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State grants drain school funds
For the first time in the last five years, Nick Blonigen, 22, will be without work study.
He, like many other students, will have to depend on outside sources to support his education because all of Minnesota's work study funds, totaling $12.4 million were reallocated to compensate for the state grant shortfall.
Higher Education Services Office (HESO) does a monthly projection of the amount of funds that are needed for state grants, work-study, and childcare for public and private colleges and universities in Minnesota.
In May they estimated that state work study had $12.4 million and state child care $4.7 million. However, $11 million was needed for state grants. This figure was given to the state Legislature in the last session.
Legislature granted $5 million to compensate for the loss. When the projections came out for July, HESO reported that even with the $5 million they were now $16 million short.
According to HESO Director of Communications and Legislative Services, Phil Lewenstin, the demand for state grants exceeded the funds because more low-income students applied for them this year.
In the past, HESO overestimated the amount of money needed. However, eligibility for state grants has recently widened.
State grants will now pay for up to 15 credits and certain required fees for up to five years.
The current economic status is causing more people to go back to school. Therefore, more people applied for grants and with the new eligibility more were accepted.
"The law was changed to allow HESO to rob work study and childcare to fully fund the state grant program," said SCSU Director of Scholarships and Financial Aid, Frank Loncorich.
"I would have preferred they (Legislature) stall widening the grant eligibility until there was enough money to fund it," he said.
However, according to Lewenstin, HESO was required to grant full scholarships to all eligible applicants.
A law was passed directing HESO to transfer funds from work study and childcare if need be.
"By the law that was passed, the direction was to make full state grant by July 1," said Lewenstin.
According to Rep. Joe Opatz (DFL-16A), the $16 M estimate was not given to the Legislature until two weeks after session was over, at which time nothing could be done.
"It was based on a recommendation by HESO," Opatz said. "This wouldn't have happened if (HESO) had done their job better."
SCSU's state work study funds of $1,179,735 was completely drained. The 600 on campus work study jobs were all affected.
"I really feel badly for all of the students that depend on work study and fill vital rolls as lab techs, computer aides, and department assistants," said SCSU director of scholarships and financial Frank Lonchorich.
Students are usually awarded work study through September but this year SCSU stopped taking applications in June and all positions were awarded by August 10. Many returning students who did not apply before the early deadline will not get work study. In addition, remaing work study hours have been cut.
An added concern is that with the money reallocated more of the funds end up in private colleges. Even though only 25 percent of state grants are given to students attending private colleges, 54 percent of state grant money goes into private colleges. Public colleges usually claim most of the work study and childcare funds. With the elimination of work study and drastic reduction of childcare less funds are going into public schools.
In addition, 75 percent of the childcare funds were cut. SCSU had $202,300 to grant to students in need of childcare. That was reduced to $32,000.
"Students who used to rely on childcare grants will have look elsewhere for affordable childcare," said director of the Lindgren Child Care Center Debra Carlson.
The issue will go back to legislation in January, but will most likely not be resolved until next spring. In January the Legislature will be looking at an estimated debt of $30 to $40 M.
SCSU assistant vice president of administrative affairs Diana Burlison said, "My concern is that they will reallocate money from MnSCU or the U of M. That's like taking from the left hand and giving to the right. That's not the answer."
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