31 Days, 31 Ways: Texas College Students to Receive Less Financial Aid

Throughout the month of August, The Texas Tribune will feature 31 ways Texans' lives will change come Sept. 1, the date most bills passed by the Legislature — including the dramatically reduced budget — take effect. Check out our story calendar here. 

Day 4: Texas slashes financial aid funding for college students.

Tom Melecki will see firsthand the effects of state budget cuts on students trying to earn college degrees in Texas. As the director of the Office of Student Financial Services at the University of Texas, Melecki and his staff, who have been fielding phone calls from frustrated parents, are in a tough position: State funding for the school's loan and work-study programs will be reduced by nearly $14 million within the next two years.

Melecki says the school has opted to spread state and federal money to more students by offering less aid than it has in the past. This year, the financial services office even took the unprecedented step of warning students that their financial aid offers could not be guaranteed until July, after the Legislature adjourned. As a result, Melecki says, UT may have lost qualified students to other schools.

Melecki talked to the Tribune about the impact of the state budget cuts and his office's latest efforts to help students learn how they can survive college with less money.

The state of Texas funds five major financial aid programs: TEXAS Grants, Texas Educational Opportunity Grant, Work Study, the Tuition Equalization Grant and B-On-Time. The Legislature voted to reduce funding to those programs by 15 percent, from about $1 billion during the 2010-11 biennium to $879 million in 2012-13. 

Combined with cuts in federal spending, Texas students will likely receive less financial aid, with some relying more on private loans.

Funding for TEXAS Grants, the state's premier financial aid program for the state's poorest students, will be reduced by 10 percent to $559 million. The Texas Higher Education Coordinating Board estimates that under the new rules, current recipients will continue to receive their funding, in addition to 33,000 new students, but only 30 percent of eligible students will receive the grant.

During the legislative session, saving the TEXAS Grants became a priority for lawmakers who believed that not helping the state's neediest kids receive a higher education would be "devastating" for future generations. Though the TEXAS Grant amount for those attending a college or university is supposed to be $7,100 in the next biennium, the coordinating board is allowing those institutions to give as little as $5,000 per student, provided they make up the difference with other nonloan funds.

Here's how other loan programs fared:

• The Texas Educational Opportunity Grant, a need-based program that serves 9,900 students, received level funding at $24 million for 2012-13. Still, the coordinating board reports that the program remains "woefully underfunded."

• Work study, which serves 4,400 students, received level funding at $15 million. 

• The Tuition Equalization Grant, which provides financial assistance for 24,300 needy students attending private schools, was cut by 20 percent, from $211.8 million to $168.8 million.

• B-On-Time, a program that provides no-interest loans that become free grants for students who graduate within four years with a B average, was cut by 29 percent, from $157.1 million to $111.9 million. The program helps 9,200 students. 

• The Top 10 Percent Scholarship, which will be given to 16,200 students who graduated in the top 10 percent of their high school class, was reduced by 23 percent, from $51 million to $39.6 million.

• The Texas Armed Services Scholarship, a program created to recruit students to join the Texas Army and Air Force National Guard, received level funding at $1.75 million. The program is expected to serve 162 students in the next biennium.
  

Resources for students:

The Texas Higher Education Coordinating Board distributes funding and oversees the state's "Closing the Gaps" higher education plan.

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