State financial aid totals grew 4.5 percent in 2019–20

Total government financial aid continued to grow during the 2019-20 school year, before state budgets and household incomes were directly affected by the COVID-19 pandemic, according to the latest report from the National Association of Student Scholarship and Government Aid Programs.

States awarded about $14.8 billion in financial aid during the 2019-20 school year, according to a NASSGAP report. This total reflects a 4.5 percent nominal increase over the $14.1 billion in financial aid granted during the 2018-19 school year, or a 2.6 percent increase in inflation-adjusted constant dollars.

Most of that total — 87 percent — was delivered to students through grants, which do not need to be repaid. The report showed that countries awarded 4.2 million grants in the 2019-2020 academic year, totaling $12.9 billion in grants. Countries paid another $1.8 billion in non-foreign aid, about half of which was in the form of tuition fee waivers. Loans, loan assumptions, conditional grants, and a work-study make up the rest of this total.

Needs-based grant aid for undergraduate students increased by $400 million during the 2019-20 academic year, to $9.3 billion.

“This year it has been a relatively big increase,” said Frank Balman, director of federal relations at NASSGAP. “I can’t get too far, because a couple of years ago we had the biggest increase in the last decade, but it’s a healthy increase and it has spread to a few states.”

Eight states — California, Illinois, New Jersey, New York, Pennsylvania, Texas, Virginia, and Washington — gave more than two-thirds of all national needs-based grant aid during the 2019-20 school year, which totaled $6.3 billion between them. California topped the group, disbursing $2.4 billion in need-based grants that year.

The report said Georgia, Louisiana, South Carolina, Tennessee and Virginia provided the most grants per capita. Meanwhile, Georgia, Louisiana, New Jersey, South Carolina, and Tennessee all provided greater college scholarship aid than full-time college admissions.

Table showing total aid awarded, by state (in millions of dollars) during the 2019-20 school year / National Association of Government Student Aid and Grant Programs

Total government financial aid varies for all kinds of reasons, Balmain said. Some states have larger populations, and therefore more students who need financial assistance. Other states see the opposite — demographic shifts have left them with fewer students, and therefore smaller financial aid budgets. For many countries, investing in student financial aid is a political and economic priority.

“These types of states have invested heavily in … goals like ‘X percent of adults have degrees or degrees at a certain age or by a certain year,’” Balman said. “These states understand that the way to move the needle is to invest in grant assistance. on a need-based basis, because that’s where you get the gradual increases in students who attend college and hopefully graduate.”

NASSGAP President Katie Harrison echoed Balmain’s thoughts in a statement.

“By increasing their investment in student assistance programs, states are demonstrating their commitment to supporting post-secondary students and their families, and to meeting current and future workforce needs,” she wrote.

Balmain said the COVID-19 pandemic — which has significantly affected state budgets and increased the financial need of many students and families — has had no impact on total state aid for the 2019-20 school year. For the most part, the financial assistance for that year was provided before the pandemic began in the United States in March 2020.

Next year’s totals could reveal how much the pandemic has affected government financial aid programs, and whether money from the US bailout has bolstered those programs.

“I am not aware of any country that has scaled back their programs” during the pandemic, Balmain said. “It will be interesting to see if the programs become more generous.”

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