Topic:
LEGISLATION; SCHOOL FINANCE; GRANTS; STUDENT FINANCIAL AID; STATISTICAL INFORMATION; TUITION;
Location:
EDUCATION - HIGHER - FINANCE; SCHOLARSHIPS AND LOAN PROGRAMS;

OLR Research Report


January 26, 2006

 

2006-R-0103

STATE FINANCIAL AID FOR STUDENTS AT PUBLIC INSTITUTIONS

By: Saul Spigel, Chief Analyst

You asked us to compare the history, funding, and administration of the Connecticut Aid to Public College Students (CAPCS) and the Capitol Scholarship grant programs.

SUMMARY

The legislature established both the CAPCS and Capitol Scholarship grant programs in the 1980s. They differ in terms of student eligibility, funding formulas, and administration. Table 1 compares them.

Table 1: CAPCS & Capitol Scholarships Compared

PROGRAM

CREATED

STUDENT ELIGIBILITY

FUNDING MECHANISM

ADMINISTRATION

CAPCS

1987

Financial need

Student must be matriculated in degree or precollege remedial program and enrolled full-or part-time in CT public college or university

BGHE submits budget request for 15% of constituent units' tuition revenue two years' prior (the amount BGHE policy requires constituent units to set aside for financial aid)

Legislature determines appropriation

DHE allocates budgeted appropriation to individual institutions based on unmet student financial need and constituent unit costs.

Institution awards money to student based on need and determines form the award takes (e.g., tuition waiver, work-study, grant)

CAPITOL SCHOLARSHIP

1981

Financial need

Top 20% of class or 1800 SAT (on the new, 3-part test)

Attend any college in Connecticut or a state with a reciprocal agreement

Legislature determines appropriation

DHE determines awards and deposits them directly to students' college accounts in 2 annual installments

Awards range from

500-$700 (public

2-year colleges &

out-of-state schools) to $2,000 to $3,000 (all other)

CAPCS GRANTS

The legislature created the CAPCS program in 1987 (PA 87-450). The program provides financial aid to Connecticut residents with demonstrated “substantial financial need” who attend a public college or university in the state. Students must be matriculated in a degree-granting program or a precollege remedial program. They can be enrolled full- or part-time. The school can use the grants to offset students' expenses or to employ them.

Determining Total Grant Authorization

The law establishes a statutory formula to determine how much the Board of Governors of Higher Education's (BGHE) must annually ask for as the CAPCS appropriation. BGHE must request an appropriation equal to the amount UConn, the CSUs, and the community-technical colleges were required to set aside from their tuition revenues for financial aid to needy students (tuition waivers, tuition remissions, grants for educational expenses, and work-study) two fiscal years before the request year. BGHE's tuition policy determines the minimum amount each constituent unit must set aside. That policy currently calls for the units to set aside at least 15% of their projected tuition revenues (CGS 10a-164a, -77, -99, and -105).

The governor's budget does not have to recommend the level of funding the formula requires nor is the legislature required to appropriate this amount. Table 2 shows the history of CAPCS funding.

Table 2: CAPCS Funding, FY 89 to FY 06

Fiscal Year

Appropriation per Formula

Actual Appropriation

% of Formula Funded

89

$5,633,304

$5,133,304

91

90

6,376,617

5,633,304

88

91

7,678,537

5,633,304

73

92

9,600,073

5,562,888

58

93

11,626,664

5,562,888

48

94

14,417,492

5,562,888

39

95

16,775,157

5,562,888

33

96

21,371,316

5,562,888

26

97

21,371,316

5,562,888

26

98

21,678,216

8,696,397

40

99

22,155,510

11,327,414

51

00

22,308,702

14,552,940

65

01

24,300,536

19,759,261

81

02

25,563,271

19,759,261

77

03

28,997,909

17,539,728

61

04

32,218,570

16,039,728

50

05

35,744,407

16,520,920

45

06

41,342,814

16,520,920

40

Source: DHE

Determining Institutional Allocations

The law requires the Department of Higher Education (DHE) to allocate the legislature's appropriation to each institution according to a BGHE-approved formula. The formula must account for the federal financial aid students at each institution receive.

Until 1997, BGHE used the proportion of federal Pell grants awarded to each constituent unit as the basis for awarding grants. In 1989, this approach meant that each constituent unit received about one-third of

the appropriation (UConn, 33.1%, CSU, 36.4, CCs, 30.4%). By 1997, though, rapidly growing community colleges were receiving nearly half of the total appropriation even though they had the lowest tuition of any constituent unit.

The board determined this shift had reduced the program's effectiveness in addressing the statute's mandate about financial need. In 1998, it endorsed a new formula that addressed three goals: (1) ensure CAPCS funds went to students with substantial financial need, (2) address the loan burden of four-year college students without affecting basic access at two-year colleges, and (3) account for cost differences among the constituent units.

