States Increase Aid to Students

States increased need-based grant aid to undergraduate students by 6 percent in the academic year 2011-2012, while total state financial aid to students grew by about 2 percent, according to an annual survey released Monday.

The survey, by the National Association of State Student Grant and Aid Programs, found that the states awarded $11.1 billion in student financial aid in 2011-2012, including loans and other aid, an increase of 1.8 percent from the previous year, adjusted for inflation. 

Frank Ballmann, the association’s director of federal relations, said that despite the fiscal cutbacks in a lackluster economy, states “continue to recognize that it’s important to have more people attending college and graduating from college (because) ultimately, having qualified college graduates attracts employers who need to fill 21st century jobs.”

The survey also found that nongrant student aid, including loans, work study and tuition waivers, dropped almost 4 percent from the previous year.

In 2011-2012, states awarded $4.7 billion to undergraduates through programs based only on financial need; they awarded $3.9 billion through programs with a merit component.

According to the study, South Carolina, Tennessee, Georgia and Washington, D.C., provided the most grant aid per capita while Georgia, South Carolina, Oklahoma, Tennessee and Kentucky provided the most grant awards per student enrolled.

Ballmann noted that Indiana, whose economy has been battered by the Great Recession, was among the states that have increased need-based grants. From the academic years 2010-2011 to 2011-2012, Indiana increased need-based grant aid by 4.8 percent, from $238.8 million to $250.3 million. Over a 10-year period, the state more than doubled aid in the same category.

In the same 10 years, California has nearly tripled the amount of money it gives to students in need-based grants, from $514 million in 2001-2002 to nearly $1.5 billion.

Florida and Georgia both went against the general trend, cutting merit-based aid by a combined $296 million from 2010-2011 to 2011-2012. Without cuts in those two states, merit-based aid nationwide would have increased. Florida cut merit-based aid by 20.9 percent and Georgia by 26.9 percent.

In Florida, lawmakers have made a number of changes to the Florida Bright Futures Scholarship Program, which provides merit-based aid to students, to rein in costs and address concerns that they were too easy to get for merit-based awards.

The changes reduced the amount of money students can receive toward their college expenses while increasing the test scores required to receive the scholarships. In 2011-2012, 174,047 students received aid through the Florida program, with an average award of $1,918, according to the state Department of Education. 

Likewise, Georgia lawmakers made various changes to the merit-based Helping Outstanding Pupils Educationally (HOPE) scholarships and grants, which are funded by the state lottery, to keep costs under control, according to Georgia Student Finance Commission President Tracy Ireland.

“It was rapidly approaching a point in time where we would not be able to keep up with demand,” Ireland said. The program dipped into reserves in 2011 and it was projected the reserves would be depleted in about 2 ½ years. The changes included reducing award amounts and not paying for books and mandatory fees. 

Now, Ireland said, “we’re living within the amount of money that the lottery generates and we’re able to stay within that.”

The state will increase the amount of the awards next year because lottery revenues have increased, she said. 

Georgia gave $747.7 million to 256,398 students in HOPE Scholarships and Grants in 2010-2011. In 2011-2012, the state gave out $461.5 million to 202,864 students.