KELLY MEYERHOFER Wisconsin State Journal
Wisconsin’s financial aid funding hasn’t kept pace with inflation or the rising cost of college over the past decade, a new report finds, raising questions about the capacity of the university. state to enroll and graduate enough students to meet long-term workforce needs.
Researchers from the nonpartisan Wisconsin Policy Forum wrote in a report released Tuesday that state spending on grants, loans, and scholarships to undergraduate students grew rapidly from 2000 to 2011, but has stagnated since then. Students in the University of Wisconsin system eligible for a Wisconsin scholarship, the most common form of state financial aid awarded on the basis of financial need, received an average of $2,163 in 2010 but only $2,037 $ in 2021 – and that without taking inflation into account.
Fewer aid dollars could mean students are more likely to drop out or take longer to graduate. The trend may also affect universities and colleges, factoring in student enrollment decisions and putting more pressure on campus budgets. Falling funding levels are also contributing to the state’s labor needs, especially in areas that are struggling to hire, such as nursing, teaching and skilled trades.
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“Financial assistance is not a panacea for the state’s workforce problems, but it can be a tool to consider,” said report author Jason Stein. “It could potentially pay for itself in the long run by giving people the skills and credentials to earn more, pay more taxes, and ultimately contribute more to the state over their working lives.”
Consider an in-state student attending UW-Madison in 2000. State and federal grants covered 91% of their tuition, according to the report. In 2021, the percentage has dropped to 69% and that’s not including additional expenses, such as tuition, housing, food, and books.
Wisconsin grants are capped at $3,150 per student, an amount enshrined in state law in 2009-2010. With a limited pot of taxpayer money set aside for grants and grants awarded on a first-come, first-served basis, it means some students are out of luck. In 2020, the UW system reported that funding for the grant program fell short by $2.3 million.
A 2020 study by Rand Corp. found that applications submitted later tended to come from low-income students and students over the age of 24 or otherwise independent of their families.
“This raises the question of whether the state’s approach may disadvantage the very students that aid might be most effective in helping,” the Wisconsin Policy Forum report notes.
Some institutions may offset the trend by offering their own scholarships, which are usually funded by private donations, endowments, and tuition fees from students who can afford to pay more. But the change raises concerns for students enrolled at campuses with fewer resources, according to the report.
UW-Madison’s institutional grants to undergraduates, for example, averaged nearly $10,000 per student last year. At UW-Milwaukee, an institution serving significantly more students of color and lower-income families, institutional grants averaged about $1,500 per student.
The report also found that Wisconsin’s financial aid funding lags far behind other states. This may be the result of a political focus on maintaining the undergraduate tuition freeze in the state as a way to keep UW tuition affordable.
Last year, however, Republican lawmakers relinquished tuition-setting authority to the UW board for the first time since 2013. While Democratic Gov. Tony Evers injected $25 million in one-time federal funding for pandemic relief to extend the freeze through the For the 2022-23 school year, whether to raise tuition fees — and who should bear the cost increases — should be back in the near future.
“Although the tuition freeze has proven popular in polls, funding a freeze for all students represents a greater potential cost to the state than offering targeted aid to low-income students” , says the report.
The Wisconsin Policy Forum made several recommendations, such as increasing overall grant funding, increasing the maximum grant amount, consolidating small financial aid programs scattered across at least nine state agencies into one or a handful, tying funding levels or grant amounts to tuition fee increases, or the expansion of a UW-Madison Scholarship Promise Program for Low-Income Students to other institutions, including technical and tribal colleges.
The Herzfeld Foundation, Regional Alliance for Higher Education, ADAMM Foundation, and Milwaukee Regional Research Forum sponsored the report.
“Financial assistance is not a panacea for state labor issues, but it can be a tool to consider.”
Jason Stein author of the report