Starting in the fall, the University of Minnesota will no longer offer free tuition to low-income students through its University Promise Scholarship.
The maximum amount awarded to eligible students will also fall from a possible $8,000 to $3,500, said Kris Wright, director of the Office of Student Finance.
The change in the program, which guaranteed free tuition to students who qualify for the federal Pell Grant, has been blamed on decreases in state and federal funding.
 âÄúWe canâÄôt continue on that trend, given falling state support and pressures not to increase tuition,âÄù Wright said.
The UniversityâÄôs Promise Scholarship program began in 2005 and guaranteed undergraduates who were Minnesota residents and eligible for Pell Grants need-based aid. In 2009, the program expanded to guarantee need-based scholarships for undergraduates who were Minnesota residents with a family income of up to $100,000.
Funds have been set aside to grandfather in current students who receive aid. They will receive either the award calculated under the new program or what they received this year, whichever is greater, Wright said.
The average University need-based scholarship award on the Twin Cities campus was $3,143 in 2009-10.
The University has set aside $30 million for students at all campuses next year, Wright said, the same level as fall 2009.
In the last six years, University need-based aid has increased following a substantial expansion of the federal need-based Pell Grant. In recent years, the federal government has expanded Pell by qualifying more students and increasing the maximum amount available to them.
Between 2005-06 and 2009-10, the number of University students receiving Pell Grants increased by more than 2,000 while the average Pell Grant awarded to University students increased by $1,176, according to University data.
Previously, the U Promise scholarship was granted to Pell-eligible students to fill the gap between their federal and state tuition assistance and leftover tuition balance. But as the federal program has expanded and state funding has fallen, the University will no longer guarantee free tuition for Pell-eligible students.
Wright said this year state contributions for student need-based scholarships were 40 percent less than they should have been, leaving the University responsible for filling a wider gap for students receiving free tuition.
Wright said the previous structure âÄúput us at the mercy of changes to the Pell program and to the state program.âÄù
First in the Big Ten
The University has the highest number of students receiving need-based grants and scholarships in the Big Ten.
Almost half of University students receive need-based aid, a 17 percent increase since 2005, according to estimated data from the University. About 35 percent of that total is funded by the University.
 âÄúIt wouldnâÄôt surprise me if we were certainly near the top,âÄù said Peter Zetterberg, a senior analyst at the University.
He said the University is an urban institution that makes a point to recruit low-income students.
Zetterberg said the University âÄúmay be needier than most,âÄù but he is not sure whether other schools are using the same standards while reporting data.
Most other Big Ten universities saw a small increase from 2005 to 2010 in the number of students receiving need-based aid. Three saw slight decreases, while Ohio State University cut more than 10 percent of the number of need-based scholarships by 2009-10.
Purdue University saw an increase of more than 20 percent of students receiving need-based scholarships and grants, bringing its 2009-10 total to include about a third of its students.
Pamela Horne, the assistant vice president for enrollment management and the dean of admissions at Purdue, said a greater portion of students demonstrated greater need in the last few years due to the federal expansion of the definition of âÄúneedâÄù and the economy.
She said Purdue tries to compensate for the percentage of tuition that was raised.
âÄúWhenever we raise tuition, we put a similar, if not larger, portion percentage-wise into the financial budget for need-based aid,âÄù Horne said.
She said Purdue has created programs to help students whose socioeconomic status has changed mid-year, like if a parent loses a job.
But Horne said Purdue is concerned about cuts in federal and state aid programs because âÄî like it has been at the University âÄî it would be âÄúdifficult to make up the difference.âÄù