HD11 - Review of Undergraduate Student Financial Aid in Virginia's Public Institutions


Executive Summary:
Item 16J of the 1999 Appropriation Act directed the Joint Legislative Audit and Review Commission (JLARC) to review need-based financial aid programs of the Commonwealth of Virginia. The study mandate directed JLARC to review financial aid systems in other states and to present alternative structures for carrying out financial aid in Virginia. The mandate also directed JLARC to review merit and incentive scholarship programs.

Administration of need-based financial aid in Virginia is currently decentralized to the institutions and largely driven by federal money, regulations, and schedules. The Commonwealth provided over $51 million in need-based aid to undergraduate students at public institutions in Virginia during the 1997-98 academic year. Grants are distributed to financially needy students primarily through the Commonwealth Award Program and the Virginia Guaranteed Assistance Program (VGAP).

This study found that oversight of these grants by the State Council of Higher Education for Virginia (SCHEV) historically has been weak, and that the Council could improve its oversight function by better monitoring actual awards to students. A review of SCHEV financial aid records showed that almost half of the students who were eligible for either a Commonwealth or VGAP award actually received nothing from these programs. In addition, the institutions appeared to be varying from their own award schedules in 61 to 65 percent of the cases in which awards were made. Consequently, this study concluded that the State could do a better job of administering its portion of financial aid by: (1) better articulating its policies, (2) monitoring the award of State grants to eligible students, (3) identifying students who did not receive the full amount of State aid for which they were eligible, and (4) calculating the amount needed to fully fund grants to eligible students. To accomplish these objectives, the State needs to articulate better a framework for need-based financial aid for undergraduates at public colleges and universities in Virginia.

Merit scholarship programs have worthy goals, but implementation of a merit-based program could dilute funds available for need-based programs. Newly established merit-based programs in other states have been more expensive than anticipated and have had mixed success. Therefore, the General Assembly may wish to defer action on a merit-based program until the goals for need-based programs are better articulated and funded. Also, action should be deferred until the results and costs from other states' programs are better known. If incentive scholarships are to be offered to increase the number of skilled workers in technological fields, rapid change in the technology fields needs to be taken into consideration when targeting academic programs.