Student Loan Blog : state funding

UC System Considers “Free” Tuition for Lower-Income Families

Student Loan Girl — Tue, 27 Jan 2009 23:02:00 GMT

The University of California is considering a program which would offer certain students free tuition, reports The Chronicle of Higher Education (“U. of California to Consider Covering Tuition for Families Below State’s Median Income,” Jan. 22, 2009).

As part of a series of measures intended to “broaden the reach of the university during the recession,” the university would cover the tuition and fees at any of its nine college campuses for an estimated 50,000 qualified students whose families have incomes below the state’s $60,000 median household income level.

The proposed tuition plan, known as the Blue and Gold Opportunity Plan, is intended to encourage more low and middle-income students to attend a UC school, at a time when tuition costs are rising and state funding for colleges has been significantly reduced.

Estimated to cost the school $3 million a year, the plan will likely be funded from tuition increases, as well as from existing state, federal and institutional aid, said university system president Mark Yudof. The University of California’s Board of Regents must first approve the proposal, a process that The Chronicle of Higher Education reports could take several months.

It’s possible that the regents could vote to raise undergraduate tuition by as much as 10 percent, the Chronicle suggests, at the same time that regents approve the “free tuition” plan.

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Colleges and Students Could Benefit From Pending Federal Bailout

Student Loan Girl — Wed, 21 Jan 2009 23:37:00 GMT

It seems that everyone is getting a piece of the government’s “bailout pie,” including banks, automakers, and perhaps even the nation’s colleges and universities, although exactly how much schools will get and when they will get it has not yet been established, reports Inside Higher Ed (“Manna From Heaven (er, Washington),” Jan. 16, 2009).

While provisions of an $825 billion stimulus package bill drafted by House Democrats earlier this week could change significantly before the bill is ratified by both houses of Congress — the Senate is reportedly in the process of writing its own version of the bill — a rough estimate by Inside Higher Education suggests that colleges and their students could end up benefiting to the tune of tens of billions of dollars in several areas:

Student Aid: $30 billion Nearly $15.6 billion would be used to increase Pell Grant awards by $500 per recipient to $5,350, a move that would help about 800,000 students in the 2009–10 school year and would wipe out the $1.4 billion shortfall projected for next year’s Pell Grant program budget. Some $12.5 billion of the bill would be used to increase the limit on federal unsubsidized student loans by $2,000 and to replace the HOPE Tax Credit with a restructured tax credit worth up to $2,500 to benefit low-income families.
College Grants: $4 billion Community colleges and for-profit schools could receive as much as $4 billion in the form of grants for adult education programs, so that these students may be able to receive career-related or job-education training. Some funds could also be allocated to states in the form of bonds that local governments could use to create “recovery zones” to help those individuals who reside in areas suffering from high unemployment or foreclosure rates.
College Infrastructure: $8.7 billion About $6 billion would be used for “higher education modernization, renovation and repair” and would be distributed to states based on the number of full-time undergraduates attending state institutions. Some $2.7 billion would be allocated to renovate, update, and modernize biomedical research facilities and upgrade equipment, with funding priority given to colleges that “serve high numbers of minority students” or “institutions impacted by a major disaster.”
State Aid: $39 billion A portion of this estimated $39 billion would be given to state governments “to help restore cuts to critical education programs,” including those in higher education. Some of these funds may be used to “restore state support for postsecondary education to the fiscal year 2008 level.”
Academic Research: $8 billion Some $2 billion would be allocated for research on energy efficiency and renewable energy along with $1.9 billion allocated for basic energy studies. An additional $2 billion would go to the National Science Foundation, $1.5 billion would be used by the National Institutes of Health for biomedical research, and $400 million to be used by NASA for climate-change research.

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States Increase Financial Aid Funding for Student Loans and Grants

Student Loan Girl — Mon, 23 Jun 2008 21:29:00 GMT

State spending on financial aid for undergraduates increased 6 percent or by a total of $9.3 billion in 2006-07 academic year, after growth slowed to 3.4 percent during the 2005–06 academic year, according to a recent report by the National Association of State Student Grant and Aid Programs.

States spent the majority of their financial-aid funds, or $5.29 billion, on need-based grants and student loans for undergraduates this year.

However, state spending on non-need-based aid for undergraduate students has eclipsed the amount of money states have devoted to need-based aid over the past decade, increasing 5.6 percent during 2006–07 to $2.08 billion, The Chronicle of Higher Education reports (“States Spend More on Student Aid,” June 27, 2008).

Funding for student loans received the biggest jump in state spending this year, by nearly 29 percent or $653 million, following a 17-percent increase in spending between the 2004–05 and 2005–06 academic years, according to NASSGAP data.

The report listed South Carolina, Indiana, Georgia, Kentucky, and West Virginia as the top spenders in grant-aid, per capita, for their 18-to-24-year-old population in the 2006-07 academic year.

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