HARRISBURG (TNS) — An unanticipated last-minute surge in college students applying for financial aid has created a dilemma for Pennsylvania’s student financial aid agency.
The Pennsylvania Higher Education Assistance Agency alerted its board members and lawmakers on Wednesday that $23 million more than the $393.4 million proposed in Gov. Josh Shapiro’s budget is needed to keep the maximum grant award at $5,750.
Without the additional funding from the state, it leaves the agency’s board in a position of either dipping deeper into the agency’s reserves beyond the $15 million it already committed to supplement state dollars for the grant program or reducing grant amounts.
All this is happening at a time when higher education reform has become a frontburner issue for the governor, who laid out his higher ed blueprint in January, and Senate Republicans, who this week saw their chamber pass their six-bill package aimed at reforming how the state invests in higher education in a different way than what Shapiro had proposed.
Sen. Wayne Fontana, D-Allegheny County, who chairs PHEAA’s board, said the letter to board members and lawmakers coming out a day after the Senate vote was intended as a reminder that they need to fund the grant program already in place.
State grants, which do not have to be repaid, go to students from low- and lower-middle-income Pennsylvania families. The size of the award depends on a student’s tuition costs and family income, the number of applicants, and the available funding for the grant program.
In April, the number of students who completed the Free Application for Federal Student Aid, which is the first step to determining their eligibility for this grant program as well as federal and institutional aid, was running way behind the prior year’s numbers. PHEAA’s board voted to move the deadline for receiving the FAFSA for state grant purposes to June 1, a month later than its usual May 1 deadline.
According to PHEAA, the number of completed FAFSA forms it had received by May 1 was down more than 15% from the prior year’s 373,237 applications. Extending the deadline a month and getting publicity to get students to apply led to more than 55,000 students, or a total of 370,607, submitting a FAFSA over the course of those four weeks.
“I guess that worked,” Fontana said with a chuckle. “We got a lot more than we anticipated but that’s a good thing. It’s not a bad thing. Obviously, you want them to go to school. You want them to get the benefits. It’s just up to us now to follow through with it.”
In May, PHEAA’s board approved a grant formula that held the maximum grant at the current record-high level. However, the board knew more money than the $393.4 million in Shapiro’s budget for the grant program – that includes a $15 million supplement from PHEAA’s reserves – would be needed to offset an inflation adjustment in the federal calculation used to determine how much financial aid a student needs.
“At this point to level fund the PHEAA grant at $5,750 from this past school year, we will need an additional $23 million from the general fund,” said Rep. Sheryl Delozier, R-Cumberland County, who serves on PHEAA’s board. “I will be advocating for the dollars for our students for the grant program to help reduce the cost of higher education for our PA families.”
Fontana said PHEAA has the ability to cover the $23 million gap in funding for next year by using the agency’s reserves but that is a scenario that can only play over a limited number of times before the reserves are depleted.
“Then what?” he said.
The grant formula approved by the board last month sets the maximum award for students who attend community colleges and two-year post-secondary institutions at $3,059. Those who attend one of the 10 State System of Higher Education universities can receive up to $4,894, while those who attend Penn State, Pitt, Temple or Lincoln universities can get up to $5,261. Students enrolled in costlier private colleges and universities are eligible for the maximum of $5,750.
