The multiyear saga of dwindling state budgets has shown no sign of changing course, yet states still awarded about 2.5 percent more financial aid to students in 2010-11 than they did the previous year, according to a report  released today.
The National Association of State Student Grant and Aid Programs annually examines how states have distributed financial aid to students. This year’s report, which looks at the 2010-11 academic year, found that states provided about $11 billion in aid that year, up from $10.8 billion the previous year.
Frank Ballmann, director of federal relations for the association, attributed the increase to an acknowledgment by states that funding student financial aid is crucial to the future of state workers and taxpayers.
“Despite significant budget challenges, states recognize the value of investing in the education of their citizens,” Ballmann said. “I think what it shows is governors and state legislatures, regardless of whether they’re controlled by Republicans or Democrats, are pretty consistently saying that investing in higher education is important.”
The amount states meted out in need-based grants -- $6.5 billion -- increased by 1.5 percent from the previous year, but the proportion of grants that were distributed based on need decreased to 70.8 percent from 72.6 percent in 2009-10. The percentage of merit-based grants increased, and 23 states handed out more merit-based aid than they did the year before. Many financial aid experts have bemoaned the tendency of states and institutions to focus their aid spending on academic and other merit rather than student financial need.
But Ballman said states shouldn’t be criticized for spending more on merit-based aid. “It’s hard to criticize someone for spending more money in terms of grant aid for higher education,” he said, adding that many recipients of merit-based aid also have financial need.
Much of the nation’s need- and merit-based aid was awarded by a handful of states -- many of the same states that topped the list in previous years. Nine states -- California, New York, Georgia, Texas, Florida, Illinois, North Carolina, Pennsylvania and Tennessee -- awarded more than $5.7 billion in grant aid, 62.4 percent of the total.
Many of these states have been experiencing notable budget woes, but Ballmann said he doesn’t expect them to cut back on aid. “I don’t see any reason why a state would change what they’ve been doing for 10 plus years with, I think, some pretty good results,” he said.