Friday, July 15, 2011

Mixed News on State Student Aid

Doug Lederman | Insider Higher Ed
July 11, 2011
State spending on financial assistance to students increased by 3.8 percent in 2009-10, even as many governments struggled with recession-driven cuts in many programs. But nearly half of all states cut back on their all-important spending on need-based financial aid, even as enrollments boomed and as many students and families struggled to keep pace with tuitions that public colleges (or their legislatures) raised sharply.

Those are among the key findings of the annual report on state financial aid spending by the National Association of State Student Grant and Aid Programs, released today.

In all, states raised their spending on student financial assistance of various types -- need-based and non-need-based grants, and nongrant aid -- to $10.8 billion in 2009-10, up about 3.8 percent from $10.4 billion in 2008-9.
In a break from recent trends, state spending on aid based purely on students' financial need grew at a faster pace than did other kinds of aid. States spent $6.444 billion on need-based aid in 2009-10, 4.6 percent more than the $6.16 billion they awarded in 2008-9. (Aid awarded at least in part on non-need-based factors grew by 1.2 percent in 2009-10, but over a five-year period, merit-based aid has grown at a 36.7 percent clip, compared to 31.3 percent for need-based aid. The gap widens even more examined over a decade, with states raising their spending on merit-based aid by 162 percent since 1999, compared to 99.8 percent for need-based grants.)
But the 2009-10 growth in need-based aid was uneven, revealing significant differences in how states weathered the first full year of the downturn and how much they prioritized student financial aid as they allocated their constrained funds. Slightly more than half the states bolstered their need-based-grant spending -- with states such as California, New York and Pennsylvania among the 10 that did so in double digit percentages. In some of those states, though, tuition rose much more sharply; California's two public college systems raised their tuitions by more than 30 percent in 2009.
Others, however, responded to the rush of students returning to college in the downturn by curtailing their financial aid awards. Ohio slashed its spending on need-based aid by two-thirds (from $225 million in 2008-9 to $76.3 million in 2009-10), and Michigan cut its in half (as did Alaska, but from very little -- $1.97 million -- to virtually nothing).

State Spending on Student Financial Aid, 2009-10 (in millions)
 [Click to view full table]
Source: National Association of State Student Grant and Aid Programs

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