Pennsylvania college students counting on grants from the state’s Higher Education Assistance Agency to help fund their education may see the dollar amounts of those grants reduced in the 2019-20 academic year.
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Appearing last week before the House Appropriations Committee, Elizabeth McCloud, PHEAA’s vice president for state grants and special programs, indicated that the agency has had to increasingly dip into its reserve fund to fund those grants, which maxed out at $4,123 for the current academic year.
Over the past decade, the value of those grants has decreased by about 12 percent from a maximum of $4,700 in 2007-08. McCloud estimated that maintaining the grants at the current level would require some $347.2 million in funding for the 2019-20 academic year.
The bulk of those dollars would come from the state’s general fund. Democratic Gov. Thomas Wolf has asked for $310.2 million for PHEAA from the Republican-controlled Legislature in the budget proposal he submitted Feb. 5. That’s an increase of $36.8 million over the current fiscal year and is based on the assumption that PHEAA would funnel $58 million of its own revenues, which comes primarily from servicing student loans, into the grant program.
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PHEAA President and CEO James Steeley told lawmakers Tuesday that his agency is increasingly being forced to use its cash reserves to help fund the grant program, something he indicated is becoming increasingly difficult because of changes in the business climate.
The grants are available to any Pennsylvania student who has a high-school diploma and is pursuing higher education at a qualified institution. This includes four-year colleges and universities, community colleges, and some trade and technical schools. Students must be at least half-time students and be on an academic track lasting two years or more. The amount of the grant, which does not have to be repaid, varies according to each applicant’s financial situation.
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Nearly all the grants go to students attending Pennsylvania institutions, but the state has reciprocal agreements with Delaware, Ohio, Vermont, West Virginia and Massachusetts.
Students who are residents of Pennsylvania but are pursuing their education in those states, as well as the District of Columbia, are eligible for grants, but at a reduced rate.
In an effort to control costs, PHEAA has modified its eligibility standards for students who take classes online. If a student is taking classes online, the amount of their grant is reduced. And students become ineligible for grants if they take more than half their classes online while attending a school outside Pennsylvania.
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Nathan Hench, PHEAA’s vice president for public affairs, indicated that the issue of grants for distance-education requires further study. During Tuesday’s hearing, the concern was expressed that some students could find themselves in financial peril if they saw their grants reduced or eliminated because they were taking extra classes online.
“I think that’s a great conversation that we’re going to have to have as we create the formula for 2019-20,” he said.
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