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New financial aid plan approved

Colorado’s higher education coordinating Tuesday approved a significantly changed system for allocating its financial aid funds to students at state colleges and universities.

The new system, approved on a unanimous vote by the Colorado Commission on Higher Education, focuses aid on the neediest students and is structured to encourage students to stay in school and to graduate on time.

The also unanimously unanimous approved a resolution in support of Senate Bill 13-033, which would make undocumented students eligible for resident tuition rates at state higher education institutions.

The new financial aid method is in line with goals of the commission’s recently issued strategic plan, which focuses on increasing student access, retention and completion at the state’s colleges and universities.

But the policy change won’t necessarily have a major impact. State financial aid, which overall totals about $100 million a year, is only about 5 percent of the total aid used by Colorado students. The majority of aid comes from federal Pell Grants and federal loans.

State financial aid goes mostly to undergraduate students at state colleges and many private institutions.

Key provisions of the new policy include:

  • First priority is for full- and part-time students who are eligible for Pell Grants, which are based on family income. (Individual state institutions retain some flexibility in granting awards.)
  • Elimination of “tiered” grants based on individual institutional costs and moving toward uniform awards across the state.
  • Introduction of progressively higher grants each year as students move through college as an incentive to stay in school.
  • Creation of a lifetime limit on credit hours as an incentive for college completion. (This wouldn’t go into effect until 2014-15 at the earliest, after further commission deliberations.)

The commission also hopes the new system will create more year-to-year predictability for students and financial aid offices.

The bulk of the plan goes into effect for the 2013-14 academic year. The allocations for the first year are designed so that no institution will receive less funding than it has in the current year.

The total amount of state financial aid is set annually by the legislature, but the commission has the power to allocate those funds. State budget cuts in recent years have prevented increases in aid even as the number of eligible students has grown significantly. Commissioners have been discussing reform of the system since last August.

A detailed look at tuition and fees

At its Tuesday conference-call meeting the commission also was briefed on the Department of Higher Education’s annual tuition and fees report, which covers the current school year.

The report notes that “resident undergraduate rate increases ranged from a low of 0.0 percent for students at Aims Community College, to a high of 19.6 percent at Colorado State University-Pueblo. The majority of institutions raised resident undergraduate tuition rates between 5.0 and 15.0 percent. For non-resident students governing boards increased FY 2012-13 undergraduate rates from 0.0 percent at Fort Lewis College to 9.4 percent at the University of Colorado Denver.” (FY is short for fiscal year.)

Over the last five years, resident tuition increases have ranged from a low of 26.3 percent at the University of Colorado – Colorado Springs to a high of 68.7 percent at Fort Lewis. (Five-year increases were below 25 percent at Aims and at Colorado Mountain College, which are regional institutions that receive some state funding but aren’t fully part of the state system.)

The report notes, “Base tuition increases need to be considered in light of significant decreases in state operating support. Since FY 2009-10, state operating funding has decreased by $193 million or over 27 percent from a high point of $706 million.”

At the same time that tuition rates have soared to compensate for loss of state funding, individual colleges also have raised financial aid.

For the five-year period the report noted financial aid increases ranging from a high of 250.1 percent at Colorado Mesa University to a low of 27.1 percent at CU-Boulder.

The report found a wide range of changes in student fees over the last five years. Fees increased 102.9 percent at Western State Colorado University, the biggest jump. At the other end of the spectrum, fees declined 20.4 percent at Front Range Community College.

Higher increases at several campuses often were caused by student-approved fee hikes to fund construction projects. State funding for campus construction also has declined dramatically in recent years, forcing colleges to seek other sources of money.

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