Stimulus Law Didn’t Protect State Financial Aid

Report: “The Role of State Policy in Promoting College Affordability”

Author: Jennifer A. Delaney, assistant professor of education policy, organization, and leadership at the University of Illinois at Urbana-Champaign

Publication: The Annals of the American Academy of Political and Social Science

Summary: The federal stimulus law of 2009 had a maintenance-of-effort provision that required states to hold steady the amount they appropriated for public colleges. While that measure worked generally to protect money for the institutions, state lawmakers cut student financial aid by about 12 cents for every dollar they received from the stimulus, according to the report.

Bottom Line: The cut in states’ student financial aid was an unintended consequence of the maintenance-of-effort provision, the report concludes. In essence, while the stimulus protected institutions, it may have made college less affordable for some students.

“It is a little bit of a sleight of hand that states maintained what they needed for general appropriations but cut student financial aid when they had severe budget constraints,” said Ms. Delaney in a news release announcing the report.