College students seeking financial aid through the Pennsylvania State Grant Program could be getting less in the next few years.
The Pennsylvania Higher Education Assistance Agency was able to avoid cutting the amount of the award this coming academic year, but it may come at a cost for the future.
PHEAA makes money by helping students manage their financial aid. Any excess earnings they make they use to help supplement the State Grant Fund. But, with money tight, they may not be able to supplement the fund in the coming fiscal year.
Last year, Pennsylvania contributed $237 million to the State Grant Fund. PHEAA supplemented that with an extra $87 million.
Media Relations Director for PHEAA, Keith New, says, “That’s a substantial amount of money. It provides grants for an awful amount of additional students.”
But, for the next academic year, money is tight and PHEAA planned a smaller supplement of $50 million. Add to that an extra 16,000 students coming into the program and the maximum award granted would drop by more than $700.
New says, “And that’s a pain point for a lot of students.”
Last week, PHEAA’s Board of Directors decided to take $50 million in reserves for the following year and combine it with the $50 million for the next academic year to deliver a total of $100 million to the fund.
New explains, “So, we’re not going to see any reductions in awards, typically, for any students this year. So, that’s good news for anybody… Now, the risk is, looking forward to 2019-20, we’re not projecting a supplement, based on our earnings.”
Keith says PHEAA is now working to find ways to increase revenue so they can continue to contribute to students in Pennsylvania in the future. Keith New says there’s also work done to try to reduce spending on the state side, so hopefully, the state can increase its contribution to the fund in the 2019-2020 school year as well.
–Matt Heckel, JET 24 Action News