to move the distribution of work-study funds away from a system that awards traditional participants in the program like those institutions. It phases out existing base allocations over several years, instead rewarding institutions that serve a high proportion of Pell students. A separate formula for any program funding above $700 million would reward colleges that have success working with Pell students.

According to ACE’s projections, big winners in terms of total new work-study funds under PROSPER's formula, meanwhile, include public four-year institution Georgia State University, the for-profit Florida Career College and the private American Baptist Theological Seminary.

House Republicans say that’s because those campuses are the ones serving the students with the most need. A GOP committee spokesman said the PROSPER Act is the biggest expansion of the work-study program ever.

“Through the much [needed] formula reform, work-study dollars would flow to those institutions serving the neediest students rather than those charging students the highest tuition,” the spokesman said.

But ACE said the work-study formula shouldn’t be discussed without acknowledging the elimination of the Supplemental Educational Opportunity Grant, the other major remaining campus-based aid program. While critics of work-study have said it is not distributed equitably, SEOG was weighted toward campuses with the most Pell recipients. And while the bill proposes doubling the size of the work-study program, it eliminates the $732 million in campus-based aid from SEOG.

The group also says the exclusion of graduate students from work-study fits within a larger framework in the PROSPER Act that disadvantages those students.

In 2016-17, more than 13,000 students in the University of California system received work-study aid, said Claire Doan, a spokeswoman for the system. That figure included about 800 graduate students, who would be ineligible for the program under the House legislation.

The University of California, Berkeley, and UCLA, the two biggest recipients in the California system, would lose about $2.2 million in work-study funding in year six of ACE's projections.

“By reducing the funding to Federal Work-Study and similar campus-based financial aid programs, students will have to find alternative funding sources, such as loans,” Doan said. “Further, if these students do not have access to federal loans because they are capped, they would be forced to seek out private loans, which do not offer the same consumer protections.”...

Full story at:
https://www.insidehighered.com/news/2018/02/14/projections-show-house-work-study-proposal-would-benefit-profits-community-colleges