College & Workforce Readiness

States Gave More Aid for Higher Education Last Year, Report Says

By Julie Blair — May 12, 1999 3 min read

State governments collectively raised financial aid for college students by nearly 10 percent last school year, according to the National Association of State Student Grant and Aid Programs.

States spent $3.4 billion on need-based and non-need-based grants for undergraduate and graduate students in 1997-98, up from $3.1 billion in 1996-97, the group says in a report released this month. Ninety-eight percent of the aid was awarded to undergraduates; 2 percent went to graduate students.

While funding for need-based undergraduate aid increased by 8 percent, money spent on non-need-based aid jumped 24 percent, the report states. The majority of all non-need-based funds are merit aid, money awarded to students who achieve academically or excel in athletics.

For More Information

The National Association of State Student Grant and Aid Programs’ report, “State-Funded Scholarship/Grant Programs for Students to Attend Postsecondary Education Institutions,” is available for $20 by calling (518) 474-3471.

“Overall, we’re pleased to see that need-based aid did go up,” said Ron Gambill, the president of NASSGAP and the executive director of the Tennessee Student Assistance Corp. “There is always a concern that we make sure we take care of the needy students.”

Most aid continued to be awarded on the basis of financial need, although the percentage dropped from 84 percent to 82 percent of the total.

Seven states--Alabama, Florida, Georgia, Louisiana, Montana, New Mexico, and North Carolina--allocated more money for non-need-based aid than for need-based aid.

Georgia, for example, spent $208 million on non-need-based programs through its HOPE Scholarship program and only $1 million on need-based aid, the report shows. Florida allocated nearly $99 million for non-need-based aid and some $36 million to need-based aid. In both states, students who achieve B averages in high school are given scholarships to any public or private in-state college or university.

Georgia and Florida states are credited with providing templates for merit-based financial-aid programs and kick-starting a national trend.

Such programs “reward good students ... and encourage students to go to school in state,” said Arlene Hannawalt, the director of the Montana Guaranteed Student Loan Program.

Montana lawmakers have offered students in the top 4 percent of their high school classes a full year of free tuition at an in-state public college, a program in existence for the past 20 years, and they continue to push for additional money for the program, Ms. Hannawalt said. Four bills that were introduced in the legislature this year, but failed to pass, would have made the cost of higher education even more affordable for bright students and those in the middle class, she said.

“That’s the most [legislation in this area] we’ve ever had in my 13 years,” Ms. Hannawalt said.

Need vs. Merit

But critics of merit-based programs say they neglect poor students who graduate from lesser-quality high schools while diverting aid to middle- and upper-class families, thereby fostering a more elite system of higher education. (“More College Aid Going to Top Students,” Feb. 17, 1999.)

“While it is certainly good news that there is an increase in spending on student aid, [much of the money] is going towards non-need-based programs, and that’s of some concern,” said Jamie P. Merisotis, the president of the Washington-based Institute for Higher Education Policy.

California, Illinois, New Jersey, New York, and Pennsylvania contributed the most need-based financial aid during the 1997-98 school year, the report says.

Those states have the highest number of college enrollments nationwide, a history of ensuring that needy students have access to college, and “political coalitions that have supported need-based aid,” Mr. Merisotis said.

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A version of this article appeared in the May 12, 1999 edition of Education Week as States Gave More Aid for Higher Education Last Year, Report Says

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