In Time of Need, Less Sharing?

NEBHE publishes new Policy Snapshot: State Student Grant Aid in New England
In the 2010-11 academic year, New England states appropriated more than $181 million for state grant aid—collectively about 15% more than they did in 2006-07. Each state’s aid performance varied dramatically during this time, with Connecticut awarding 51% more grant aid ($21.5million) and New Hampshire awarding 20% less grant aid ($0.8million) in 2010-11 than in 2006-07.

Last week, the New England Board of Higher Education (NEBHE) published a new Policy Snapshot: State Student Grant Aid in New England.

Among other things, the brief notes that state student aid programs typically limit eligibility to state residents who study within the awarding state’s borders. In 2010-11, however, all six New England states allowed a portion of their state student grant aid to travel with residents when they attended a postsecondary institution in another New England state. Such “portability” and “reciprocity” agreements have always piqued NEBHE’s interest, but especially in this time of high college prices and limited student aid funding.

Some background

College undergraduates will receive about $185 billion in student aid in 2011-12, according to the College Board’s pricing report. That aid breaks down as 38% federal loans; 26% federal grants: 18%  institutional grant aid; and 5% state grant aid.

In 2011-12, average published tuition and mandatory fees ranged nationally from $2,963 for state residents at public two-year institutions to $28,500 for students attending private, nonprofit four-year institutions. These figures exclude fees that aren’t applicable to the entire student body, such as healthcare-related fees and laboratory fees.

Across institution types—two- and four-year, public and private—average tuition and fees are rising. In New England, historically the nation’s most expensive region for a postsecondary education, the story is no different. Between 2006-07 and 2011-12, each New England state increased tuition and fees at public four-year campuses by at least 29% for state residents and out-of-state students.

Tuition and fees at public, two-year institutions during the same five-year period also increased—by 31% for state residents and 21% for out-of state students. This represents increases averaging $1,017 for state residents and $1,776 for out-of-state students.

On the other hand, between 2006-07 and 2011-12, the average amount of student aid per full-time undergraduate increased through grant aid from the federal government, states and the institutions themselves, as well as through federal education loans, tax credits and deductions. (Some critics contend that increasing aid actually serves to increase prices, rather than encouraging colleges to hold down costs.)

Of the total $97.1 billion in undergraduate grant aid in 2010-11—aid that doesn’t require a student to work while enrolled or pay back funds—49% came from the federal government, 34% came from institutions, and 10% came from states. Although a third of grant aid came from institutions themselves, not every institution has grant aid funds available. A significant portion of grant aid is available only to students enrolling in high-resourced institutions. Federal and state grant aid programs, on the other hand, reach a wider and more diverse student body.

The largest federal grant program, the Pell Grant for lower-income students, has grown over time as more and more students have become eligible for this need-based financial aid. Yet the federal government spent $2.2 billion less on Pell Grants in the most recent fiscal year (which ended on July 1) compared to the previous year, according to newly released preliminary data from the U.S. Department of Education.

In New England, the number of Pell Grant recipients attending public two- and four- institutions increased 77% between 2006-07 and 2010-11, from 98,801 to 175,704. Total Pell Grant dollars flowing to New England public institutions grew 173% from $222 million to slightly over $606 million.

State grant aid in New England

During this four-year period, New England states also increased the amount of state grant aid awarded to students, albeit by a smaller percentage than the increases in published tuition and fees and number of Pell Grant recipients. In the 2010-11 academic year, New England states collectively awarded 15% ($26.8 million) more to students than in 2006-07. Figure 1 below shows that each state’s grant status varied dramatically during this time, with Connecticut awarding 51% more grant aid ($21.5million) and New Hampshire awarding 20% less grant aid ($0.8 million) in 2010-11 than in 2006-07.

As states continue a slow recovery after the Great Recession, changes to state grant aid programs continue. Figure 2 below compares estimates of FY12 state grant aid appropriations based on state budget and/or state agency documents with appropriations listed in comparable FY11 documents. When possible, tuition waivers (for foster care students, children of veterans, National Guard members, etc) and forgivable loan programs are excluded.

Similar to the years during the recession (officially 2007-2009, though still ongoing in many ways), changes in state appropriations for student aid programs fluctuated across states between FY11 and FY12. In New Hampshire, state grant aid programs were eliminated entirely. Regionally, the total amount of state grant aid funds from state appropriations declined, potentially reversing the past trend of increasing availability of grant aid funds to students.

In New England, generally unlike in other parts of the country, changes to a state’s grant aid funds affect more than one state. According to the National Association of Student State Grant & Aid Programs (NASSGAP), only 14 states nationally granted state aid monies to students attending an out-of-state postsecondary institution in 2010-11.

State grant funds that allow students to carry their state grant aid award to an out-of-state institution are often referred to as portable grants. In some states, such as Rhode Island and Vermont, state grant awards are portable to any accredited U.S. postsecondary institution in any U.S. state or territory. Other states use reciprocity agreements to determine whether a student grant recipient may use the award at institutions in specific states. New England states with reciprocity agreements included Connecticut, Maine, Massachusetts and New Hampshire in academic year 2010-11. So between this two phenomena, all six New England states granted some form of state grant aid to resident students attending an out-of-state institution in the New England region and possibly elsewhere.

The recent declines in total state grant aid availability in some New England states also affects the portability of state grand aid. In New Hampshire, for example, the elimination of state appropriations for student aid led to the elimination of all state grant aid programs. Although some New England states continued to honor the portability of state grants for their own state residents attending New Hampshire institutions, others removed New Hampshire from the list of states eligible to receive their state’s grant funds. Though the New England states are compact and generally collaborative, a difficult economy tempts them to become selfish about their own skilled workforce development.

In a time of continuous economic challenges for families and states, cutting state grant programs is a short-term solution that negatively affects state residents and the ability of postsecondary institutions to keep talented New Englanders in the region. Rather than cutting programs, we should share novel ideas for financial aid programs across the region and find ways to preserve reciprocity agreements.


Comments are closed.