Board of Higher Education Meeting | October 6, 2009

Background

State resources for Financial Aid Programs appropriated under three line accounts:

7070-0065 General Scholarship Account$87,875,218

7066-0016 Foster Child Grant$1,150,000

7066-0021 Foster & Adopted Fee Waiver$1,000,000

Appropriation Summary

Background

$87m in FY2010 reflects a 10% reduction compared to FY2009

This 10% overall reduction in appropriation for State Financial Aid is much less than the average reduction for other higher education accounts

Represents the Governor’s recognition of the importance of financial aid and efforts to minimize the impact of budget cuts on students

Budget Overview

Background

“Earmarks” eliminated from the appropriation language

DHE given authority to establish programs’ funding levels

Underlying mandate that the DHE would continue to fund programs in prior year budget, but not at same levels

Budget Overview

FY2010 Program Allocations

Overarching principles guiding program allocations

Prioritization of MASSGrant, the Commonwealth’s primary need-based financial aid program

Consideration of average annual demand and expenditure of each program over past three years

Continued commitment to the Commonwealth’s workforce development needs

Recognizing national and local trends that can help predict levels of need and demand for certain programs (i.e., Pell Grant, MASSGrant)

Guiding Principles

FY2010 Program Allocation

Impact of changes in Federal Methodology—Automatic Zero Expected Family Contribution (EFC )

Increase in annual Pell Grant awards—Stimulus Funds

Increase in financial aid applications (eligible)

Additional Factors

FY2010 Program Allocations

Review and discussion of funding scenarios included the following groups and organizations:

Executive Office of Education

Department of Early Education and Care

Association of Independent Colleges and Universities of Massachusetts (AICUM)

Statewide Financial Aid Advisory Committee

Various constituent groups (Boston Access, Strategies for Children)

Vetting Process with Stakeholders

FY 2010 Program Allocations

All programs funded in FY2009 continue to be funded in FY2010

MASSGrant funding increased by 18%

20% average reduction for need-based programs

20% average reduction for workforce development programs

Slightly higher reduction to programs with history of being under-utilized

Impact of Guiding Principles & Factors

FY2010 Program Allocations

FY09 and FY10 Program Allocations

Program

FY2009 Appropriatio

n

FY2010 Appropriatio

nMASSGrant $28,824,582 $34,511,046

Community College Cash Grant 14,395,295 11,516,236

State College Cash Grant 9,896,550 7,917,240

University of Massachusetts Cash Grant

8,697,220 6,967,776

Gilbert Grant 20,773,508 16,618,807

Part-Time Grant 3,148,902 2,109,789

Paraprofessional Grant 2,249,216 1,679,373

Early Childhood Educators Scholarship

4,000,000 3,200,000

One Family, Inc., Scholars Program

850,000 600,000

Herter Scholarship 960,000 950,000

Public Service Grant 40,000 30,000

Washington Center 350,000 154,000

Math and Science Scholarship 1,000,000 100,000

FY2010 Program Allocations

12.5% increase in “on-time” applicants

60% increase in the number of “on-time” applicants with an EFC=O (36,715 in FY2009; 56,237 in FY2010)

30% change in number of students who are expected to receive MASSGrant

Given the projected “eligible” population, $43 million would be required to fund MASSGrant at the 2008-09 level ($28.8m available in FY2009)

Awards for MASSGrant required reduction to meet demand

MASSGrant Highlights