New Study Shows States Shifting Away From Need-Based Aid

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With college costs skyrocketing, low-income students rely on financial aid to achieve their goals in higher education. But a new report from the National Association of State Student Grant and Aid Programs finds the proportion of state aid targeted to fund need-based grants continues to shrink, leaving many of the most vulnerable students to fend for themselves.

NASSGAP’s annual report found that while states are increasing overall grant expenditures, their priorities are shifting away from aid based on financial need. From 2010 to 2011, state spending on need-based aid increased by $31 million, bringing the total to $6.45 billion. However, spending on non-need-based aid increased by nearly eight times that amount ($238 million), bringing the total to $2.66 billion. As a result, the share of grant dollars spent on need-based grants actually declined by 2.5 percentage points in just one year. Combined with many years of shifting priorities, these new data show that over the past decade, the share of grant dollars directed toward need-based aid has declined to 70.8 percent.

With the number of families in financial distress soaring, states should do all they can to break down financial barriers for their neediest students. Ever-mounting college costs don’t just harm the futures of individual students and their families; they threaten the health of our economy and our democracy.

— Megan Salzman