Trends in Higher Ed: State need-based financial aid

States invest in need-based financial aid programs to promote access and success for students who might not otherwise be able to afford postsecondary education. Nationally, expenditures in state financial aid programs continue to steadily increase. The annual report of the National Association of State Student Grant and Aid Programs, or NASSGAP, finds that the amount of all undergraduate financial aid that states allocated based on students’ financial need grew by 2.9% from 2015-16 to 2016-17, the latest available data.

 One-year increase
(2015-16 to 2016-17)
Five-year increase
(2010-11 to 2016-17)
Ten-year increase
(2006-07 to 2016-17)
Need-based aid2.9%20.7%52.5%
Non-need-based aid0.7%6.2%21.9%

States allocated a total of just under $11 billion in non-need-based aid in 2016-17, and the proportion that was allocated based on need edged up to 76.6%, from 76% the year before. It was 72.2% in 2006-07. To put it in dollar terms, states allocated $233 million more in need-based grants in 2016-17 than they did the previous year, and just $18 million in additional non-need-based grants.

Utah’s model: HB 260, Access Utah Promise Scholarship (Rep. Derrin Owens)

This legislation, proposed during the 2019 legislative session, would create a last-dollar scholarship patterned after SLCC Promise and Dream Weber that would pay for tuition and fees for the first two years of college for qualifying students when federal grants fall short. Returning adults with less than an associate degree can apply, and there is a workforce component utilizing company tuition waivers as first-dollar in. The Board of Regents is committed to making college affordable and accessible for all Utahns, which is why it is supporting Rep. Derrin Owens’ HB 260.

This legislation complements the other top priority of the Board of Regents: placing a college access advisor in every high school in Utah. The near-peer college access advisor will help students register for and complete college entrance exams, submit college applications, apply for scholarships and financial aid, and connect them to first year experience programs to ensure a smooth transition from high school to college.

This statewide college access advising program will be an expansion of the Utah College Advising Corps, which has been operated by the University of Utah since 2007. Under the current program, 12 schools in Utah have a full-time advisor. The Utah College Advising Corps model is proven to improve college enrollment and college graduation rates:

  • Only 49% of Utah high school graduates make it to college immediately after high school. Students in the 12 schools with college access advisors enrolled at a rate of 58%.
  • For every meeting with a college access advisor, students are 13% more likely to enroll in college.
  • For every meeting with a college access advisor, students are 5% more likely to graduate from college.

The approved proposal is to scale the program statewide, under the direction of the Board of Regents, into every high school in Utah by the school year 2021-2022. Anticipated costs of the program are approximately $7 million, with $5,995,000 coming from state tax funds and the remainder found in internal reallocations from the Office of the Commissioner of Higher Education. The Board will prioritized the $5,995,000 as part of the approved unified budget request in preparation for the 2019 legislative session.

Examples of other state models: Tennessee, New York, and Michigan

The Tennessee Promise program, for instance, has become a widely-replicated model for “free tuition” programs. Tennessee increased its spending on need-based financial aid by $10 million in 2016-17, while its spending on non-need-based aid remained flat. The increase can be attributed largely to the resonance of the Promise program’s “cleaner” message about college affordability and the requirement that prospective college students fill out the Free Application for Federal Student Aid (FAFSA), which has significantly raised the proportion of Tennessee’s high school graduates who do so, from 55% to more than 80%.

Started in fall 2017, the New York Excelsior Scholarship allows more than 940,000 middle-class families and individuals making up to $125,000 per year to qualify to attend college tuition-free at all City University of New York and State University of New York two- and four-year colleges in New York State. The new program will be phased in over three years. In order to apply, students must:

  • Be residents of New York State
  • Attend a SUNY or CUNY two- or four-year degree program
  • Take 30 credits per calendar year (including January and Summer sessions)
  • Plan to live and work in New York following graduation for the length of time they participate in the scholarship program

Recently, Michigan has proposed a plan to make community college tuition-free for all Michigan high school students. Michigan Gov. Gretchen Whitmer proposed this plan in pursuit of her goal of having 60% of all Michigan residents with some sort of postsecondary degree or credential. Michigan currently is around 45%. The plan would be enacted in fall 2021, pending legislative funding.