Financial aid for needy students has not caught up with rising tuition fees

The price of a college education continues to rise, unlike the minimum wage and the number of hours per day. Here’s how many hours a week a student should work to cover their tuition and other costs. PennyGem’s Johana Restrepo has more.

As the cost of college education continues to rise in Virginia, the amount of financial aid available to needy students is not keeping pace.

The result is a great unmet need for students, even after the distribution of millions in aid, according to a report released on Monday by the Joint Audit and Legislative Review Commission.

The report recommends diverting public funds – which are only part of financial aid – to the most needy students. And he recommends ending practices in which financial aid is awarded inconsistently from school to school and merging aid programs that are complicated to understand.

Peter Blake, head of the State Council for Higher Education in Virginia, said he wants to simplify financial aid and make it available to more students.

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The average annual cost of tuition and fees in Virginia has climbed 33% over the past decade, faster than the national average. The total cost of a year of college education ranges from about $23,000 at Virginia State University to about $40,000 at the College of William & Mary.

And although the amount of financial aid increased by 50% during this period, it was still not enough for students, who are more likely to receive no financial aid from their parents, according to the report.

In the 2020-2021 school year, students at Virginia’s 15 public colleges received $670 million in financial aid, which comes from the federal government, the state, and the universities themselves. Some aid is based on need, others on merit.

The number of students in the state who do not have the ability to pay for college has risen to about 22,000. As school enrollment has increased, universities have attracted more first-generation students and low income. This means that university students are less able to pay their tuition fees than before.

One measure the state uses to determine the amount of aid a student needs is the “expected family contribution,” or the amount of aid students can expect from parents. The average student’s expected family contribution has dropped by 40% over the past decade, and the number of students with no expected family contribution has increased.

In other words, more students need financial aid and the needs are greater.

Students attending historically black colleges and universities — including VSU and Norfolk State University — have higher unmet need and more debt than students at other four-year public schools. George Mason University, Virginia Commonwealth University, and Old Dominion University also have the majority of high-need students in the state. The amount of public funding for these schools is expected to increase in fiscal year 2024.

After applying $670 million in 2020-21, there were still 33,000 students in the state with a total need of $162 million, according to the report.

This disparity drives up student debt, which in Virginia has averaged $30,000 per student.

About a quarter of financial aid comes from the state, the rest from the federal government and universities. But the JLARC report determined that Virginia’s financial aid programs are confusing and have too many barriers.

The two main programs, the Virginia Guaranteed Assistance Program and the Virginia Commonwealth Award, each have separate requirements for students and staff members. Virginia spends about $180 million a year on these programs.

They require students to take full-time courses, reach certain academic benchmarks, and progress at a certain rate.

But the report says these programs would be more effective if they were based simply on need. Students who struggle academically or cannot afford full-time classes often need it the most.

And universities distribute funds unevenly. For example, a VSU student who needs $10,000 is not eligible for a VGAP award. But the same Virginia Military Institute student can receive thousands of dollars in aid.

Colleges can also increase their financial aid to some extent. They fund financial aid with tuition, endowments, and other sources of income.

The gap between what a university gets and what it needs is the widest at Mason. After state funding, it still needed $36 million to cover aid for its most needy students.

Virginia allocates funds to universities according to a predetermined formula. In 2019, Mason received $4,000 per full-time equivalent student, while other universities with higher income students, such as W&M and VMI, got significantly more. W&M received $8,000 per full-time student, double what Mason received.