Financial aid directors around Washtenaw County say students with financial need are the winners following changes to student aid that President Barack Obama signed into law.

The Health Care and Education Reconciliation Act of 2010 promises an additional $36 billion for the need-based federal Pell Grant program. That means maximum Pell awards will be set at $5,550 per year in the fall, and are scheduled to increase to $5,975 by 2017.

But a University of Michigan professor warned that, despite the legislation, there's no guarantee the maximum Pell awards will be sustained in federal budgets set each year.

At Washtenaw Community College, a Pell Grant can go a long way, covering tuition for a full load of classes and books, with the remainder applied toward living expenses, financial aid director Lori Trapp said. About 20 percent of WCC students received the grants in 2008-2009.

"With all the students we are seeing either coming to WCC for the first time, or who are returning back to college, such as the displaced workers who have lost their jobs, Pell is the foundation of many financial aid packages," Trapp said.

Cynthia Van Pelt, the financial aid director at Eastern Michigan University, agreed. A total of 32 percent of undergraduates at EMU qualify for Pell Grants.

"Any time they put more funding into one of our grant programs, it's good for our students," Van Pelt said. "We have many more needy student with so many folks out of work, and we're just happy to be able to see some kind of increase in grant funding for our students."

Edward St. John, a higher education professor with the U-M Center for the Study of Higher and Postsecondary Education, warned the promise of a maximum Pell is rarely met come budget time each year.

"The federal government has not funded the maximum since 1978," said St. John, who wrote Refinancing the College Dream, published in 2006. "It's great to have a maximum, but it's a paper number until the federal budget is approved each year with that maximum."

"As you raise maximums, you not only give to the poorest, you also give something to the people in the middle," St. John said. "It makes the program more costly to taxpayers."

That's why conservative legislators don't vote for entire maximum when it's time to pass the budget, he said.

In addition to attempting to set Pell maximums, the legislation also cuts the Federal Family Education Loan Program, which provides private bank-based federal student loans. Instead, all institutions have to switch to the government-run Direct Loan Program by July 1. EMU and U-M already use the Direct Loan Program; WCC will have to make the switch.

U-M helped to develop the Direct Loan Program more than 15 years ago and has been using it since then, Margaret Rodriguez, senior associate director with the the U-M Office of Financial Aid, said in a written statement.

Cutting banks out of student lending will save the government roughly $61 billion, which will be applied to Pell and other education initiatives, according to the American Council on Education.

Not everyone is satisfied with the changes to student aid, which were approved March 25 by a vote of 56-43 in the Senate and a vote of 220-207 in the House. It was signed into law by Obama Tuesday.

In a statement, Republicans from the House Committee on Education and Labor characterized the elimination of FFEL as government takeover that will drive public debt, eliminate jobs and save less than claimed. Schools not already on the Direct Loan Program, like WCC, will have to pay for transition costs to switch to Direct Loans, according to the statement.

Trapp characterized the cost to make the switch as "little to none." Students probably won't notice the difference to lending, she said.

For a full summary of the changes approved this week, read the HR4872 Summary.

Juliana Keeping covers higher education for AnnArbor.com. Reach her at julianakeeping@annarbor.com or 734-623-2528. Follow Juliana Keeping on Twitter