State Deficit leaves grant future in question

Ratio of students who could lose financial aid through the TEXAS Grant next session due to the projected $58 billion state budget deficit.

The largest financial-aid program in Texas may face drastic cuts in the upcoming legislative session due to a state-budget deficit that could range from $18 to $25 million.

State officials requested in a May 27 memorandum all state agencies submit a budget proposal reflecting a possible 10-percent reduction, in addition to a request for general-revenue funds.

As a result, the Toward Excellence, Access and Success Grant may be available to 24,000 fewer students over the next two years, according to the Formula Funding Recommendations for the 2012-2023 Biennium proposed by Dr. Raymund Paredes, the Texas commissioner of higher education.

"I think the TEXAS Grant is a headline program for providing financial aid for students in our state," A.W. "Whit" Riter, member of the Texas Higher Education Coordinating Board and the University development board, said. "We don't currently have enough money allocated to fund all the needs in the state. So obviously, if TEXAS Grant is cut, it will hurt students who depend on that for part of their education."

The Texas Legislature passed the grant in 1999, to help ensure high-school graduates receive funding for higher education, and since then, it has awarded up to $6,080 per academic year for public university students who meet the income and merit requirements.
The grant, established as part of the Closing the Gaps program, aims to increase student success and participation in Texas by providing higher-education financial aid.

"One big goal is closing the gap," Riter said. "The key to that is ensuring students can afford higher education, and the TEXAS Grant is a landmark for that. There's concern from all advocates for higher education of what this will do to young people's ability to afford to attend a university."
Riter said the cuts may be a challenge for students and citizens and could impact tuition in the future.

"The next session is when they will finally get the state deficit and will start looking at different areas like financial aid for students and direct appropriates made to universities," he said. "Obviously, as a member of the coordinating board, I am very concerned about that. We don't want to cut anymore than has to be cut."

Rep. Leo Berman of Tyler, member of the state House Committee on Higher Education, said there are several higher education institutions in Tyler that provide economic benefits to the region.
"If we cut any of those programs, it's going to affect Tyler locally, but I'm going to work hard to make sure we don't cut anything from our colleges and universities," he said. "It's very important to me."
Riter said the state has had two years of growing enrollment, but the cuts could impact universities' ability to continue to grow enrollment numbers.

However, with agencies all over the state facing possible budget reductions, the formula funding recommendation states, "Business as usual is not an option. Higher education cannot request additional funding without ensuring a better return on the investment ...""If it (the cut) is $25 billion, which is the number we've been hearing, it will impact everybody in the state, including higher education because of the size of the deficit," Riter said. "I would argue all day for not cutting higher education, but the reality is we have a $25 billion deficit. Everyone in the whole state will share in that."

Dr. Gregg Lassen, executive vice president for business affairs, said the formula for the funding recommendation is being modified to adjust to the current economic situation."As budgets were decreased on the funding to universities last time, financial aid to students was increased to offset the higher tuition they thought students would incur," Lassen said. "Now that the cuts are getting larger and applying to students and schools, the idea is to try and tweak the formula."

Lassen said University officials do not currently plan to cut student financial aid."We are actually trying to figure out ways to raise external scholarship funds to increase financial aid," Lassen said. The Texas Legislature plans to vote on recommendations and proposals for all higher education funding during the session beginning in January.