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CCHE alters financial aid as demand rises

Needy college students across Colorado will continue to struggle to land financial aid from the state next school year, as their numbers keep growing while the pot of money available to help them keeps getting smaller.

But those attending for-profit proprietary schools will see the biggest hit.

On Friday, the Colorado Commission on Higher Education approved a one-year revision to the financial aid allocation formula, which dictates who gets what slice of the $73.2 million financial aid pie. Under the new formula, aid available to students of the for-profit schools in 2012 will be cut by 30 percent from 2011 levels.

In addition, aid available to graduate students will be reduced by 10 percent. Together, those two pools of money add up to just over $1.5 million that will be put in the pot to help to undergraduate students at state schools and non-profit private schools.

The undergraduate assistance money will then be allocated to individual schools to divvy up among their students. But based on the current model, schools that are growing the most rapidly – by and large, the community colleges – would get larger chunks of aid, at the expense of the slower-growing four-year schools.

That means that while more money would be available to entice needy students into college, less money would be available to keep them there until they graduate.

Rather than see students at the state’s premier institutions lose enormous chunks of available state aid – up to 36 percent in the case of Colorado College and 23 percent for Colorado State – commissioners also capped the reduction that any school could suffer at 15 percent.

Many options, none good

“There are any number of ways to do this, none of them fair,” said Celina Duran, the state’s Financial Aid Administrator, in presenting commissioners with four separate models of aid allocation, each causing varying degrees of financial pain to the state’s higher education students and institutions.

“There is no good solution,” she said. “To fund the currently approved model for 2010-11 levels of financial aid would require an additional $26 million, which we just don’t have. And that’s just for undergrads.”

“It essentially punishes those institutions with the highest growth of needy students, and rewards those institutions with the lowest growth in needy students.”
Nancy McCallin, president, Colorado Community College SystemShe noted that all institutions will receive less funding per student in 2012 than they currently get: “A challenge has been to balance the competing interests of predictability for students currently receiving financial aid while acknowledging rapid and substantial growth,” she said in a briefing paper prepared for commissioners.

But by limiting the damage done to the students at the four-year schools, that means community college students won’t get the extra financial aid their burgeoning numbers really should entitle them to.

“The models with the ‘hold-harmless’ provisions put in place a value on which students the state deems it most important to retain,” said Nancy McCallin, president of the Colorado Community College System.

“It essentially punishes those institutions with the highest growth of needy students, and rewards those institutions with the lowest growth in needy students.”

McCallin and several community college students urged the commission to adopt a model that didn’t limit the reduction in aid at the slower-growing schools, thereby growing the pot for community college students.

Some far-reaching implications of aid cutbacks

But Ajay Thomas, who is working on a joint M.D./Ph.D. degree at the University of Colorado School of Medicine, reminded commissioners that the average medical student at that school will graduate $140,000 in debt.

“It takes twice as long to pay off your debt if you’re a primary care provider than if you’re a specialist,” he said, reminding commissioners that the decision to cut graduate student aid could well impact the future of health care in Colorado by further curtailing the number of young doctors practicing primary care.

“State financial aid is a small but critical factor in alleviating that debt burden. It makes a difference.”

Commissioner Larry Beckner, a lawyer from Grand Junction, acknowledged Thomas’s point. “The medical school – what can we say? That’s the true elephant in the room. We have to have a top-grade medical school, and we need to support it dramatically, and we’re not capable of doing that with the present funds we have.”

Of the possible models presented to the commission, all cut assistance to graduate students by 10 percent. One model rejected by commissioners cut assistance available to the students at for-profit schools by 50 percent. Another rejected model limited the reductions the four-year schools could experience to 10 percent.

For more information:

See all four Financial Aid Allocation models under consideration by the Colorado Commission on Higher Education. Model B was the one eventually chosen.

This appendix shows the impact of the various models on each of the public and non-profit private schools in Colorado.

Here’s a background piece on financial aid allocations prepared for CCHE members in September.