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Abstract

The Higher Education Act provides that one system for assessing need for aid be used in the Pelt grant program and that another system be used in the other large need-based Title IV student aid programs. Switching from two systems to one would help restore public confidence in the use of need analysis for allocating aid, reduce administrative burdens on schools, reduce award error, and improve equity in aid awards. This paper discusses why there are two systems and investigates simplification to one system by means of extending non-Pelt need analysis to Pell grants. Such simplification appears to be budgetarily feasible and also appears not to produce any major distributional problems or anomalies. In case this simplification approach should prove, on closer inspection, not to be budgetarily feasible, various cost saving reforms in Pelt award rules and in the determination of the allowable cost of attendance are outlined.

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