Despite severe budget pressure, state financial aid to college students rose modestly in the 2010-11 academic year.
States delivered about $11-billion in grants, work-study awards, and loans, an increase of about 2.5 percent from the previous year, according to a report released on Monday by the National Association of State Student Grant and Aid Programs. Most state aid comes in the form of grants to undergraduates, which jumped by more than 4 percent. But other forms of aid, such as loans, tuition waivers, and work study, fell by almost 5 percent.
“I think that’s a pretty impressive increase, given the challenges that many of the states face with their budgets,” said Frank X. Ballmann, director of federal relations at the student-aid association, of the rise in state financial aid. “Almost every state is out there trying to ensure that the most-deserving students are able to attend college regardless of economic conditions.”
The report also shows that public, in-state universities are receiving a greater share of the aid provided by the states. In 2010-11, almost 72 percent of grants went to public universities, up from less than 65 percent in 2006-7.
Despite the overall increase in aid—which was buoyed by California’s $229-million increase in spending—22 states spent less on student aid than in the previous year. And at least in some states, the data used in the report were collected before painful cuts were made. New Hampshire, for example, eliminated state financial aid for its residents last year.
The report also shows Texas’ spending on financial aid rising to more than $733-million, from some $651-million the previous year. But Dominic M. Chavez, a spokesman for the Texas Higher Education Coordinating Board, noted that the data do not capture the Legislature’s 2011 vote to cut funds for Texas grants, the state’s largest need-based-aid program, by 10 percent.
“A future study will show our investment has declined,” he said. “This creates a multidimensional challenge: reduced funding in the face of increased costs and a higher number of needy students.”
Public Universities Gain
Proprietary universities have made headlines and drawn Congressional scrutiny for their sizable profits bankrolled largely by taxpayers. But the report shows that the for-profit institutions’ share of state grants fell from 3.8 percent in the 2006-7 academic year to 3.5 percent in the most recent report.
Public institutions, meanwhile, claimed a greater share of state dollars. In California, the state provided public universities with more than $946-million to hand out to students in need-based grants in 2010-11, up from about $768-million the previous academic year.
Rising tuition explains that jump, said Judith E. Heiman, a principal analyst for higher education at the state Legislative Analyst’s Office. Cal Grants, the state’s primary means of distributing student aid, are calibrated to increase at the same rate as tuition at California’s public universities, offsetting the costs for needy students.
“There’s been some increase in the number of awards, but that’s dwarfed by the increase in the size of the awards,” Ms. Heiman said. “This is a way that our state financial-aid program has protected eligible students from the additional burden of tuition increases.”
The scales will continue to tip in favor of public universities in California if Gov. Jerry Brown, a Democrat, has his way. His 2012-13 budget proposes capping Cal Grant awards at $4,000 for students at for-profit colleges, a cut of nearly 60 percent from the maximum that those students are now eligible to receive.
Public universities in Texas also claimed a greater portion of the state’s need-based grants, rising from over $546-million in the 2009-2010 academic year to almost $630-million in the most recent report.
“We’ve got a track record in Texas of investing in aid to students at both public and private universities to the extent that we can,” Mr. Chavez said. “But I think there’s a general sense that if I’ve got one more dollar to spend, let’s spend it on a student at a public university.”
