Less State Grant Aid Going To the Needy, Study Says

In a time when the cost of higher education is pricing some students out of college, state grants and scholarships are increasingly going to wealthier students, according to a report by the Brookings Institute. The report, "Beyond Need and Merit," says 70% of state grant funds were assigned based on financial circumstances, a drop of 20% since 1992-93. This may be because 13 states have established non-need-based grant programs within the last 20 years. Although the percentage of allocated has decreased, states are spending about three times as much on need-based programs than they were 30 years ago, according to the report.

The report also cites 13 states, including West Virginia, Utah, Louisiana, and Georgia, that allocate less than 50% of their aid money based on financial need. For example, 16% of Louisiana’s state grant money was given based on financial circumstances. However, 35% of recipients of the state’s grants in 2009-10 were from families who had incomes of more than $80,000. These students received 45% of the state’s grand budget, according to the report. Georgia assigned none of its grant money based on financial need and 64% of students from the highest quintile of income received an average of $2,900 in 2007-08, while 54% of those from the lowest quintile were given an average of $1,800.

The problem is that low-income students face the greatest barriers to getting an education, and the increasing cost of tuition makes affording school more difficult. To that end, the report says states should move away from merit-based and need-based aid and instead implement simplified programs that reach students with financial need with appropriate expectations for college success. These programs should be easy for the student and his or her family to understand, and they should be designed to encourage success after the student begins their college career.

Although grant programs differ from state to state, the Brookings Institute suggests a clear model for grant allocation. Aid would be handed out based on family income. Students from families who make $20,000 or less would receive $4,000 while those who make more than $55,000 would get $500. The cutoff for aid would be at $60,000. The report says the advantage to this system is it is simple and people will know how much aid they will receive. It also provides the greatest amount of funding for low-income students. However, the Brookings Institute says grant programs should include incentives to motivate students to complete college in a timely manner, and states should aggressively implement innovative pilot programs to see if they’re more effective than the programs already in place.

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