SD3 - Student Aid in Virginia
Executive Summary: This study recommends a number of improvements in certain existing state student financial aid programs in order to make then more cost-effective. In addition, several new programs designed to meet the changing needs of Virginia's students are proposed for the 1984-86 biennium. The recommendations and the principal conclusions upon which they are based are summarized below. Although the cuts in federal student aid programs have not been as severe as those originally predicted, they have been significant. In combination with the sharp increases in tuition and fees, particularly at the state-supported institutions, the cuts in student aid are shifting more of the financial burden of attending college to the students. In order for students to pay a larger share of college costs, opportunities to borrow or to earn additional funds are needed. Because many students are already borrowing heavily to finance their education, and because existing loan programs are sufficient to meet current student loan demands, the establishment of a State Loan Program is not recommended. Rather, the expansion of employment opportunities for students is urged. Specifically, the study recommends: 1. That a new need-based student employment program emphasizing off-campus jobs with private business and industry be established to assist students beginning in 1984-85. In 1984-85, the program's first fully operational year, an appropriation of $3.5 million in state funds for student wage subsidies and job development is recommended. This amount would generate an additional $2.0 million in wage money from employers. The total would provide approximately 5,000 students with annual earnings averaging $1,000, In order to place students in jobs beginning in 1984-85, however, a large number of off-campus jobs would need to be developed in 1983-84. Accordingly, the study also recommends that the program be authorized for 1983-84 and funded with a supplemental appropriation of $750,000 for job development support. 2. That institutions give high priority to expanding the number of cooperative education opportunities available to their students and that efforts of state-supported institutions in this regard be supported by the Governor and the General Assembly, the availability of funds permitting. Although the primary objective of Cooperative Education Programs is to provide work experience related to education, rather than to aid financially needy students, these programs are an important source of financial assistance. Cooperative Education employers, most of which are business and industrial firms, pay 100 percent of the students' wages. The costs to the institution are limited to job development, placement and supervision. In addition to the need to expand employment opportunities for students, there is also a need for continued state support of grant and scholarship programs. For several years, Virginia's need-based College Scholarship Assistance Program (CSAP) has been ineffective for lack of sufficient federal and state funds to meet the needs of an ever-expanding number of eligible applicants. Rather than seek additional funds for the program at this time, the study recommends: 3. That the CSAP be restructured for 1983-84 to provide grants of "last resort" to students who have significant financial need after exhausting all other sources of financial aid, including work and loan programs. Under its present structure, CSAP awards are based on the student's financial need before other aid is received. This policy has spread small awards of $200 across a large number of eligible applicants whose individual access to other aid varies considerably. Under the "last resort" concept, available funds would be redirected in larger amounts to the relatively small number of CSAP applicants who have substantial financial need which cannot be met by aid from alternative sources, including work and loan self-help programs. In addition to assisting the students most in need of additional aid through a restructured CSAP, there is also a need to demonstrate a statewide commitment to quality education by recognizing academically talented individuals and encouraging them to pursue higher education at Virginia institutions. The study therefore recommends: 4. That a modest statewide merit-based scholarship program be established for 1984-85. The Scholarship Program would be phased in over a four year period. A first year appropriation of $150,000 would provide 50 students with renewable scholarships of $3,000 per year. By the fourth year, the level of funding would peak at about $500.000 per annum. In order to implement the program for 1984-85, legislation authorizing the program would need to be enacted by the 1983 General Assembly. No appropriation would be required for 1983-84, however. Several existing programs, in addition to the CSAP, are in need of minor modifications in order to accommodate new conditions which will affect students and institutions through the 1980's. To assist state-supported institutions, the study recommends: 5. That discretionary student aid funds received by institutions as part of their biennial appropriations be increased in proportion to future increases in tuition and fees. Recent reductions in general fund support brought about by changing state priorities and limited resources are forcing institutions to increase tuition and fees significantly in order to support their Educational and General Programs. As college costs rise at rates exceeding inflation rates and students are expected to pay more, the institution's need for additional discretionary student aid funds increases proportionally. In addition to the need to link discretionary student aid appropriations to future tuition and fee increases, there is a need at some senior institutions to direct more of this aid to graduate students. The reason is that the sharp increases in graduate tuition and fees are making it difficult for institutions to attract highly qualified graduate students. The Appropriations Act limits to 50 percent the amount of discretionary student aid funds senior institutions may use for graduate student aid. Accordingly, the study recommends: 6. That the Appropriations Act be amended to permit state-supported institutions to use up to 65 percent of their discretionary student aid funds for graduate assistantships and fellowships. In addition to providing certain senior institutions with more flexibility in the use of their discretionary student aid appropriations, there is also a need to extend these funds to all state-supported institutions. Presently, only the 15 senior institutions and Richard Bland College receive such appropriations. Therefore, the Study Committee recommends: 7. That some discretionary student aid funds be appropriated to the Virginia Community College System beginning 1984-85. The Council supported for the 1982-84 biennium an appropriation to the Community Colleges of $500,000 per annum in discretionary student aid funds, but the funds were not provided. Based on the sharp increases in Community College tuition and fees, reconsideration should be given to appropriating this annual amount starting in 1984-85. The costs of attending private colleges are also rising as a result of inflation and other factors. In order to help Virginia's private institutions remain competitive with state- supported institutions, the study also recommends: 8. That appropriations for the private college Tuition Assistance Grant Program (TAGP) be increased as appropriations for the state-supported colleges and universities are increased. Finally, the study recognizes the need to promote greater private business and industry support for higher education institutions through scholarships, fellowships, and assistantships. Increased support derives from a close working relationship between institutions and private business. Although a new State Student Employment Program and an expansion of existing Cooperative Education Programs would go a long way towards achieving this relationship, additional state initiatives are needed. Because increased financial support from business is directly linked to the services business receives as a return on their investment in higher education, the study recommends: 9. That a statewide effort be made to inform private business and industrial firms of the diverse human and natural resources available from Virginia's colleges and universities. 10. That establishment of a statewide clearinghouse be considered for 1984-85 to help business and industry match their needs with the institutions' expertise and resources. |
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