AUSTIN, Texas (AP) -- The popular Texas Grants financial aid program needs a lot more money if the state is going to keep up with the goal of helping poor students get the degrees they'll need to work, education officials say.
Texas education officials see two trends: growing numbers of poor students who will want to go to college and increasing demand by employers that workers have some level of college education. But lawmakers for the first time cut funding for the Texas Grants program in 2011, leaving it able to cover only about 59 percent of eligible students.
The mission of the Texas Grants program "is simply not sustainable" without more money or changes in how awards are granted, Higher Education Coordinating Board Commissioner Raymund Paredes told state lawmakers this week.
Created in 1999, the Texas Grants program has spent more than $2 billion in financial aid and helped 300,000 students.
The Higher Education Coordinating Board has asked the Legislature to put $164 million back into the program over the next two years or take other steps to drop the average award almost in half and require students to enroll in a minimum of 12 hours per semester. That could allow the state to spread the money around to more students.
After a decade of soaring tuition costs in Texas, "this is a critical time for higher education to remain affordable and available," board Chairman Fred Heldenfels told lawmakers.
State figures show that about 60 percent of children enrolled in Texas public schools now qualify as economically disadvantaged. And according to a national study by Georgetown University, 65 percent of jobs in the U.S. will require some level of postsecondary education by 2020. That's compared with just 28 percent in 1973.
Compounding the problem is the soaring cost of education. Texas deregulated tuition rates in 2003, allowing campuses to set their own, and since then the average student at a state university has seen their tuition and fees jump by 55 percent.
Those factors put the state economy at risk of "decades of declining competitiveness" if lawmakers don't act, Heldenfels said.
Sen. Judith Zaffirini, D-Laredo, who has championed Texas Grants, was doubtful the program would get all the money officials want, but is willing to consider the proposed changes to how grants are awarded.
"In my dreams, I would fully fund Texas Grants ... but that's not likely," Zaffirini said.
If lawmakers leave the program in its current form and funding, Texas Grants would cover only about 18 percent of new eligible students. Boosting funding would help the program cover up to 71 percent.
Students can use Texas Grants to attend any public college or university in the state. The maximum award possible is $7,400 per academic year to cover a student's total school costs, which can include transportation and clothing, as well as academic cost.
The coordinating board is already encouraging schools to limit grants to academic costs such as tuition and course materials. Writing that approach into law would drop the average award from $5,000 to $3,000. The board also wants to cap awards at eight semesters.
Even without more money, those changes could help thousands more students get some share of Texas Grants, the board says.
Critics warn the proposed changes could hurt students who attend colleges in cities where the cost of living is higher, such as Austin, Houston and Dallas.
Sen. Rodney Ellis, a Houston Democrat who passed the original Texas Grants bill 14 years ago, opposes reducing the award cap, even if it helps get money to more students. The program needs more money, Ellis said.
"It's not like reducing the amount of the grant does anything to reduce the actual cost of school. Someone would have to make up the difference, either the schools or the student," Ellis said.
Capping the grant to eight semesters could hurt some students who work and may need more time to graduate, Ellis said.
Zaffirini said lawmakers have been reluctant in the past to make big changes to a program that has been a successful pathway to college for poor and lower-middle income students.
In 2011, lawmakers changed Texas Grants from a first-come, first-served basis to one that gave priority to top academic performers who qualified financially. That change, which will begin with the 2013 fall semester, came after trends showed that about half of Texas Grants students don't graduate within six years.
"Every time someone recommends a change, it's very controversial," Zaffirini said, noting she opposed the priority grants model for years until sponsoring it herself in 2011
"We had to be realistic," Zaffirini said. "We prioritized to help the students who were most qualified to excel."
- Financial Aid