OTHER VOICES

Poor move cuts grants to low-income students

Posted Aug. 22, 2013, at 2:31 p.m.
College-oriented merchandise line the aisles at the Target store on Nicollet Mall in Minneapolis, Minnesota.
Glen Stubbe | MCT
College-oriented merchandise line the aisles at the Target store on Nicollet Mall in Minneapolis, Minnesota.

To curb growing costs, the University of Virginia plans to reduce by a projected $6 million per year grant money given to low- and middle-income students. To compensate, it will increase the number of federal, need-based loans available to those students, which will be supplemented by the normal streams of federal grant aid, state financial aid and work study. The decision is yet another sign that public higher education institutions, facing diminished state funding, are charging students more and helping them less.

University of Virginia’s financial aid program, AccessUVa, began almost 10 years ago with the aim of increasing socioeconomic diversity at the state’s flagship campus. It was intended to help cover the cost of college for undergraduates from families making less than twice the federal poverty line. Today, the program reaches more than one-third of students and costs more than $40 million per year, a substantial percentage of which is provided by tuition paid by other students.

University President Teresa Sullivan announced the change in an email to staff and students. To make up for the trimmed grant money, federal need-based loans will be made available to low-income students with a cap of $28,000 over a four-year period. The projected loan amount for an in-state student is $14,000 for four years. Anticipating concerns about rising debt burdens, Sullivan cited University of Virginia graduates’ relatively low levels of debt — about $11,700 for 2012 graduates compared to the national average of almost $27,000. At the same time, only 27 percent of in-state students graduated with any need-based loan debt in 2011-12.

But Sullivan’s email obscured what is really happening. She described eliminating grant money as “moderat[ing] costs” and never explicitly stated the $6 million saved would come from reduced grants. Logic suggests the University of Virginia Board of Visitors and university administrators gave unappealing balance sheets a hard look and saw increasing student debt, softened by the federally subsidized nature of the new loans the university will offer, as the only place to turn.

Universities nationwide find reducing costs on their to-do list. University of Virginia, like its peers, must experiment to cut costs without unduly burdening students or harming the quality of the education it offers them. But if the school prioritizes providing need-based financial aid, its latest decision was not centered on that mission. In the one year it will save a mere $6 million on grant money, University of Virginia could have aggressively pursued non-academic building and maintenance cost-saving measures, as well as donations to enlarge AccessUVa’s endowment. It also could have reduced the financial aid offered to middle-income out-of-state students.

For Virginia students and their parents, in-state tuition constitutes an automatic subsidy, regardless of need. Limiting or scaling that subsidy for students from wealthy families would be preferable to replacing grants with loans for low-income Virginia residents.

The Washington Post (Aug. 18)

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