College & Workforce Readiness

LEAP Gives States’ Need-Based-Aid Programs Key Boost

By Julie Blair — May 26, 1999 5 min read
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At a time when state policymakers increasingly are embracing merit-based financial-aid programs for college, a small federal program continues to provide insurance that states won’t forget poor students.

The Leveraging Educational Assistance Partnership, or LEAP, program has provided federal funds for nearly three decades to states that agree to match the money and apply it to need-based financial aid. It kick-started programs for poor students in 28 states and continues to play a crucial role in several states’ need-based-aid programs.

Now, President Clinton--who had called for eliminating funding for the program in his three previous budget plans--has requested $25 million for LEAP in fiscal 2000. That would keep the program at its current funding and allow it to continue serving some 83,000 students in 50 states.

But some in higher education fear that LEAP is an endangered species. Despite renewed support from politicians in both major parties, shrinking allocations from Congress worry experts who say the federal dollars provided won’t be enough to persuade state legislatures to put up the matching funds.

LEAP “has been tremendous,” Sen. Jack Reed, D-R.I., a longtime supporter of the program, said in an interview. “It is the first program that encouraged states to put away their own money to assist low-income students. I don’t think states would stay on course without it.”

Reinvigorated Program

In 1972, when LEAP began as the State Student Incentive Grant Program, or SSIG, state officials didn’t pay much attention to need-based financial aid.

Only 22 states, in fact, had programs that took students’ family incomes into account. Poor students received college aid from the federal government or through their universities. With the advent of SSIG, however, all 50 states began to match federal funds, creating a web of need-based aid at the state as well as federal level.

By the early 1980s, funding for the program reached its peak--about $77 million dollars, the Department of Education reports. By the late 1990s, President Clinton maintained that LEAP had served its purpose, and he zeroed it out of his budget requests for fiscal 1997, 1998, and 1999. Though Congress continued to fund the program, it had reduced its appropriation to $50 million by fiscal 1997.

A reinvention of the program by Congress during the reauthorization of the Higher Education Act last year, however, put it back on Mr. Clinton’s agenda. Congress upped the ante for states, requiring them to come up with two dollars for every one federal dollar should the federal funds allocated exceed $30 million. It was then that the program was renamed LEAP.

Jamie K. Pueschel, the legislative director of the United States Student Association, said her group is pleased about the president’s request for $25 million for LEAP in the fiscal year starting Oct. 1. “We’re pretty excited to see that, considering it could have been zero,” she said.

Still, Ms. Pueschel said most in the higher education community would like to see Congress grant LEAP at least $50 million to give states solid incentives to participate. Ideally, she said, next year’s appropriation would be $75 million.

“What [critics of the program] don’t understand is that every one of those dollars is being matched by a much larger amount of money,” said Ron Gambill, the executive director of the Tennessee Student Assistance Corp. and the president of the National Association of State Student Grant and Aid Programs. The "$75 million would generate $200 million minimally,” he said.

While 82 percent of all state financial aid is spent on need-based aid, state spending on such aid grew by only 8 percent between the 1996-97 and the 1997-98 academic years, according to a report released last month by the association of state student-aid programs, known as nassgap. In comparison, state merit-based aid jumped 24 percent. (“States Gave More Aid for Higher Education Last Year, Report Says,” May 12, 1999.)

“There are an awful lot of low-income students who may or may not meet merit requirements but who can succeed in college,” said Pat Callen, the president of the National Center for Public Policy and Higher Education in San Jose, Calif. “Student financial aid has ... historically equalized economic opportunity so that people from low-income or moderate-income families have the same chance. It seems we’re moving away from that.”

Funding Foundation

Peggy Sledge, the director of state student financial aid for Mississippi, said she can’t imagine what needy students in her state would do without LEAP.

While Mississippi committed $19 million to merit-based financial aid during 1997-98, LEAP is the sole need-based aid program in the state, Ms. Sledge said. Forty percent of the money for the program--nearly $200,000--comes from the federal government. The state matched the grant with $800,000 during 1997-98.

LEAP funding helped 1,600 Mississippi students attend college that year, Ms. Sledge said. “If they don’t receive [LEAP] money, where are they going to get those funds?” she said.

While states could opt to fund need-based aid programs, most seem mainly interested in merit-based aid programs, Mr. Gambill said.

The NASSGAP report shows that Alabama, Alaska, Arizona, the District of Columbia, Hawaii, Mississippi, Montana, and Wyoming rely heavily on the federal funds to provide need-based financial-aid programs. NASSGAP officials worry that without the federal funds, the states would end need-based financial aid altogether.

LEAP funding “mainly helps us keep our legislature focused on grant programs for needy students,” said Arlene Hannawalt, the director of the Montana Guaranteed Student Loan Program. The matching funds allocated to the program “could just as easily have gone to prisons.”

During the 1997-98 school year, Montana received 31 percent of its need-based aid from the federal government--about $70,000, Ms. Hannawalt said. The state matched that money with nearly $700,000 to help about 800 students.

Though the state does have two other state need-based aid programs, LEAP “is critical and makes the difference between going and not going to college” for many poor students, Ms. Hannawalt said.

A version of this article appeared in the June 09, 1999 edition of Education Week as LEAP Gives States’ Need-Based-Aid Programs Key Boost


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