By Mitchell Schnurman
mschnurman@star-telegram.com
Fallout from the Texas budget cuts is starting to hit home. Public colleges are losing about 15 percent of state funding for financial aid, roughly $140 million statewide, and they're sending out award notices for the start of school next month.
No surprise that the price of college is going up sharply for many students who can least afford it. In addition to less aid, enrollments are climbing for students who qualify for Texas grants, which usually translates to family incomes of less than $40,000 annually.
For many, the only option is to borrow more money.
"Private alternative loans -- I've had to say that more than ever before," said Karen Krause, financial aid director at the University of Texas at Arlington. "I don't like making that suggestion."
It means that students have maxed out their government-backed student loans, so their debts are rising fast. Private student loans are tricky, too, with rates and penalties that can sting down the road. It's a sound financial strategy to keep student debt at the federal maximum of $5,500 to $7,500 a school year, except that some families don't have the income to cover the gap.
The Legislature has been steadily shifting the costs of higher education to students and their families. The deregulation of tuition at state schools, combined with cuts in state support, accelerated that push in the past decade. But financial aid officers say they cannot recall such deep cuts in aid.
Texas has an ambitious goal to "close the gaps" in education, aiming to raise college enrollment by 630,000 from 2000 to 2015. It's more than three-quarters of the way there, and the state has done even better toward its goal of enrolling more Hispanics and African-Americans.
The question is whether financial aid cuts will discourage needy families and stall the momentum. The state will save money in the next two years, but it's a lousy trade-off if fewer go to college -- or more top students leave Texas. Apparently, lawmakers are betting that families will just keep borrowing, but the recession has created a different attitude.
"One parent said to me, 'My job is secure today, but who knows about six months from now?'" said Tom Melecki, director of student financial services in Austin. "I understand why everyone is wary about debt."
Most college students get some financial aid, ranging from two-thirds of those at UTA to more than 80 percent at Tarleton State. But that high figure includes loans and scholarships, which aren't necessarily tied to family income. Grants and scholarships are most attractive because they don't have to be repaid, and grants are getting the big ax.
About 43,000 fewer students in Texas will get state aid as a result of the new budget. Federal loan programs remain the same, but there were cuts in Pell grants (for summer school) and two other programs, and they affect UTA in a big way.
For example, more than 400 seniors who major in science and math and maintain high grades will lose $4,000 federal grants for 2011-12. That has the school scrambling to cobble together funding from other sources, and Krause expects to make up about half the amount for those who applied on time.
That still drains institutional money for others. More than 11,000 UTA students received Pell grants last year (often up to $5,550 each), and most also got state grants.
Total awards are down about 14 percent, Krause said, while about 2,100 more students are seeking aid this year.Krause has advised some students to live at home and commute to class, which saves on room and board but dilutes the college experience. That's also not an option for a Tarrant County resident who's going to UT Austin or for Tarleton students who live a long way from Stephenville.
Each of those colleges faces a similar percentage cut in financial aid, but the impact plays out differently because of funding formulas and strategies by the individual schools. UTA, for instance, plans to give the maximum Texas grant award, about $7,100, to eligible returning students because that funding source is remaining relatively stable for the university.
But those who didn't apply by the April 15 deadline are likely to get no grants, because all the money is committed. In past years, UTA deadlines were in mid-June, and money was often awarded if the application was received by June 30. First-time students, whose families are less experienced with the process, are more likely to be on the outs.
"People are upset and frustrated, but we just don't have any wiggle room," Krause said.
UT Austin has cut the maximum Texas grant to $5,000 so it can spread more money around. Returning students will get almost $1,800 less than last year, which also means higher loans.
"We wrestled long and hard with this," Melecki said. "Ultimately, we decided that the fairest way is to give everybody a smaller grant."
UT Austin was hit especially hard by state cuts. Its Texas grant funding fell by $10 million, almost a third lower than last year. Reducing the maximum grant enables the school to award about 1,100 Texas grants to freshmen, Melecki said. Nine hundred or so others who qualify are unlikely to get the grants, creating a big gap in their college finance plan.
Tarleton also fears that about half of its eligible freshmen won't get Texas grants, said Betty Murray, financial aid director.
Like UT Austin, it's reducing the award to $5,000, expecting returning students to combine it with a Pell to cover tuition and fees.Most would still have some left over for room and board. But Murray said they're being pinched by federal cuts and a 40-percent decline in scholarship funds in the past two years.
"It's a huge impact for us," Murray said.
Even more so for students and parents borrowing to make up the difference.
Mitchell Schnurman's column appears Sundays and Wednesdays. 817-390-7821
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