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State Student Aid, Before the Fall

State Student Aid, Before the Fall
July 20, 2009

You're familiar with the pattern by now: Groups release reports with data and analysis about various aspects of higher education finance, fund raising and other matters, but because they cover a time before the economy crashed late last year, the conclusions carry a big, fat asterisk.

The latest such report comes today from the National Association of State Student Grant and Aid Programs (NASSGAP), in the form of its annual look at how states have distributed financial support to students. The survey examines the 2007-8 fiscal year, which for most states ended in the middle of last year, and includes money that in most cases was allocated by legislatures during their 2007 sessions, when many states were flush.

As a result, the data from 2007-8 present an upbeat picture that is almost certainly not reflective of what most states, colleges and students are feeling now, or will be experiencing going forward, acknowledges Lee Andes, assistant director for financial aid at the State Council for Higher Education in Virginia and president of NASSGAP. "The 2007-8 numbers "demonstrate states' commitment to student grant aid," but they were clearly pre-recession, he said. The current economic crisis, he said, "will test many states’ ability to maintain the affordability of a college education."

The 2007-8 data showed total financial aid awarded by states to students growing by 7.1 percent over 2006-7, to $10.022 billion from $9.347 billion. Need-based grant aid rose at a rate of 5.9 percent, to $5.836 billion, 72.5 percent of all grant aid awarded by the states. That represented a slight upturn in the proportion of all grant aid that states distributed based on need; the comparable proportion was 72.1 percent in 2006-7, suggesting that states are beginning to respond to calls from policy makers and financial aid experts to emphasize financial aid for needy students over that awarded based on academic merit, which has been ascendant for a decade or so.

In another sign of a potential shift, need-based grant aid made up 64.8 percent of the $4.236 billion in undergraduate financial aid that states awarded in 2007-8, up from 63.9 percent in 2006-7.

The NASSGAP report shows several states ramping up their spending on need-based aid, including several that have in recent years focused most of their student aid on merit. Louisiana, for instance, awarded just $1.4 million in need-based aid in 2006-7, but $18 million in 2007-8. That's still far less than the nearly $120 million the state distributed in aid based on merit, but represents a sizable increase. Missouri nearly tripled its spending on need-based aid in 2007-8, to $72 million from $25 million in 2006-7, and Texas continued to ratchet up its hefty spending on need-based aid, which has risen from $66 million a decade ago to $337.5 million in 2005-6, $411 million in 2006-7, and $537.9 million in 2007-8.

As is historically the case, the bulk of the nation’s need-based aid comes from a handful of states. Nine states (California, Illinois, Indiana, New Jersey, New York, North Carolina, Pennsylvania, Texas and Washington) together awarded more than $3.8 billion in undergraduate grant aid based on need, 68 percent of the total.

Total Financial Aid Awarded, By State (in millions)

   2007-8 2006-7
State Need-Based Grant Aid Non-Need-
Based Grant Aid
Nongrant Aid Total Total
Alabama $16.29 $5.19 $0.19 $21.67 $10.29
Alaska 0.67 - 82.308 82.308 78.646
Arizona 12.204 0.019 4.045 16.267 15.226
Arkansas 23.673 13.117 3.451 40.241 36.918
California 813.737 - 39.695 853.432 800.055
Colorado 70.437 9.562 16.131 96.131 85.281
Connecticut 64.197 0.288 62.114 126.6 101.041
Delaware 14.363 3.704 0.815 18.882 15.386
Florida 155.493 385.689 105.232 646.414 595.029
Georgia 1.489 496.178 14.189 511.856 498.997
Hawaii 0.408 - 24.767 25.175 25.175
Idaho 2.897 4.186 1.883 8.967 7.687
Illinois 393.232 24.485 10.222 427.94 454.41
Indiana 213.627 10.049 174.677 398.353 350.551
Iowa 59.116 0.457 6.213 65.786 61.585
Kansas 18.965 0.126 4.732 23.822 20.73
Kentucky 92.254 94.734 5.124 192.112 190.029
Louisiana 18.773 119.969 0.06 138.802 122.074
Maine 17.916 - 3.245 21.161 18.881
Maryland 97.176 5.283 8.268 110.727 107.745
Massachusetts 86.321 0.022 33.528 123.941 117.177
Michigan 94.873 98.398 46.883 240.154 315.472
Minnesota 156.513 0.048 154.351 310.911 313.145
Mississippi 3.193 19.749 8.258 31.2 30.678
Missouri 72.717 37.292 10.966 120.975 71.154
Montana 4.367 - 0.788 5.155 5.521
Nebraska 12.537 - 105.195 117.732 85.335
Nevada 16.491 25.7 15.27 57.461 55.326
New Hampshire 3.729 0.004 0.358 4.091 4.066
New Jersey 263.984 29.902 317.6 611.487 519.013
New Mexico 23.435 46.725 10.33 80.49 89.265
New York 806.832 20.537 96.159 923.528 947.551
North Carolina 229.924 62.563 70.148 362.635 296.404
North Dakota 3.19 0.588 0.67 4.448 2.688
Ohio 191.939 63.169 0.916 256.024 256.501
Oklahoma 65.996 9.946 111.403 187.345 166.434
Oregon 34.698 0.337 38.348 73.384 68.79
Pennsylvania 471.472 0.5 35.107 507.079 504.758
Puerto Rico 37.244 - 0.069 37.313 39.455
Rhode Island 15.336 - - 15.336 13.021
South Carolina 56.126 241.945 0.548 298.619 273.767
South Dakota - 2.416 0.437 2.853 2.618
Tennessee 74.525 209.58 1.527 285.632 236.166
Texas 537.868 - 161.223 699.092 561.885
Utah 9.05 2.627 44.14 55.816 55.208
Vermont 20.834 0.094 0.453 21.381 18.685
Virginia 117.16 80.265 78.541 275.966 255.682
Washington 202.523 3.376 31.785 237.684 214.158
Washington, DC 2.942 30.554   33.496 33.666
West Virginia 34.54 48.047 20.738 103.325 96.62
Wisconsin 99.363 3.17 7.727 110.26 101.511
Wyoming 0.162     0.162 0.163
All States 5,836.806 2,210.593 1,974.896 10,022.294 9,347.623

Source: National Association of State Student Grant and Aid Programs

 

 

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