Although the plan still must receive approval from Congress, the current draft of the budget aims to increase the maximum amount given to students who qualify for Pell Grants, double the number of students eligible for the Federal Work-Study Program, limit an increase on loan interest rates and encourage universities to find innovative ways to keep tuition manageable.

“It’s always good to see that they’re paying attention to students’ financial aid on a national level,” said Val Meyers, associate director of the Office of Financial Aid. “We want them to be aware that students need help.”

Meyers said it’s too soon to say what the budget proposal, specifically the increase in the Pell Grant maximum, will mean for MSU, but the proposed minimal increase to the Pell Grant still is a good sign. She said the $140 increase, making the maximum Pell Grant about $5,785, could mean students receive a small amount more money, with the neediest students receiving the most.

College of Education Dean Donald Heller said the increase only is about 2 percent, and likely won’t have a large impact at MSU because tuition likely will increase at a higher percentage. He said Obama’s plans for college loans, if approved by Congress, probably will have the greatest impact on students.

Although under current legislation, interest rates on Stafford loans are slated to rise from 3.4 percent to 6.8 percent this summer, the 2014 budget calls for new loans to have interest rates based on the market rates each year, which would remain fixed for the life of the loan.

According to the budget, repayment options also will be expanded so students do not pay more that 10 percent of their income on loan payments.

The interest rate changes were of particular concern to first-year law student Katie Oberer, who said she is pursuing her second degree through a combination of scholarships and loans.

“Obviously, more can be done to reduce the cost of higher education,” Oberer said. “I think it’s a good step … any help with loans would be great.”

In addition to student grants and loans, the university likely would benefit from proposed increases in funding to organizations, such as the National Institutes of Health and the National Science Foundation, if the university were able to receive more grants from them, Heller said.

Competitive grants, including First in the World Fund and a Higher Education Race to the Top Competition also were proposed in the budget and aim to encourage innovative ways to limit tuition increases.

Limits to cap tuition increases also were proposed by Gov. Rick Snyder and state legislators.
A proposed House budget limits tuition increases to 3 percent or colleges will risk losing funding.

In 2011, state legislators claimed MSU raised tuition more than the 7.1 percent ceiling that year, although a state budget director eventually found the university was in compliance.

MSU Trustee George Perles said although the White House generally has not done enough when it comes to the costs of higher education, he hopes the budget will have at least a small positive impact on MSU tuition.

“We’re always doing hard work to make sure that we can improve that,” Perles said of the cost of
higher education. “We want to keep it as low as we can for students.”