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State Financial-Aid Help for Students Improves Slightly

There are mixed signals in the new figures that came out yesterday on financial aid that states give to college students.

On the one hand, the survey by the National Association of State Student Grant and Aid Programs (NASSGAP) shows that although overall support for higher education was down, states doled out 3.8 percent more student financial aid in the academic year 2009-10 over the previous year—a total of $10.8 billion.

The amount of money spent on need-based grants grew faster than the amount spent on merit-based grants. Of the money awarded by states, about $8.7 billion was in the form of grants and scholarships, including $6.3 billion in grants to about 3 million students with financial need. This represents a 4.7 percent increase in grants (which don't have to be repaid) from last year.

Yet the generosity varied by state. Nearly half the states surveyed reduced their need-based grants, including Ohio, Michigan, Iowa, Idaho, Utah, and Alaska.

Ten states (California, New York, Texas, Pennsylvania, Illinois, New Jersey, North Carolina, Washington, Indiana, and Minnesota) collectively awarded more than $4.6 billion in undergraduate need-based grant aid, accounting for about 74 percent of all aid of this type, according to the NASSGAP survey.

"The economy is the big driver," says Justin Draeger, president of the National Association of Student Financial Aid Administrators, an association of student financial-assistance professionals in Washington. And the political and philosophical views on the use of financial aid varies by region. For example, there was in Michigan a dramatic decrease in available student aid because of budgetary constraints in the past few years. Meanwhile in Georgia, political philosophy about how you use student financial aid at the state level has always been somewhat controversial, says Draeger.

According to the survey, of the grant funds awarded in 2009-10, 73 percent was need-based, almost the same percentage as seen in 2008-09.

In a press release, NASSGAP President Vicki Merkel says state aid for students and families is the key to building the educated and capable workforce needed in the future.

NASSGAP is a professional association of agencies that administer state-appropriated financial aid.

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