American higher education’s system of need-based grants for college students, like Gaul, is divided into three parts. The largest and by far the most significant is higher education’s voucher model, the Pell Grant -- transportable to any institution listed as accredited by the U.S. Department of Education. The second, considerably smaller in scope, is state- and institutional-administered need-based aid, the most noteworthy of which is the Supplementary Education Opportunity Grant (SEOG) program. The rest of the need-based grant world is an amalgam of donor programs, some of which are administered through recipient institutions, and others  that come to students via community foundations and private entities.

All three parts serve college students who have financial need, and each has its proponents. Not surprisingly, executive branch officials favor the free-market enshrouded Pell Grant, while Congressional leaders continue to support institutional aid programs like SEOG, which were conceived and implemented in years when access and educational opportunity were viewed as a federal-state-institutional partnership.

Last week’s controversial comments -- in which Education Department officials and college leaders traded statistics and barbs over President Bush’s budget proposal to help fund a Pell Grant expansion by eliminating SEOG -- while reflecting those differences, also represented a postscript to the Report of the Secretary’s Commission on the Future of Higher Education. Relative to that exchange, several points need to be made.

First and foremost, the proposed increase in Pell Grant awards (a $550 boost, to $4,600) represents a significant commitment on the part of the Bush administration to need-based aid. Beyond the actual increase (assuming appropriations and legislative language are enacted by the Congress), this increase in an austere fiscal period represents noteworthy and successful advocacy by U.S. Secretary of Education Margaret Spellings and Charles Miller, who was chair of the Spellings Commission. They deserve our sincere commendation.

Secondly, the SEOG program needs to be retained for several important reasons. It directs supplemental funds to the neediest students and helps part-time students as well. As long as the Pell Grant fails to cover -- or even come close to covering -- the basic cost of college for the neediest students, the SEOG program is a critical tool for student financial aid offices. The SEOG program, it must be remembered, is more than a federal grant program. Each institution participating in the program must provide institutional funds equivalent to 1/3 of the federal allotment. In the process the $771 million in annual federal appropriations is leveraged into approximately $1 billion in need-based aid.

Rather than eliminating the SEOG program, it should be expanded as part of a public effort to encourage institutions and state governments to refocus funding from merit aid competition to need-based assistance. We should not forget that the SEOG program targets “need.”

Having said that, the criticisms of the SEOG program outlined by Chairman Miller in the debate over the White House Pell proposal need to be addressed. My viewpoint is that one of his criticisms is not warranted, the other clearly justified. To criticize the SEOG program for having 5 percent administrative costs is not particularly persuasive. Student aid offices are exemplars of efficient administration, and the 5 percent administrative figure is entirely consistent with other federal aid programs. But let’s place this criticism in a contemporary context. At a time when billions of dollars cannot be accounted for by the U.S. Provisional Authority in Iraq, a $40 million expenditure, audited and fully accounted for, in university spending clearly passes muster.

On the other hand, the administration’s budget proposal that criticizes institutional distribution under “an outdated statutory formula” is absolutely correct. Miller’s observation that “colleges which enroll 70 percent of low-income students get only 46 percent of the SEOG funds” is a critical indictment of the SEOG program and warrants our support for Congressional correction. The formula that drives distribution under the SEOG program decidedly shortchanges colleges and universities in areas experiencing population growth and, specifically, institutions that have made a commitment to serving the less advantaged. In short, there is a gap between our rhetorical commitments and our funding priorities. Until we address programmatic shortcomings, we will remain at risk to calls for elimination of programs such as SEOG.

One of the underlying criticisms that repeatedly surfaced during deliberations of the Spellings Commission was that of higher education’s unwillingness to adapt to change. We were and are pictured as blindly defending the status quo. The higher education community should take those criticisms to heart and be proactive in effecting change. If we so act and are so perceived, our credibility in important policy discussions would be enhanced in Washington and throughout the nation.