A new report argues that Louisiana must reform its college financial aid structure and increase the awards of the state’s need-based GO Grants.
GO Grants funding has remained flat — actually decreasing the value of the average award — while state funding has increased almost every year for merit-based TOPS scholarships.
“Targeting Financial Aid for Improved Retention Outcomes” was presented Monday to the state’s legislatively formed, 18-member Governance Commission for higher education.
Noel-Levitz Higher Education Consultants President and CEO Kevin Crockett said the biggest need is to undo the “overpayment” of aid to some students in order to redirect the dollars to those “most at risk of dropping out” because of financial problems.
The value of a GO Grants award, which was started in 2007, should be increased from $1,000 a year to at least $2,000, with a possible maximum award of $4,000, Crockett said.
The goal is to ensure that at least 55 percent of a low-income student’s financial need is met, he said. The data indicates that having 55 percent of need met is the level at which more than 70 percent of students in Louisiana’s public universities will stay in college after their first year.
The ongoing study is funded by the Bill & Melinda Gates Foundation and conducted by Denver-based Noel-Levitz and the American Institutes of Research.
The Governance Commission is the result of House Concurrent Resolution 184, approved in June as a compromise after legislation failed that would have eliminated the state’s college boards and systems and formed a merged higher education super board.
The commission is expected to focus more on higher education governance structure Tuesday before beginning to make formal recommendations to the Legislature in November.
Louisiana is spending $154 million on TOPS — the Taylor Opportunity Program for Students — this academic year, compared to $26.4 million for the state’s need-based GO Grants.
Because of the flat funding and more students getting GO Grants, the value of the annual award was decreased from $2,000 to $1,000.
“Everything should be done to at least get it back (to $2,000),” Crockett said.
Coupling Go Grants with federal need-based Pell Grants improves student retention by 5.6 percentage points, he said.
Crockett said the decision by the Louisiana Board of Regents to allow campuses to administer Go Grants was the right call.
“When you localize the aid dollars, they tend to get it to the right students,” Crockett said.
LSU System President John Lombardi said the problem too many colleges make is giving students too much money, when they could be convinced to attend LSU and stay in school with less assistance.
“The biggest error we make, in general … is to overpay for the value we get,” Lombardi said. When overpaying, “you get these diminished returns that more dollars don’t necessarily get you more students.”
But Lombardi agreed that campuses are still best at forming the proper total aid packages.
The study has not yet counted LSU because the university’s 84 percent first-year retention rate is much higher than other Louisiana universities and skews the data somewhat, Crockett said.
But University of Louisiana System President Randy Moffett said TOPS must be addressed above all else, especially because TOPS funding remains linked to college tuition levels.
“I know it’s a highly sensitive, political issue,” Moffett said. “But that topic drives all the other components.”
State Commissioner of Higher Education Jim Purcell said the data indicates adjustments are needed.
“TOPS definitely limits state-based, need aid because anytime there’s new money it gets shifted (to TOPS),” Purcell said.
In other study findings, Crockett said the information shows that Pell Grant recipients with 3.0 grade-point averages or better tend to stay in school at almost the same rates as students who do not qualify for Pell awards.
“The Pell is having some positive effect in leveling the playing field,” Crockett said.
The maximum Pell Grant is worth $5,550 a year, although federal budget cuts are threatening to reduce the amount next year.