Resources & Publications

In Focus: State Postsecondary Policy

Mar 20, 2014  |  PERMALINK »

Amid Rising College Costs, State Funding for Need-Based Aid is Too Low

By Manuela Ekowo and Katherine Saunders

The rising cost of college is at the forefront of the higher education debate. College costs are rising four times faster than family income, putting a postsecondary education further out of reach for low-income students.

Low-income students are often the first in their family to attend college and are at higher risk of dropping out because of unmet need—the gap between college costs and what students can afford to pay on their own and/or with aid that does not need to be repaid. One option available to address this gap is state need-based aid, which is awarded based on income and other financial factors (as opposed to academic performance). However, a recent report shows that, despite recent modest increases, state funding for such programs is still too low to measurably improve college access and success for low-income students.

Despite the proven success of need-based aid in reducing students’ financial burdens, investments to date have been far too small.  In 2012-13, the average full-time community college student still had more than $6,000 in unmet need. According to the most recent report from the National Association of State Student Grant and Aid Programs (NASSGAP), in 2011-12, the 50 states and District of Columbia spent a total of $6.8 billion on need-based grant aid for college students. While this is a 6 percent increase from the previous year, it averages out to only $482 per enrolled undergraduate student—less than one-fifth of what the federal government spent on Pell Grants, the primary federal grant program to help millions of low-income students access postsecondary education. California, New York, and Texas led all states with the amount of need-based undergraduate grant aid awarded to students in 2011-12.

All the available data shows that investing in an individual’s education and training provides states with a more skilled and educated workforce and improves states’ economies in both the short and long term. In a joint study of all 50 states with the Center on Wisconsin Strategy (COWS), CLASP describes just how many workers need better skills and wages to become self-sufficient and promote economic growth in their state. This is consistent with research by the Economic Policy Institute, which finds that by increasing access to higher education, states will “expand economic opportunity and…do more to strengthen the overall state economy than anything else a state government can do.”

Many states are holding off on new investments until they have fully recovered from the recession, but students cannot afford to wait for the postsecondary education they need to secure their future. Need-based financial aid should continue to be a priority for states; it is a win for students and for state economies.

Mar 11, 2014  |  PERMALINK »

Higher Education is a Top Priority in President Obama’s FY 2015 Budget

by Katherine Saunders and Marcie Foster

Last Tuesday, President Obama released a FY 2015 budget proposal that prioritizes education and reaffirms a commitment to making college affordable and improving college completion rates.

This year’s budget request builds on previous actions by the Administration to make college affordable and increase the proportion of Americans with a postsecondary credential. The budget makes key investments in existing programs and proposes new programs that would give states and institutions bigger, more defined roles in supporting access and success for low-income and moderate-income students.  

The President maintains his commitment to existing programs that serve as the bedrock of student financial aid. The budget calls for an increase in the maximum Pell Grant to $5,830 for the 2015-2016 academic year and takes steps to shore up the program’s funding gap in future years by reforming the Perkins Loan program. These funds would ensure Pell grants remain available to nearly 9 million low- and moderate-income students.

Additionally, the budget calls on Congress to pass legislation that would make federal financial aid available to students without a high school diploma or equivalency who are enrolled in eligible career pathways programs. This critical provision, which CLASP strongly supports, would strengthen adult career pathway bridge programs and co-enrollment approaches that help low-income, low-skilled adults and out-of-school youth. Right now, students enrolled in these programs are not eligible to receive a single dollar of federal financial assistance (including student loans) for their college coursework.

The Budget also seeks to reform campus-based aid programs, such as federal work-study. The request would revise current allocation formulas, disbursing funds to institutions based on the enrollment and graduation of Pell-eligible students rather than historical funding levels. Two new investments in the President’s budget request include the College Opportunity and Graduation Bonus and the State Higher Education Performance Fund. The College Opportunity and Graduation Bonus would include $7 billion in mandatory funding over 10 years to reward colleges that successfully enroll and graduate a significant number of low- and moderate-income students “on time” (not defined in the budget request). Under this new program, annual grants would be given to eligible institutions based on their number of on-time Pell graduates multiplied by a tiered bonus amount per student ($1,000 for each Pell graduate at a four-year institution, $700 at two-year institutions, and $350 at less-than-2-year institutions).

Bonus funds would be used by institutions to improve college access and success for low-income students through such activities as awarding need-based aid, enhancing supportive services, and pursuing acceleration strategies.  The State Higher Education Performance Fund proposes $4 billion in four-year competitive grants to encourage and support systemic efforts to improve college attainment and affordability, especially for low-income students. Grantees would implement performance-based policy and funding reforms that encourage degree attainment and affordability. States would be required to match their federal grants dollar for dollar, for a total investment of $8 billion over four years. 

Finally, the budget requests the permanent extension of the American Opportunity Tax Credit (AOTC), which provides financial assistance to students or to taxpayers whose children are attending college (see CLASP proposal to make the AOTC work better for low- and moderate-income students). The request also ends the taxation of Pell grants.

Overall, the budget reflects a continued commitment to low-income students and takes steps to strengthen the role of institutions and states in supporting student success. Collectively, the proposed reforms seek to increase access to college and employment opportunities by making postsecondary education more affordable and better targeting resources to institutions that demonstrate success in access, affordability, and completion.  As Congress prepares its budget and higher education funding levels for the upcoming fiscal year, it should consider these reforms a strong foundation for improving college affordability and improving the skills of America’s workforce.

Apr 9, 2012  |  PERMALINK »

Federal Agencies Show Strong Commitment to Career Pathways

By Marcie Foster

Last week, the U.S. Departments of Labor, Education, and Health and Human Services released a joint letter of support demonstrating their shared commitment to career pathways as a key strategy to improve the number of adults and youth obtaining postsecondary and industry-recognized credentials. CLASP has long supported career pathways as an evidence-backed strategy to expand economic opportunity and access to marketable credentials for low-income workers at all skill levels, and is pleased to see the federal government reinforce the effectiveness of this approach. 

While this letter is the first of its kind, individual agencies have signaled their support for pathways and provided technical assistance on best practices through guidance and program memoranda to their grantees. These include:

Several states have already adopted a career pathways approach, including California, Massachusetts, Minnesota, Oregon, Washington, and Wisconsin. The Joyce Foundation's Shifting Gears Initiative helped expand these efforts. This multiyear state policy initiative promoted regional economic growth by improving the education and skills training of the workforce in six Midwestern states- Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin. CLASP managed this effort and was the main technical assistance provider to the participating states.

Hopefully, with the introduction of this letter, many more states will be encouraged to forge new cross-agency partnerships and take the first step toward setting in place a career pathways framework for education and training statewide.

For more information on how to find funding for a career pathways effort, view Funding Career Pathways and Career Pathway Bridges: A Federal Policy Toolkit for States>>

For additional resources from the Departments of Labor and Education on career pathways, visit www.learnwork.workforce3one.org >>

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