State, federal grants add to widening tuition aid gap

As grants are need-based, many are left with no aid.

Cali Owings

For University of Minnesota junior Ali Pederson, paying for college was so easy a baby could do it.

When Pederson was an infant, her mother entered her into a contest sponsored by a prenatal vitamin company, and she won $50,000, enough to cover all four years at the University.

But most University students have to take out loans or rely on federal aid to finance their education.

The cost of higher education at public four-year institutions increased 7.9 percent in 2010-11, an average increase of $555 from 2009-10 according to the College Board Advocacy CenterâÄôs Trends In College Pricing report. An increase in grant aid in 2009-10, most notably the Pell Grant, is widening the gap between students who do receive grant aid and students who pay the full published price, according to a second report on Trends in Student Aid.

Federal grants made up 26 percent of undergraduate student aid in 2009-10. Kristine Wright, director of the Office for Student Finance, said 6,019 University students received federal Pell Grants for 2008-09. In addition, the number of students eligible for Pell Grants increased by nearly 10 percent from 2008-09 to 2009-10.

The number of students served by the Pell Grant has increased because the Student Aid Fiscal Responsibility Act of 2010 increased the maximum expected family contribution cut-off and maximum grant award amount.

Other sources of grant aid include state, institutional and private or employer aid. In Minnesota, state grants are almost completely need-based, according to the report.

The Minnesota Daily conducted an informal survey of 50 undergraduate students to determine ways in which they are paying for college. More than a third of students responded that they had received grants for 2010-11.

Wright said the University awarded more than $44 million in merit- and need-based grants and scholarships in 2008-09.

The University has two institutional grant programs âÄî the U Promise Free Tuition Scholarship, previously called the FounderâÄôs Free Tuition Program, and the U Promise Middle Income Scholarship. These programs are available to Minnesota residents only. Students are automatically considered for these programs if they are a student at any University campus and complete the Free Application for Federal Student Aid.

Students are eligible for the free tuition program if they are eligible for a Pell Grant and their total state and federal awards do not cover the cost of tuition and fees.

In the survey, one senior said she qualified for the FounderâÄôs Free Tuition Program last year. But this year, when she contacted One Stop Student Services, she was told there were fewer grants available.

StudentsâÄô eligibility is determined by their Expected Family Contribution. Wright said if a student was not eligible for the program, it was probably because of changes to the EFC.

EFC is calculated by measuring student and parentâÄôs income and the value of assets such as farms, small businesses and homes.

Wright said calculations for EFC might change to exclude assets since studies show that in most cases, owning a home or a farm does not indicate that a family can afford a studentâÄôs education.

Most students surveyed said their parents were helping them pay for some part of college, and half of those students said their parentsâÄô money went directly toward part or all of tuition.

Some parents have made arrangements with their student to only pay for part of their education, like the first year or housing. One first-year student said he has arranged to pay his parents back.

The College Board report did not address how many students worked to support themselves through school, but more than 50 percent of students surveyed said they were working.

Respondents said their work wages did not usually go directly toward educational costs like tuition and fees, but toward living costs like food, rent, school supplies, transportation, clothing and leisure.

First year Paul Lueders said he earned money for college in high school through his own computer repair business, but it mostly goes toward pocket money.