Editor’s note: Idaho Education News is a state partner with the Hechinger Report, an award-winning, independent nonprofit news organization focused on inequality and innovation in education. The Hechinger Report is housed at Teachers College at Columbia University, New York, N.Y. This story is the second in a periodic series of articles Hechinger is offering its state partners.

Last year alone, more than 900,000 low-income students who applied for and were found eligible for state financial aid for college never received it, because states ran out of money, according to a new analysis of state data by The Hechinger Report.

The number is likely much higher — many states don’t keep track of the number of eligible students they turn away, even though they acknowledge that they have run out of money before all eligible students have been served.

Idaho was able to fund the majority of its scholarship applications, although close to 600 eligible students still went away empty-handed. The problem is more acute elsewhere. In 10 states — including Oregon, Kansas, Delaware and Illinois — more than half of eligible students didn’t receive a grant.

“In most states, the aid program comes from the general fund, and once it’s gone, it’s gone,” said Sarah Pingel, senior policy analyst at the Education Commission of the States. “(Legislators) are aware of the consequences, that thousands of students may not get the funding they need to afford college.”

In Maryland, more than 18,000 eligible low-income students were denied funds from the state’s need-based tuition aid program last year. In Kentucky it was more than 28,000 students, and in Florida more than 100,000, even though they applied on time and qualified for the aid.

The crisis has been stoked by years of budget cuts combined with an increased number of applicants, due to a growing awareness that good jobs require more than a high school diploma.

“When these programs were designed, it was an acknowledgment that there were low-income students who had need, and of the importance of going to college,” said Carrie Warick, director of policy and advocacy at the nonpartisan National College Access Network. “But then comes the requirement to balance budgets, and a state has to decide either to bring in more revenue or to cut. One of the easiest places to cut the budget is in financial aid.

“People may think this is just happening in their state,” Warick added. “But when you look around, you can see this is a national problem.”

Some states, such as Maine and Alabama, decide which students get funding based on whose financial need is largest. Others do it on a first-come, first-served basis, which disadvantages first-generation students, adult students and students with inadequate college counseling, since they are less likely to be aware of early filing deadlines. Other states disburse the money to the colleges, which in turn decide which students receive the funds.

The problem in Idaho

Idaho’s Opportunity Scholarship is growing — and growing in popularity. And that means the scholarship is running out of money long before it runs out of qualified applicants, as evidenced by the 2016-17 numbers.

More than 3,700 students got a share of the money. That number includes new scholarships and renewals, but also reflects an expanding program that has doubled in size and reach.

But the numbers aren’t all so rosy. All told, 577 qualified applicants were never offered money. They were put on a waiting list.

Lawmakers have tried to address Idaho’s shortage of scholarship dollars, twice. And that’s all part of a larger effort to put more than $100 million into state initiatives designed to encourage high school graduates to continue their education.

The 2016 Legislature doubled the Opportunity Scholarship line item to $10 million. That new money helped the State Board double the scope of the scholarship program — but it didn’t eliminate the waiting list entirely.

Lawmakers followed up this year, boosting the scholarship budget to $13.5 million, and allowing the State Board of Education to siphon a fifth of this money into a new scholarship catering to adults who hope to return to college. It’s too early to say whether this funding increase will be sufficient to cover every eligible applicant.

#TeamNoSleep

Most economists agree that, in order to keep growing, the U.S. economy will need more workers with some kind of postsecondary degree. It is difficult to track how many students drop out of college or simply don’t show up due to insufficient financial aid, but researchers believe that lack of aid discourages students from enrolling and creates obstacles to graduation.

Recent events in Illinois, which froze its need-based aid program in 2015 due to a budget crisis, are instructive. Public colleges reported students dropping out, taking out bigger loans and cutting their course loads. At least 1,000 students who had initially been awarded a Monetary Award Program (MAP) grant, only to have it cut, didn’t return for the 2016 spring semester.

Jocelyn Ramirez, a student at Wilbur Wright College in Chicago, is the first in her family to go to college. After losing her MAP grant, she said, she had to take two classes instead of four, increase her work hours and move back in with her parents. She now shares a bedroom with her husband and 6-year-old daughter while her 12-year-old sister sleeps in the living room. She has been working 40 to 50 hours a week as a medical assistant and hopes to graduate with her associate degree this spring, having enrolled in the two-year program in August 2014.

“My friends and I have a hashtag we use — #TeamNoSleep,” said Ramirez, 24. “With homework and my job, I usually get four to five hours a day of sleep. I’m always tired, but lots of students are in similar boats.” 

Even now that the Illinois funds have begun to flow again, eligible students are still being turned away. Last year 58 percent of eligible students — more than 168,000 — didn’t receive a MAP grant. For those whom MAP does serve, it is a very successful program: Even though low-income students nationally graduate at a much lower rate than their more affluent peers, MAP recipients graduate at about the same rate as other students at their colleges. The state doesn’t keep track of the income level or race of those turned away, but because more than half of the black and Latino populations at Illinois’ public universities are MAP recipients, the program’s underfunding has a disproportionate effect on these communities.

Funding shifts

Ramirez’ and her friends’ struggles reflect not only the effect of insufficient aid for eligible students but also the rising cost of college. As recently as 2002, MAP covered 100 percent of tuition for low-income students attending public colleges and universities. Now it covers two-thirds of the cost of community colleges and just 32 percent of the cost of public state universities.

Illinois is hardly alone. In 2017, for the first time ever, public colleges and universities in 28 states relied more on tuition dollars than on government appropriations, according to a recent report.

The spiraling costs are hitting low-income families the hardest; while tuition grew by more than 34 percent between 2008 and 2015, real median income grew by only 2 percent.

Some states have addressed budget crunches by lowering the maximum per-student dollar amounts of their grants — to as low as $700 per year. Advocates note that while some states fund all students, they may do so at very low levels, even while they have relatively high public university tuition. For example, Florida’s average grant is a few hundred dollars less than Vermont’s, but Vermont’s average in-state tuition is roughly 2 1/2 times that of Florida’s, so Florida’s grant goes much further.

Several states, including New Jersey, Minnesota, New York and Missouri, fund all eligible students.

“Not fully funding a program makes no sense,” said Meredith Fergus, a senior staffer at Minnesota’s Office of Higher Education. “The only way to achieve the impact you anticipate is to ensure that all eligible applicants can access the funds. Otherwise, students with lower levels of college and financial aid knowledge are not going to receive the benefit, and those are the students we are primarily targeting.”

Meredith Kolodner is a staff writer for the Hechinger Report. Idaho Education News reporter Kevin Richert contributed to this report.