Indiana News

State Student Aid Budget Shifts Toward 21st Century Scholars

Students get same amount of aid for now, but state funds to be realigned

3/19/2013

Indiana is changing the look of its college financial aid budget.

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Governor Evan Bayh created the 21st Century Scholars program in 1990 to guarantee the equivalent of full tuition at a state university to students who maintain a C average in high school and stay out of trouble. But financial aid commissioner Mary Jane Michalak says the program's budget has stayed flat while eligibility has grown by 9% to 13% a year.

The state has filled the gap with money from other aid programs, for students who don't qualify for the scholarships or who need additional assistance to attend private schools. But Michalak says the brand ID of the 21st Century Scholars program is so strong that students sometimes think they're being shortchanged -- they don't notice that the bottom line on their aid statement adds in money from the other funds.

Both House Republicans' budget and Governor Pence's nearly quadruple the scholarship fund for the next two years, to $230 million dollars, while decreasing other funds. The overall increase in financial aid is 10% in Pence's budget and 14% in the House plan.

Even that amount falls $20 million short of state projections for the scholarship fund. Cost-control measures enacted in 2011 begin to take effect in 2016, when the state will cap scholarships at $2,500 for students who don't show financial need. Starting that year, the state has the option of reducing scholarships for all students if there's not enough money to go around. Students who registered for the program in 2011 still have the full guarantee, but the new rules will apply to all students starting with the class of 2018 -- this year's seventh-graders.

The legislature has also raised the grade requirement for the scholarship to a 2.5 grade-point average -- between a B- and C+ average. That change takes effect with this year's sophomores.

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