Universities say financial aid fund running short

By Jeff Amy/The Associated Press

JACKSON — Recipients of state scholarships could see their aid packages trimmed unless the Mississippi Legislature puts more money into financial aid.

That includes the more than 20,000 students who receive the Mississippi Tuition Assistance Grant. That money goes to full-time students with 2.5 grade point averages. Freshmen and sophomores get $500 a year, while junior and seniors get $1,000.

Gov. Phil Bryant proposed holding the amount the state puts into student aid level at $26.9 million. But Higher Education Commissioner Hank Bounds told lawmakers Thursday that won’t be enough to cover the costs of all the scholarships mandated by the Legislature.

Bounds also predicted that if Bryant’s budget is adopted, universities would average “double-digit” tuition increases next fall, to try to make up the cuts the Republican governor has proposed. Bounds said that universities are also concerned about retaining good professors because pay lags averages in the South.

Since financial aid was cut several years ago, officials have been using money collected from state student loan repayments to supplement scholarship funds. That’s allowing the College Board to spend more than $31 million on scholarships this year, instead of just the $26.9 million appropriated by the state.

Bounds said that nest egg is being rapidly depleted, leaving the budget short of money beginning next fall. The fund covers not only the tuition grants, but a number of other programs created by law, including those focused on teachers, nurses and physicians.

“We’re going to need more money from the Legislature to cover what we have been covering,” Bounds said.

College Board projections show that, under the amount recommended by Bryant, the financial aid fund would be almost 14 percent short of its projected needs in the budget year beginning July 1. Without more money, Bounds said the board would implement across-the-board cuts, lopping off an equal percentage of all awards.

Making the problem worse, significantly more students will eligible for state tuition grants next year, because of cutbacks in federal aid.

Low-income students who collect the maximum federal Pell Grant of $5,550 a year aren’t eligible for state tuition assistance grant. But Congress lowered the income ceiling to qualify for the maximum grant, meaning fewer people will get the full federal aid starting next fall, making them eligible to collect state grants to make up the shortfall.