Study faults state financial aid

Needy students attend out-of-state colleges for better offers, it shows

October 20, 2006|By Gadi Dechter | Gadi Dechter,SUN REPORTER

Maryland's higher education officials received fresh evidence yesterday that the state's financial aid to needy students is insufficient, and that thousands of them may be choosing to go out of state to college as a result -- some apparently with more generous aid packages.

These are the conclusions of a recent survey conducted by the Maryland Higher Education Commission that seeks to understand why approximately 40 percent of low- to moderate-income students who are offered state money to attend colleges in Maryland end up declining or canceling the award.

Officials said yesterday that they were surprised to find that about half of college-bound students in 2005 who declined to accept Maryland Educational Assistance grants -- by far the state's largest financial aid program -- indicated in a follow-up questionnaire that they had enrolled in college in a different state, where the cost of tuition would be significantly higher.

"I just don't know how to explain or even begin to think about people [offered] need-based aid going out of state. It's just inconceivable to me that they're saving money doing that," said University System of Maryland Chancellor William E. Kirwan.

Calling the findings "disturbing," higher education Secretary Calvin W. Burnett said that the survey responses suggested that Maryland's financial aid to needy students, despite being doubled since 2004, ought to be increased.

Based on the response rate to the survey, 10 percent of low- to moderate-income students receiving aid offers left Maryland -- and its free money on the table -- last year.

Educational assistance grants, which are offered to needy full-time students attending public or private college in Maryland, currently range from $400 to $3,000 annually, and average about $1,900.

The main reason given by students who initially accepted the grants but then canceled them was that they stopped attending college full-time -- another indication, officials said, that financial aid available in Maryland was insufficient to support a traditional college schedule for many needy students.

The survey results came on the same day that the commission released another study showing that most Maryland students do not receive sufficient aid packages.

The average "unmet need" for financial aid recipients at public colleges is more than $7,000, while at private colleges it is about $10,000 per year, according to the report.

The effect of financial aid shortfalls is felt most by the poorest students, who end up borrowing the most money, officials said yesterday. For example, community college students whose families' adjusted gross income was $15,000 had 22 percent more student loans than students reporting incomes above $60,000, the study shows.

Maryland is considered a high-cost state when it comes to higher education, "but in terms of financial aid, we're in the middle of the pack," said Andrea Mansfield, who heads the division of finance policy at the higher education commission.

In recent years, there has been an emphasis on need-based financial aid in the state, and a shift away from state-sponsored merit aid. Since 2004, total state financial aid expenditures on higher education rose from $75 million to $110 million, according to Mansfield.

Because of the trend, higher education officials held out hope yesterday that the 40 percent cancellation rate of need-based financial aid awards to college students may decrease this year, thanks to a change in the funding formula that allows the state to substantially increase the amount offered to students.

In 2005, about 36,000 educational assistance grants were awarded to college students, totaling nearly $77 million. This year, more than $96 million was awarded to more than 39,000 students.

Kirwan said increasing institutional need-based aid is a priority of the 13-campus University System of Maryland.

Tomorrow, the system's flagship campus in College Park will announce the results and goals of its ongoing capital campaign. A spokesman said one-third of the funds would be spent on financial aid programs.

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