SHEEO Member Highlight: Grant Stacking in West Virginia
West Virginia has for many years had both a merit based financial aid program and a need-based program. These programs operated independently of one another and could not be used simultaneously by a student. Recent legislative changes have allowed these programs to be “stacked” and used by a student who has financial need but also meets the criteria for the merit program. The net result has been that more high performing students with need are getting the funds they need to enroll and progress. The impact to the state has been that more high performing graduates are staying and contributing to West Virginia’s economy and society.
The West Virginia PROMISE Scholarship and Higher Education Grant Program (HEGP) are state financial aid programs funded through general revenue (both programs) and state lottery proceeds (PROMISE). The West Virginia Higher Education Policy Commission (Commission) oversees six state-supported postsecondary aid programs that serve undergraduate and graduate resident students attending public and private, two- and four-year institutions within the state. Of these programs, PROMISE and HEGP are by far the largest – awarding $47,161,143and $40,794,859, respectively, in aid during the 2012-13 academic year.
West Virginia was impacted by the effects of The Great Recession toward the close of the economic downturn. While many states are bouncing back from early cuts to postsecondary spending, cuts are just now affecting public higher education in West Virginia. Despite statewide budget reductions in recent years, the Governor, Legislature and Commission have worked together to protect student aid programs.
Those programs include the PROMISE Scholarship Program, a merit-based award that has awarded more than $400 million to more than 35,000 students to cover the cost of tuition and fees at eligible West Virginia institutions since its inception. West Virginia is one of a few states to invest equally in merit-based financial aid, through PROMISE, and need-based financial aid, through grants.
PROMISE was established by the West Virginia Legislature in 1999, but not funded until 2001, with the 2002-03 fall academic cohort receiving the first awards. PROMISE is a merit-based financial aid program designed to: (1) improve high school and postsecondary academic achievement through scholarship incentives; (2) promote access to higher education by reducing costs to students; (3) retain the best and brightest students in West Virginia; and (4) create a more educated workforce, which, in turn, will lead to stronger and more sustainable economic development. For students who began receiving the award prior to January 1, 2010, the scholarship amount is full tuition and mandatory fees at public postsecondary institutions and a comparable amount at West Virginia non-profit, independent institutions. Students who began receiving the award after January 1, 2010 receive annual awards up to $4,750 to cover the cost of tuition and mandatory fees at public or non-profit, independent institutions in West Virginia. Awards can be used in conjunction with other forms of state, federal, and institutional financial aid.
Despite a relatively small increase in recipients between 2007 and 2011, the cost of the program has increased by more than $7 million. The increase is largely due to increasing tuition costs at the public four-year institutions and the number of "grandfathered" students who received full tuition and fees before the award was capped in 2010 for incoming cohorts.
The West Virginia Higher Education Grant Program (HEGP), established in 1968, is a need-based financial aid program designed to ensure that West Virginia students with financial need are given an opportunity to pursue postsecondary education. The grant may be renewed until the student's course of study is completed, but may not exceed an additional three academic years beyond the initial award or once the student has met the requirements for a bachelor’s degree. Students must file a FAFSA each year to be eligible for renewal. Awards are based on demonstrated financial need and generally may be used in conjunction with other forms of state, federal, and institutional financial aid.
Unlike the PROMISE Scholarship, HEGP has experienced dramatic growth from 2007 to 2011. During 2011-12 academic year 19,506 students received an HEGP award. The number of recipients has increased by 68.3 percent from 11,588 during the 2007-08 academic year. The dramatic increase is a result of the elimination of a separate application for the program and awards are now allocated to students who completed the FAFSA by April 15 each year.
When PROMISE was initiated during the 2002-03 academic year, stacking the grants was not permitted. The legislative rules for both grants only allowed for monies to be applied to tuition and fees. At that time, PROMISE met full tuition and fees, so even if a student was awarded HEGP, it could not be applied. During the 2003-04 academic year, the legislative rules were changed to allow qualifying students to use "extra" HEGP funds for qualifying educational expenses, but only Pell eligible students could receive both. This continued till the 2009-10 academic year, when the Legislature allowed students to receive both grants as long as the student demonstrated financial need.
By allowing stacking of need-based and merit-based scholarships, West Virginia is able to leverage limited resources to help the state’s best and brightest students afford higher education so they do not have to be burdened by significant student loans. With state budget cuts, level funding for financial aid and resulting increasing tuition, the ability to stack aid programs has given West Virginia the ability to continue to make higher education affordable to high-achieving students who are also financially needy. In both 2010-11 and 2011-12, 33.8 percent of PROMISE recipients also received the need-based Higher Education Grant. This has increased from 19.4 percent in 2007-08, when only those who were Pell eligible could stack PROMISE and HEGP. It is paying dividends – with work participation rates for graduates who received a PROMISE Scholarship (59.6 percent) or HEGP (65.5 percent) being well above the overall rate of 47.8 percent.
A recent long-term study of the initial cohort of PROMISE students shows the program is meeting its primary goal. The study found that 70 percent of the first PROMISE recipients who graduated in 2003-04 were working in the state in 2012.
Currently, there are no plans to change eligibility requirements in either of the grant programs. Nor has there been any discussion among members of the Legislature to limit the ability to stack state financial aid. However, as public institution tuition costs continue to increase in West Virginia, and across the nation, the question before the Commission, the state Legislature, and the people of West Virginia is how relevant and impactful they want these programs to remain? Moving forward, the Commission will continue to keep stakeholders well informed of how these aid programs are meeting the needs of West Virginia postsecondary students and their families.
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