The future just got cloudy for students relying on the Texas Grant to fund their education.
Under a budget draft submitted by the Texas House Appropriations Committee this week, The Austin-American Statesman reports the Texas Grant would be slashed about 41 percent as part of sweeping cuts which could impact state agencies for the 2012-2013 biennium.
Karen Krause, financial aid and scholarships executive director, said the cut’s impact would be significant at UTA, where 820 new freshmen received Texas Grant funds this year.
“For our new students, it would be fairly significant,” she said. “That would mean, for next year, that many new students wouldn’t be eligible for Texas Grants. We’ll have to make up those funds from an existing program, or that freshman class would basically be out of luck. It’s pretty drastic.”
The proposed cut would reverse a trend that has seen Texas increase its student financial aid investment from $91 million to $477 million between fiscal year (FY) 2000 and FY 2010, according to the Texas Higher Education Coordinating Board.
Federal programs, including loans and Pell Grants, will be unaffected, but Krause said the reduction could still leave some students scrambling for funds.
More on the budget cuts from Rep. Diane Patrick, R-Arlington.
As the 82nd Legislature begins to grapple with how to handle a budget shortfall of more than $15 billion, UTA stands to receive good and bad news under an initial budget proposal filed late Tuesday.According to Diane Patrick, R-Arlington, UTA’s nursing program would fall victim to the budget woes in the draft.
“It cuts $5 million in additional funds from the [Texas] Higher Education Coordinating Board grant program for the nursing program,” she said. “Frankly, a large number of grant programs in every category were eliminated, not just in higher education, but public education and others.”
On the positive side, Patrick said the preliminary budget bill does not touch the $550 million set aside to reward emerging research universities for reaching certain benchmarks en route to Tier One status. In 2009 the Legislature passed HB 51 to recognize seven emerging research schools in Texas.
In a related Tier One initiative, Patrick said the Texas Research Incentive Program, a $50 million fund to match private donations toward research, would be eliminated.
“It’s fair to say that every function of state government is affected by this reduction,” she said, adding that the bill would shave about 10 percent from formula funding for higher education.
The budget was presented by Appropriations Committee chair Jim Pitts,R-Waxahachie and does not make use of the Rainy Day Fund, which Comptroller Susan Combs estimates to contain $9.4 billion.
Patrick said she supports utilizing part of the Rainy Day Fund to help make up for the shortfall.
“In my opinion, we set aside the funds in 2009 to deal with the anticipated shortage, so I’m in favor of accessing a portion of those funds and leaving some for later,” she said. “It was set aside with taxpayer dollars to anticipate the shortfall.”
Patrick said the details of the budget will be worked out through the committees, which will probably be set in February. She said the Legislature expects to vote on a final budget without calling a special session.
“The problem is that the federal loan program cap is $5,500, and many were already borrowing that in addition to their Texas Grant funds,” she said. “It is going to be very difficult to compensate.”
Rep. Diane Patrick, R-Arlington, said the budget draft is only a preliminary document.
“It’s important to remember that this is only a starting point,” she said. “It’s a budget that assumes no new taxes or the use of rainy day funds. From this point on, it will be a matter of competing priorities.”
Journalism senior Elizabeth Page, a past Texas Grant recipient, said it’s hard to complain about the plan to cut financial aid funding.
“It’s not money you did anything to earn, so how can you be upset when it runs out?” she said. “I think it’s a shame that they have to cut education spending, but I also think there are plenty of other options out there. For the people who believe that school is important enough, they’ll figure out a way to make it work.”
The 81st Legislature approved $614.7 million for Texas Grant funding for the FY 2010-11 biennium. The new budget would cut the spending level to include only existing recipients.
Patrick, who sat on the Public Education and Higher Education committees the past two sessions, said it is yet to be determined whether the remaining funds will be available for incoming freshmen.
“While I’m glad they will continue to fund existing recipients, I have concerns about access and opportunity for future students,” she said.
Holly Treadway, education counselor for the Texas Association of Developing Colleges, a federally funded program serving low-income students, voiced similar concerns about access.
"Less grant money can mean more student loan debt," she said. "What I see is students who defer going to school if they don't have enough grant money to cover expenses."
According to the Texas Higher Education Coordinating Board, 54 percent of students with the lowest family income and expected family contribution took out loans in FY 2009.
The Legislature is attempting to compensate for a budget shortfall of more than $15 billion for the 2012-2013 biennium.
