Budget cuts are the name of the game for most states this year, but some of them are coping with their multi-billion dollar shortfalls by shifting funds away from student financial aid.

Taking from the Poor

Budget plans from New Jersey to California are focusing on funneling financial aid reserves back into the general budget–reducing and sometimes eliminating funding to some of the neediest students.

In New Jersey the governor has proposed reducing funds offered to the neediest for-profit school attendees by 40% or $4,300. These students, often adults with no parental help in paying for school, also already face a reported 30% more debt than students who attend non-profit schools.

In Ohio a new budget proposal suggests shifting funds from students at community colleges and increasing money offered to students of universities. Ohio is also considering restructuring the Ohio College Opportunity Grant (OCOG) by making it more difficult for Pell Grant recipients (typically the neediest students) to access funds as well.

Fin Aid Disappearing Act

News for Californian students may be the worst of all: their funds may disappear altogether. Governor Schwarzenneger has suggested some drastic changes to the Cal Grant, California’s state student aid, including:

• Eliminating the Cal Grant for future generations of students (which has been in place since the 1950s!),
• Rescinding the award from the 118,000 incoming freshmen who were promised Cal Grants, and
• Refusing to increase current Cal Grant awardees’ funds to help with college cost increases.

This could end up hurting students who never had a Cal Grant, as well, as University of California schools are considering taking some funds from students who had been awarded university grants to help fill the gap of those losing Cal Grants.

Not only are their aid funds shrinking, but the cost of attendance is being hiked yet again. California public colleges and universities are planning an approximate 10% tuition increase.

More Waiting for Students

As if admissions wait lists weren’t bad enough, it looks like there will be more waiting for students this summer as state legislatures deliberate these proposals. Keep watching the Pay for College Blog for more news about how budget cuts could affect your family’s college funding plan.

All the best,
Deborah Fox

photo by sailingpUSA