Once upon a time, a student in need of financial aid who applied to colleges and universities could be reasonably confident that a need-based aid package would be offered. He or she would receive an amount that would bridge the gap between tuition fees and family finances. Not any longer, unfortunately. These days, students can no longer count on having their documented financial needs met by public colleges and universities.
It’s Not Just One State
Before anyone thinks that this problem is limited to a single state or region of the country, it isn’t. You should know that even states that are typically thought of as generous with school aid packages, like California and Texas, are putting the brakes on students’ financial aid options. Not only are programs being changed; funding is also being weakened and there is simply not enough money to fill every student’s demonstrated financial need.
Changes to Publicly-Funded Awards
For example, in California, the income-based Middle Class Scholarship program is being phased out over several years. Elimination of this program is projected to save the state $115 million. In another example, the maximum CalState award for the 2016-2017 school year was $1644 for undergraduates; however, the typical award actually given was only $800.
There appears to be several factors at work here. Some of restrictions on financial aid funding are rooted in fear of the next financial bust. The recent Great Recession is still fresh in many state legislators’ and public school administrators’ minds. There’s also a tug-of-war between funding need-based programs versus merit-based programs. For example, Louisiana’s TOPS program is merit-based; however many of the students who benefit are from higher income families.
In Mississippi this year, the state government worked to limit students to one award from one state-funded undergraduate financial aid program. If multiple awards are won by a student, he or she receives only one. This is expected to be the award with the largest sum. This change is expected to save the state up to $2 million. Another significant change to come is that GPA checks by colleges and universities for students to retain grant funding are now to be done on a semester basis instead of an annual basis. This could cut off aid for students who aren’t performing well academically as soon as they begin to have trouble.
Students and Families Face Tough Decisions
State-level economic conditions, priorities, and even politics, make these equations play out differently in every state and for every family. Family resources haven’t kept pace with the rapidly increasing higher education costs. However, college remains so important to most families because higher ed plays such a big role in students’ ability to gain high-paying jobs.
What might have seemed like a circle may begin to feel like a spiral because state funding of higher education has not increased to pre-Great Recession levels yet, and might not ever. An upcoming study suggests that for every $1,000/student decline in state funding of higher ed, there’s an increase of $257/student costs. And many schools are no longer helping families meet those increased costs.
Public Schools Cutting Need-Based Aid
Public universities are running low on funds and are no longer filling need-based aid with grants. States are slashing their education budgets, and this has a variety of effects. Cutting need-based aid is one of many ways that schools balance these budget cuts while still trying to fulfill their missions.
In Florida, budget cuts to community colleges are expected to help free up more funding for public universities, which may be hoping to draw more “elite” students. Florida legislators voted to cut $25 million to 28 community colleges while giving $232 million to 12 public universities for the 2017-2018 school year.
Meanwhile, in Texas, state funding for higher ed is up 1.6%, a far cry from the massive budget cuts that loomed earlier this year. Yet, Texans can expect to see roughly 2% spending cuts at public universities for 2017-2018 school year. It’s important to note that even while Texas schools are getting more money than they did last year, the effect was ultimately a reduction in funding. This is because the small increase didn’t match growing enrollment numbers and ordinary increases in expenses.
Money Given Based on Merit, Not Need
At some public colleges and universities, money is being reserved only to attract the higher achieving students with merit aid. Schools are phasing out need-based aid programs in favor of those who can afford full-tuition cost.
Recently, California stopped all need-based aid to out-of-state students. It’s hard to underestimate the potential effects of this change. Schools may accept more out-of-state students who can withstand the full tuition costs. In other states, there’s a change in emphasis toward merit-based aid to out-of-state students in some schools, such those with a GPA in the upper range.
These changes can have a significant impact on the makeup of a student body. According to UCLA Professor Ozan Jaquette’s research, the ratio of in-state vs out-of-state freshman at two dozen flagship public universities is about 60/40 or less. At more than ten schools studied, there were more out-of-state than in-state freshman students.
How To Make These Changes Work For You
What can you do? Play the supply and demand card. If public colleges and universities are actively seeking out-of-state students, make yourself as an out-of-state student more desirable. Always include private colleges and universities in your college search. Or consider schools in those states that are trying to attract more students from Illinois, for example.
Think strategically about schools and their funding, and how that factors into admissions decisions. Use that knowledge to make educated guesses about which schools might provide the best financial aid packages to those applicants they want most. That may mean considering schools that weren’t originally on a list of contenders. It may also mean that a student gets awarded a better financial aid package from a private school than anything a public school could do. Keep an open mind.
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