House might reinstate MAP funds

By Tammy Sholer

Possible funds for Monetary Award Program recipients to offset the tuition hike are still a reality if the House Appropriations Committee amends Senate Bill 1520.

Supplemental general revenue funding of about $4 million, which originated as SB 1525, would be enough money to offset the tuition increase for MAP recipients, Illinois Student Association President David Starrett said.

owever, after the Senate amended SB 1520 it did not include funds for MAP recipients, said Kathy Rooney, Illinois State Scholarship Commission’s assistant to the director.

SB 1520 still has to go before the House Appropriations Committee at its November hearing, and it is unlikely the House will pass the same version as the Senate, Rooney said. The House still could reinstate some funds for MAP recipients, she said.

If the House passes an entirely different bill it will go before a conference committee to discuss the availability of additional MAP funds, Rooney said.

There is the possibility nothing will be done about the bill until spring, which means MAP recipients this spring will not receive additional funds, Rooney said.

But she said she does not think the bill will be left until spring. “I think some money will be approved,” Rooney said.

In related matters, the Gramm-Rudman-Hollings Act has caused withdrawal of existing education funding, Starrett said. He said the act provides for funds to be withdrawn from the budget if the General Assembly cannot agree on a target level by Nov. 20.

The most immediate effect of this development is lenders losing income because the Guaranteed Student Loan Special Allowance was cut from 3.5 to 3.25 percent above the Treasury bill rate, Rooney said.

The special allowance to lenders is an interest subsidary from the federal government paid to lenders.

Starrett said the reduction caused several lenders to drop from the program, and further reduction to the 3 percent level might cause additional lenders to drop the program.

Lenders are dropping the program with the lower T-bill rates because they believe the program is not worth the cost of continuation, an ISA financial report stated.

In addition, marginal return rates on GSL’s are normally low so lenders need the special allowance for them to keep the program, the report stated.

If the General Assembly fails to agree on a budget, the automatic spending reduction process will go into effect, and other scholarships besides the GSL, such as the Pell Grant and various campus financial aid programs, will be cut, Rooney said.

The short-term effect to students is an increase of the originating GSL fee from 5 to 5.5 percent, Rooney said. The increase was part of the cost-saving measure, she said.