State Financial Aid News Update

Indiana — President Obama visited Indiana today, another state whose budget crisis has forced a 30% cut to the amount of state financial aid awarded to each student who applied for it. The number of Indiana students who applied for state financial aid shot up 60,000 this year! (Yes, you read that right: 60,000 more students applied for state financial aid this year than last year.) There just wasn’t enough money in the budget for the State Student Assistance Commission to offer fully funded state grants to everyone who applied.

In Elkhart County, where the president discussed the purpose and dispersal of the stimulus bill money, the themes were unemployment, getting people back to work, the collapse of old manufacturing, and the rise of new energy and fuel-efficient automotive technology. Needed: an educated middle class looking forward to new jobs, trained for new technology, and rebuilding prosperous communities.

Fortunately, several Indiana colleges and universities are stepping up to help their students stay in school. Indiana Tech, Manchester College, Grace College, University of Indianapolis, University of Saint Francis, Trine University, Wabash College, and Huntington University have all dug deep into their pockets to cover the gaps in thousands of students’ financial aid. Indiana University-Purdue University Fort Wayne enrollees are not so fortunate; the university advised its students that it can’t provide additional financial aid on such short notice.

Illinois — As in Michigan and Indiana, the Illinois budget shortfall required the elimination of funding that would have provided state financial aid for 130,000 college students, and reduction of one state grant, the Monetary Assistance Program, by half. In past years, Illinois college students had until August to apply for state financial aid. This year, accurately anticipating a huge increase in applications, the Illinois Student Assistance Commission changed the deadline to May 15. They tried to get the word out, but thousands of students missed the early cut-off.

We checked the federal financial aid website for the FAFSA policy on unanticipated changes to a student’s financial situation. Unfortunately, once your FAFSA has been processed, you can’t make any changes to reflect the loss of state aid. It says, “If your financial situation changes, check with your financial aid administrator.”

Financial aid administrators in Illinois seem to be equally stuck, for now. Nevertheless, it would be terrific if Illinois schools, like their Indiana peers, could find the resources to keep their students from having to drop out this fall.

“Education Pays,” a College Board report on the benefits of higher education to families, communities, and society, documented higher earnings, higher contributions to state taxes, lower unemployment levels, and lower poverty levels for workers with college degrees than for those without. A tax base that can’t pay taxes, or worse, has to leave the state for education or work, can’t help the state recover from recession.

Other possible solutions to the state financial aid crisis? Illinois and Indiana, along with many other states, received stimulus bill education funding a few months ago and may be about to get another installment a month early. Covering state financial aid shortfalls wasn’t one of the intended uses of this federal funding, but a small investment in college students now may restore an educated state workforce in the long run.

Otherwise, a later-enrolling accredited online program may work for students whose campus semester starts without them.

Leave a comment

Spam Protection by WP-SpamFree