DHE's current allocation formula addresses these goals. It allocates the first 80% of the legislature's appropriation based on the proportion of unmet student need at each institution. The remaining 20% is allocated based on unmet need weighted by a tuition factor that recognizes the cost differences among the constituent units. As the measure of unmet need, DHE uses the amount each institution asks the US Department of Education (USDOE) to grant it for federal campus-based student financial aid. It reduces that amount by the value of Pell grants, Supplemental Educational Opportunity, and Capitol Scholarship grants students receive directly.

The FY 06 distribution formula also uses an in-state residence modifier to mitigate the fact that the USDOE data includes unmet need for out-of-state students. And it adjusts the distribution schedule to reflect a significant increase in federal aid to one school based on its erroneous data submission.

The FY 06 institutional allocations are contained in attachment 1. It shows that the percentage of funds going to each constituent unit has returned to the one-third for each that prevailed 15 years ago. The FY 06 distribution varies from FY 05, DHE reports, due largely to double-digit increases in unmet student need at UConn and the community-technical colleges and just a moderate increase at the CSUs.

Use of Funds

Each institution determines how to use its allocation for each eligible student's financial aid package (e.g., tuition waiver, grant, work-study). But the law requires each institution to use at least

1. 10% of its annual allocation that exceeds the amount it received in FY 87 for aid to minority students and

2. 5% of its allocation that exceeds the amount it received in FY 88 for on- or off-campus community service work-study placements.

As attachment 1 shows, 12,166 students received CAPCS money in 2005. Statewide, awards averaged $1,358. The average award varied from a high of $2,772 at Southern Connecticut to a low of $371 at Gateway CTC. UConn, with 2,971, had nearly twice as many students receiving CAPCS money as the next school (Gateway, 1,499). Asnuntuck CTC had the fewest recipients (128).

Charter Oak College

The statute requires BGHE to ask for a specific CAPCS appropriation for Charter Oak College. The request must equal 15% of the amount Charter Oak set aside for tuition waivers in the previous fiscal year. The legislature determines the appropriation, which DHE must allocate to the college for grants to matriculated students with substantial financial need. The FY 06 appropriation is $25,213; in FY 07, it is $37,393.

CAPITOL SCHOLARSHIPS

The Capitol Scholarship grant dates from 1981 when its predecessor, the State Student Achievement Grant, replaced the State Scholarship Program (PA 81-157, now codified at CGS 10a-169). It became the Capitol Scholarship Grant in 1999 (PA 98-252). Otherwise, the only significant changes it has undergone have been to raise the maximum award for in-state use from $1,500 to $2,000 (PA 87-450) and from $2,000 to $3,000 (PA 05-245).

The program provides grants to financially needy students with high academic achievement. DHE states that it is not a merit program; priority is given to those least able to contribute to college costs. During the 1990s, DHE reports, grants were limited to students from families that were able to contribute $3,000 or less. To qualify a student must

1. be a US citizen or permanent resident alien, a Connecticut resident, and a senior or high school graduate who has not earned a bachelor's degree; and

2. for a senior, be in the top 20% of his class as a junior (or upon graduation for all others); or

3. have a combined 1800 SAT score (or 1200 if he took the SAT before March 2005)

The legislature determines the program's annual appropriation based on the governor's recommended budget; no formula is involved. Table 3 shows total expenditures and awards since 1989.

Table 3: Capitol Scholarship Funding, 1989 to 2006

Fiscal Year

Total Expenditure

Total Recipients

Average Award

89

$3,008,112

3,339

$901

90

2,946,150

3,045

968

91

2,936,779

2,876

1,021

92

2,587,800

2,506

1,033

93

2,906,050

2,742

1,060

94

2,725,474

2,742

994

95

2,909,238

2,846

1,022

96

2,743,096

2,597

1,056

97

2,678,557

2,341

1,144

98

3,376,277

3,091

1,093

99

5,429,986

4,259

1,275

00

5,548,918

4,247

1,307

01

5,826,289

4,215

1,383

02

6,193,344

4,383

1,412

03

5,360,530

3,709

1,455

04

5,299,517

3,629

1,460

05

5,120,000

3,657

1,400

06

6,838,510

3,813 (est.)

1,793 (est.)

Source: DHE

DHE supplements the state's appropriation with federal Leveraging Educational Assistance Partnership (LEAP) funds. LEAP helps states provide need-based grants and community service work-study assistance.

Students can use Capitol Scholarships at any college, university, postsecondary school, or vocational institute in Connecticut and at similar schools in states that have reciprocal arrangements with Connecticut (currently, Maine, Massachusetts, New Hampshire, Pennsylvania, Rhode Island, Vermont, and the District of Columbia).

DHE, which administers the program, determines students' award amounts. Awards for the 2006-07 academic year will range between $2,000 and $3,000 for students attending public and private four-year colleges and private two-year colleges in Connecticut and between $500 and $700 for students at the state's community colleges. Students attending eligible out-of-state schools receive $500. Awards are adjusted for students who are enrolled at least half-time but less than full-time. DHE sends the awards directly to the colleges for deposit in the students' accounts. It sends half the award in the fall after the college confirms a student's eligibility and the balance in the spring after the college confirms enrollment.

SS:dw