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Report: State college aid is 'broken'

CCHE says nearly two-thirds who qualified last year received no cash

Sara Burnett, Rocky Mountain News

Published January 5, 2006 at midnight

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Nearly two-thirds of Colorado college students who qualified for state financial aid last year didn't receive any state cash, and colleges are using a "bait and switch" to lure students with grants that don't extend beyond the first year, according to a report by the Colorado Commission on Higher Education.

The report, scheduled to be released today, could be the first step in changing how state grant money is distributed to needy students.

"Every time I look at (the report), I'm left speechless and dumbfounded," said CCHE Executive Director Rick O'Donnell. "The upshot of it is that financial aid is broken."

But college officials argue the problem isn't how money is doled out - it's that there's not enough to go around.

"State funds are inadequate," said Gwen Eberhard, director of financial aid at the University of Colorado at Boulder. "Unfortunately, there are more students (eligible for state aid) than we get money for."

State aid also makes up a small percent of most students' aid packages, Eberhard added. So just because a student doesn't get a state grant, it doesn't mean he or she isn't getting help.

In the 2004-2005 school year, the state allocated $77 million for need-based financial aid. That made up 8 percent of the total aid distributed statewide, with other dollars coming from the federal government, student loans and the colleges statewide, O'Donnell said.

State money - known as the Colorado Student Grant - is provided to colleges to pass along to needy students. The grants usually vary from $250 to $5,000, depending on financial need.

Students qualify based on their family's income, along with other factors such as family size. Typically, a family of four that makes about $60,000 or less per year would be eligible.

In 2004-2005, there were 70,583 students enrolled in Colorado colleges and universities who met that limit, O'Donnell said. Of those, 44,278 received no state aid, the study found.

O'Donnell said that distribution of dollars seems to run counter to the state's goal of encouraging more "underserved" students - many of them low-income and minority - to attend college.

He also expressed concern that some colleges front-load aid packages, giving students more grants in their first year to get them to enroll, and that financial aid packages include no incentives for staying in school, such as increased grants in the later years.

At its meeting today, the CCHE is expected to discuss options for the current system. Those options include centralizing all state financial aid in one office, rather than letting colleges determine how much students get, or providing the money directly to students and letting them pass it along to their college of choice.

A decision on which option to pursue - if any - likely won't come until later this year, O'Donnell said.

But Eberhard believes any changes to the system could further complicate an already confusing process.

She also said there are reasonable explanations for students not getting a state grant.

At CU-Boulder, for example, financial aid is distributed on a "first-come, first-served" basis, with students who enroll earliest getting first shot at state grants. Spreading a little bit of money to each eligible student would make little or no impact on many students, rather than a significant help to a smaller group, she added.

"If you spread it out too thin, you're not helping all of your students," Eberhard said.

Student aid roundup

A Colorado Commission on Higher Education report tracked how many students received state financial aid dollars last year.

• $77 million: Amount the state allocated for need-based grants in 2004-2005

• 70,583: Number of students who qualified for the grants

• 44,278: Number of students who received state grant money

• $250 to $5,000: Typical range of state grant amounts per student, based on need and money available

• 8 percent: Proportion of total financial aid distributed in Colorado in 2004-2005 that came from the state

Source: Colorado Commission on Higher Education