Boost for Need-Based Aid

States last year kept their spending on student aid roughly the same -- but they invested more heavily in grant programs based on financial need rather than merit. 

September 15, 2014
 

States last year doled out roughly the same amount of student aid money in 2012-13 as they did the previous year, but they increased the share of money flowing to students based on financial need, according to a new survey published Monday.

The annual survey, conducted by the National Association of State Student Grant and Aid Programs, found that although the top-line number of state aid -- $11.28 billion -- actually declined just slightly from the previous year when adjusting for inflation, states collectively boosted their investment in need-based grant aid.

States increased their spending on need-based grant aid by 3.5 percent in the 2012-13 academic year, while non-need-based grant aid declined by 2.1 percent. In inflation-adjusted dollars, states reduced their spending on aid with a merit component to $3.98 billion last year from $4.02 billion the previous year. (An earlier version of this paragraph incorrectly said spending on grants with a merit component was in the millions; in fact, states spend billions on such aid.)

Among the states that saw increases in spending on need-based grant aid were Arizona (35.1 percent), Washington (18.3 percent increase), North Carolina (24.1 percent), and Minnesota (12.7 percent). 

The amount of need-based grants that states funded per each full-time equivalent student increased by 5.7 percent, from $482 in 2011-12 to $509 last year. Sixteen states also increased the maximum amount a student can receive in their need-based grant program.

Of all grant aid awarded by states last year, a full three-quarters of the aid was awarded to students on the basis of need, which is the highest rate in at least the past five years, the survey found. 

"There is recognition in some states that non-need-based aid can be somewhat inefficient because you're providing dollars to people who are going to go to college anyway," said Frank Ballmann, who directs the Washington office for the association. But, he added, "we take the view that any investment in state student grant aid is better than no investment."

Ballmann also said that his group's survey shows that "while at the federal level, there may be a lot of partisan debate over higher education, at the state level there is bipartisan support for need-based grant aid programs."

He pointed to the fact that of the eight states providing the majority of the nation's need-based aid, four are led by Republican governors and four by Democrats. 

In Washington, meanwhile, the Obama administration has touted the increase in Pell Grant funding in its first term as one of its crowning higher education achievements. In contrast, House Republicans have proposed reductions to the program, arguing in their most recent budget that the grants had become "more generous than the federal budget could afford."

Total Grant Aid Awarded, 2012-13 (in millions)

State Need-based
Grant Aid
Nonneed-
based Grant Aid
Nongrant
Aid
Total
         
Alabama  $6.937 $2.599  -    $9.536
Alaska 3.945 5.655 7.310 16.911
Arizona 21.436 -   0.277  21.713
Arkansas  9.396 146.146  2.926 158.468
California 1,519.221 1.989 23.931 1,545.141
Colorado 74.722 0.365 30.388  105.475
Connecticut 45.486 0.339 92.801  138.626
Delaware 13.951 6.975 0.956  21.882
Florida 153.371  320.143  76.498 550.012
Georgia -    535.992 2.530 538.521
Hawaii 3.225 -   0.563 3.788
Idaho 1.101 4.227 1.374 6.701
Illinois 370.909 1.049 7.659 379.617
Indiana 252.595 6.913 25.931  285.438
Iowa 57.610 5.189  0.958 63.756
Kansas 17.817 0.081 3.900 21.797
Kentucky 87.192 108.265 2.617 198.074
Louisiana 26.163 191.905 0.040 218.108
Maine 16.407 -    1.872 18.279
Maryland 88.514 5.084  5.795 99.393
Mass. 85.547 7.296 44.512 137.355
Michigan 91.701 0.973 0.104 92.778
Minnesota 169.452  0.884 83.184 253.520
Mississippi  5.618  19.226 7.857 32.701
Missouri 63.616  40.646 -   104.262
Montana  4.162 1.350 0.863 6.375
Nebraska 15.999 -   109.863 125.862
Nevada 36.269 23.053 18.887 78.210
New Hampshire -   -   -   -  
New Jersey 365.932 10.112 185.569 561.612
New Mexico 25.433 81.125 9.895  116.453
New York 941.292 31.723 65.693  1,038.708
North Carolina 332.852 8.371 73.514 414.738
N. Dakota 10.905 7.102 1.634 19.641
Ohio 86.048 35.351 0.666 122.065
Oklahoma 83.347 11.102 180.745 275.194
Oregon 52.134 0.032 87.475 139.641
Pa. 450.897 0.365 26.341 477.603
Puerto Rico 36.612 -   0.048 36.660
Rhode Island 12.406 -   -   12.406
SC CHE 23.377 293.715 1.937 319.029
SC TGC 36.126 -   -   36.126
S. Dakota -   4.336 0.548 4.884
Tennessee 89.524 284.092 1.579 375.195
Texas 703.389 -   166.096 869.485
Utah 3.484 6.240 80.539 90.262
Vermont 20.117 0.080 0.394 20.592
Virginia 157.940 81.723 191.747 431.411
Washington 343.851 1.832 17.835 363.518
Wash., D.C. 1.177 32.959 -   34.136
W. Virginia 45.267 61.006 40.642 146.915
Wisconsin 120.834 2.993 7.036 130.863
Wyoming 15.470 -   -   15.470
         
Total  $7,200.774 $2,390.602  $1,693.530  $11,284.906

 

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