ISU Center Studies Higher Education Funding and Student Financial Aid

Date: 10/30/06
Contact: Kathy Beal

Because of the downturn in the national economy, more low-income students are being forced out of their first-choice colleges and universities and into lower-cost institutions. That finding is one of many disturbing results from the Illinois State University Center for the Study of Education Policy's study on higher education funding and student financial aid.

The study, funded by the Lumina Foundation for Education, was done in collaboration with the State Higher Education Executive Officers and the National Association of State Student Grant and Aid Programs. The Center for the Study of Education Policy is a "think tank" for education research and expertise to policymakers and practitioners. Since 1960, the Center has published Grapevine, a national data base on state appropriations for higher education.

"Our study emanated from a 2004 Higher Education Funding Symposium at Illinois State University in which University participants and our two national association partners were speakers," said Center Director Ross Hodel. "As the economy was improving, we saw the opportunity and the need to plan for the next recession. The study does not paint a pretty picture. Given the significant tuition increases following each recession, and especially the 2001 recession, it is now imperative that every state have a strong student financial aid program."

The researchers looked at the effects on student access to college, identified states that have been successful in maintaining financial access and collected policy strategies used by the successful states. The study's examination of the 2001 recession was of particular concern because of its significant impact on states' economies, higher education appropriations and student access. The three-part, 25-year study results were disseminated at an October 20 symposium in Chicago.

Results from the study included the following:

. Higher education appropriations did not keep pace with growth in the state economy in any state

. Recessions affected more states, percent declines in higher education appropriations were larger, and it took longer to recover

. Three of the four recessions negatively affected funding for higher education

. After three of the four recessions, tuition increased faster than student aid causing financial access to diminish

. Following the 2001 recession, 14 states increased financial access by balancing need-based aid and tuition

. Family income and student aid did not keep pace with increases in tuition following any of the four recessions

Other findings were that higher education is now more likely to be seen as a personal benefit than a public benefit, tuition offsets represent a last-ditch effort to fund student aid when state funding is not forthcoming, higher education and student financial aid funding have become lower funding priorities for most states, and access is affected with more student aid funds going to traditional college-aged students and more emphasis placed on merit as a criterion for eligibility.

Those states that were successful in protecting student access across recessions followed seven basic themes.

. Have defined goals for student access and a plan that is coherent, clear and visible

. Articulate a clear and consistent message and develop strategies focused on the goal of affordable access to college

. Use student aid options and delivery systems that are tied to and meet state goals

. Mobilize support for access and affordability by reaching out to state government leaders

. Place high priority on developing a climate for commitment and value for access and affordability

. Focus on students, advocate for them and involve them in student aid decisions

. Maximize opportunities for collaboration and coordination at every opportunity