With the economy in a serious slump, state systems of higher education are on the chopping block again, as governors and state legislatures trim the “fat.” Private schools have seen large chunks of their endowments vanish. Who is the biggest loser? Students. As endowments and costs are slashed, tuition rates and fees for incoming students increase.

Citing the strains on lower- and middle-class families who are trying to send sons and daughters to college, a coalition of higher education and consumer advocacy groups sent a letter Thursday to Speaker Pelosi arguing for some assistance for students in the upcoming stimulus package. Campus Progress, the U.S. PIRGs, and the Project on Student Debt were all involved in this effort. The letter proposed some actions Congress could take in the new stimulus bill to help college students:

  • Raise the maximum Pell Grant to $7,000
  • Increase funding for the Federal Work-Study Program by 25 percent.
  • Improve access to Parent PLUS loans.
  • Provide a limited “emergency access” student loan pool for colleges that commit to providing adequate need-based aid.

While there are those families too poor to realistically consider college right now who we should never forget, these lower- to middle-class prospective students should absolutely be remembered as Congress prepares to draft this legislation.

As the last point in the proposal indicates, one way to honor the blue-collar student is to substantially decrease merit-based aid in favor of need-based aid. Ben Miller, at Higher Ed Watch, explains why:

Every single public college contacted for a recent survey by the National Association for College Admission Counseling said it provided non-need based assistance, or “merit aid.” The same survey found that merit aid made up 41.9 percent of public institutional funds, only slightly less than the 46.6 percent devoted to need-based institutional aid. This is troubling because “merit aid” is not targeted at low-income students, and is instead used to compete for the best (and sometimes the wealthiest) students to boost prestige and fundraising. Schools should not be allowed to continue to spend their limited financial aid budgets on non-needy students when low- and moderate-income students are being asked to shoulder ever-larger tuition burdens.

Miller’s post as a whole is instructive. Too often institutions of higher education pass on their financial troubles, in the form of tuition increases and student fee hikes, to the students. Perhaps the institutions could look at possible cuts they could be making from within and examine opportunities for streamlining instead of erecting barriers to a college education, a critical piece of the American Dream for many families.

Congress could help my incorporating most, if not all, of this proposal into the new economic stimulus legislation.

(h/t to Pedro de la Torre at pushback)