Needs-Based Aid Has Not Kept Pace with Rising Higher Education Costs

| Post by Perry Papka | 

 Over the last decade, Kentucky’s investment in need-based financial aid has not come close to keeping up with public tuition or with the cost of living.

From 2008 to 2018, Kentucky saw:

• A 2% increase in funding for the College Access Program (CAP), from $60.5 million to $61.9 million
• A 4% increase in funding for Kentucky Tuition Grants (KTG), from $32.5 million to $33.7 million

• An 18% increase in the Consumer Price Index

• A 41% increase in tuition at Kentucky Community and Technical Colleges, the state’s 2-year institutions
• A 58% increase in tuition at Kentucky’s four-year regional, comprehensive institutions
• A 64% increase in tuition at Kentucky’s four-year research institutions

How many students would have used needs-based aid if it had been available? For 2017, the Kentucky Higher Education Assistance Authority estimated that:

• 28,058 more Kentucky students likely would have used CAP grants if funding had been available
• 3,777 more Kentucky students likely would have use KTG awards if funding had been available
• $43.3 million in added funding would have been required to meet likely CAP need
• $10.1 million in added funding would have been required to meet likely KTG need

For 2018, CAP and KTG are slated to receive just 40% of projected lottery revenue. State statutes call for the two programs to receive 55% of lottery dollars, but the General Assembly has regularly used budget bills to change how the money is used. Allocating the full 55% could have made another $37 million for these two needs-based programs this year. Lottery revenue grew 29% and $55 million from 2008 to 2018.

Kentucky needs to better link investment decisions about tuition, state financial aid, and support to colleges and universities. Growing needs-based aid so little while costs grow so much poses a major risk to Kentucky’s ability to equip the next generation to contribute to our economy and our civic life.

Source Notes: The Consumer Price Index increase comes from using this calculator to convert dollars from July 2007 (start of the 2008 fiscal year) to equivalent current buying power, and the Work Ready funding figure comes from HB 303, the state budget bill adopted in 2016. Tuition figures reflect analysis of public tuition data from the Council on Postsecondary Education. Financial aid figures reflect analysis of data provided by the Kentucky Higher Education Assistance Authority.