Federal Advisory Panel Pans Recommended Overhaul of State Grant-Aid Programs

May 22, 2012

A report by the Brookings Institution on how to restructure state student-aid grants seemed to generate little controversy when it was released this month. But now a group that advises Congress on student financial-aid matters has released a statement condemning the report as flawed and saying the recommendations would sacrifice too much need-based aid and not significantly improve college-completion rates.

The initial report, "Beyond Need and Merit: Strengthening State Grant Programs," recommended that state student-aid grant programs be consolidated from the nearly 250 in existence into a much smaller number in order to simplify the process of applying for that assistance. Just as important, the report says, state grant programs should not just focus on merit or financial need, but combine those two criteria.

Instead, aid dollars should be awarded largely to students who have financial need but also have a good chance of completing their degrees, the authors recommended.

"For these dollars to make as much difference as possible in the lives of students and in the future of state economies," the report says, "state grant programs must be designed to produce the largest possible return on taxpayers' investment."

To accomplish that goal, the researchers said, state aid should be tied to measures that show a student is progressing in college, such as completing a minimum number of credit hours.

'A Fundamental Tension'

But members of the federal Advisory Committee on Student Financial Assistance disagree. The 11-member panel, appointed by members of Congress and the U.S. secretary of education, was created in 1986 to be an independent, bipartisan source of information on student financial aid for federal policy makers, including elected officials.

On May 18, the advisory committee released an analysis of the Brookings report saying the recommendations would dismantle the federal-state partnership that ties state aid to the federal Pell Grant program for low-income students.

The report's recommendations, the committee went on to say, could have the unintended consequence of reducing or eliminating state aid for the neediest students who have the hardest time meeting benchmarks of degree completion or other measures.

The students most likely to meet those measures would generally be students with less financial need, the committee says in its analysis.

Mark Kantrowitz, publisher of FinAid, a Web site about financial aid, said the disagreement between the report's authors and the advisory committee hits on one of the great dilemmas in financial-aid policy: how to balance efficiency and effectiveness while providing the greatest access.

"There is a fundamental tension between reducing 'waste' and enabling at-risk students to pursue a college education," Mr. Kantrowitz wrote in an e-mail. "It costs more to educate low-income and first-generation college students because their need is greater and they experience greater barriers to successful completion of their education."

Second-Guessing the Faculty

Although state policy makers already set the measures for students to receive both merit- and need-based aid, letting state lawmakers make decisions about measuring academic completion is also troubling to the advisory committee. "State legislatures are not equipped to do the sophisticated data analysis" on how completion measures would affect the access and success of the neediest students, the committee says in its report.

Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, said the issue was whether civil servants or college faculty members should be making decisions about how academic progress should be measured.

"This is an academic issue," Mr. Nassirian said, "and the problem is that the administration of public dollars doesn't automatically qualify civil servants to second-guess the faculty."

Sandy Baum, an independent higher-education-policy analyst and a senior fellow at the George Washington University School of Education and Human Development, is one of the Brookings report's lead authors. She said she was somewhat confused by both the tone and the content of the committee's response.

Nothing in the report recommended severing the federal-state relationship or giving state lawmakers more authority over academic decisions on awarding grant aid, said Ms. Baum, who is a contributor to a Chronicle blog.

On the criticism that their recommendations could result in the neediest students' losing out on grants for higher education, Ms. Baum said that was already a problem with many state grant programs that use standardized-test scores or grade-point averages to determine eligibility. In addition, she said, there is plenty of evidence that giving students and institutions financial incentives to improve on measures of degree completion works.