Watch CBSN Live

How Financial Aid Formulas Rip Off Parents on the Coasts

Is the federal college financial aid formula ripping off families who live in San Francisco, New York, Boston and

Financial aid formula rips off families from citiesother expensive cities?

It sure looks like it. At least that's the conclusion you can easily draw after reading a lengthy report on federal student financial aid that the U.S. Government Accountability Office just released.

Parents hoping for financial aid are penalized if they live in pricey metropolitan areas like Seattle or Los Angeles. That's because the formula doesn't give a hoot about living costs when determining how much parents can afford to spend on their child's college education.

Here's an example of the inequity that I pulled from the report: The median rent for a two-bedroom apartment in San Francisco ($1,679) is 2.5 times as expensive as the same apartment in Cheyenne, WY ($671). But the feds are indifferent to the plight of families who spend $20,148 for rent each year versus $8,052 for parents living in Wyoming's state capitol.

Using a cost-of-living calculation in the student financial aid formula would help urbanites living on both coasts, as well as residents in such cities as Chicago, Portland, OR, and Minneapolis. For instance, parents making $51,000 in San Francisco would see their annual federal Pell Grant jump from $860 to $3,060.

Will the government ever change the college financial aid calculations to make them equitable? I doubt it. I can't see congressmen from areas that benefit from the status quo, including red states and rural America, voting to help out city slickers any time soon.

New York City image by mikeleeorg. CC 2.0.