Financial aid increasingly iffy for UA students

STAR SPECIAL REPORT
2011-02-13T00:00:00Z 2014-07-08T11:06:11Z Financial aid increasingly iffy for UA studentsBecky Pallack Arizona Daily Star Arizona Daily Star
February 13, 2011 12:00 am  • 

Each time the University of Arizona has boosted tuition in recent years, it has boosted financial aid to try to keep a college education affordable.

Until now.

As the state invests less in the university, financial aid is on the chopping block.

To help solve the state's budget crisis, Gov. Jan Brewer wants to cut $67 million from the UA budget - a 20 percent reduction in state support on top of about $100 million in cuts over the past few years.

The UA will need tuition money to replace state dollars, leaving less to spend on financial aid. That means students who can't afford tuition without financial aid will have to borrow more, work more - or not attend.

With higher tuition and less financial aid, "maybe students will have to pay more, and maybe some students can stomach that," student President Emily Fritze said. "But it also decreases the incentive to keep these brilliant students in the state and have them continue to be leaders and help develop the success of the state in the future."

The UA will present its annual report on financial-aid spending this week to the Arizona Board of Regents, the university system's governing board. Just how much the university cuts back on financial-aid spending depends on the final state budget and the level of tuition increases the regents approve in April.

Whatever happens, it will test the university's mission to keep a college education affordable for many Arizonans.

Hikes come at bad time

A UA degree is more affordable than ever for many students, UA President Robert Shelton said.

"It's one of the principles we're built on," said Shelton, who often uses the words "access, quality and discovery" to define the university's mission.

Some evidence: The UA spent $234 million on student scholarships and grants last fiscal year - three times what it spent in 2005.

For many students, that largely covers recent hikes in tuition, which now costs 83 percent more than it did five years ago.

More students receive financial aid than five years ago, and the typical amount of aid given to a needy student is up.

For students who applied for federal financial aid, the average net price - the tuition a student actually pays after subtracting discounts - was $2,662 last year. That's a 61 percent discount from last year's tuition of $6,855.

Asking students to pay more couldn't come at a worse time:

• More students from low-income families are attending the UA. This fall, 38 percent of incoming Arizona students were eligible for federal Pell grants - almost twice as many as two years ago.

• Arizona's median household income dropped about 6 percent from 2007 to 2009, while the cost of attending the UA grew about 10 percent.

• The total cost of attending the UA - including tuition, mandatory fees, housing, food, books and other costs - was 40 percent of the median household income in 2009, up from 34 percent two years earlier.

• The UA received 20 percent more applications for financial aid this year than last year. And about 45 percent of students were found to be needy last year, compared to 40 percent five years earlier.

How aid hurts UA

The UA pays for most of the scholarships and grants it awards with tuition revenue. The discounts help to lure bright and/or needy students to the school.

The pricing strategy is complex, and the UA determines the discount each student gets.

You might compare it to customers who pay different prices for the same item at a grocery store using coupons, or airplane passengers who are on the same flight but paid a variety of prices.

UA leaders see that spending as an investment in students, but it also might be hurting the school's bottom line.

For every dollar the UA received in tuition, at least 30 cents go back to students in financial aid.

"It's a heck of a way to raise a dollar," Shelton said.

It's also one of the nation's highest tuition discount rates among public universities - and it's not sustainable, said Nick Hillman, who studies higher-education finance and policy at the University of Utah. The average discount rate for public universities is around 16 percent, he said.

Financial aid ends up competing for funds with other priorities such as salaries and buildings.

Earlier cuts have already forced the UA to be as efficient as possible, and the only places in the budget left to cut are jobs and financial aid, Shelton said.

Where students fit in

The Arizona Board of Regents will resist cuts to financial aid for as long as possible, said Vice Chair Fred DuVal.

He worries that more closely linking students' ability to pay with their ability to attend will keep talented poor and minority students out of college.

"Future classes will be more homogeneous in both income and ethnicity at a time when our population is moving in exactly the opposite direction," he said in an e-mail.

And with fewer students entering higher education, the state would be less competitive in the modern economy, he said.

With less money coming from the state, the reality is that the UA will have to make some changes - but they won't be popular.

"Students are going to be really upset," said Fritze, the student-body president. "Some students know the budget realities and some don't."

The UA is already finding ways to spread financial aid thinner, meaning smaller awards for more students.

The popular AIMS scholarship will soon have a lower dollar amount and a higher bar on academic success. More students will be asked to prove they are needy to get any financial aid. And there will be fewer of the successful Arizona Assurance scholarships for the neediest students.

To work or to borrow?

Students who don't get financial aid - or enough financial aid - will have to borrow more or work more if they want to attend college.

The average student debt at graduation from the UA was about $20,000 last year, up 16 percent from five years earlier.

And it's a lot harder to work your way through college. A student would need to work full-time at a minimum-wage job for 30 weeks to pay the tuition bill, up from 22 weeks five years ago.

"Maybe a student can get by, barely, and scrape by and take out student loans, but they may not get the full educational and intellectual experience of a university," said Fritze, who pays for college with scholarships and help from her parents.

Omar Gastelum Pina, a sophomore from Nogales studying mining engineering, is not living large. He mostly eats cereal and skimpy sandwiches.

He chose the UA because the financial-aid package he was offered would afford him that complete college experience that Fritze finds important.

"Instead of having just to work and study, I can participate more in extracurricular activities. I can go to a mine every Saturday to get more experience with mining. I can participate in clubs, like the Society of Hispanic Professional Engineers and the Society of Mining and Metallurgical Engineering. I also have time to play soccer."

Ashley Anhalt, a sophomore honor student from Tucson studying engineering and math, has her tuition covered by a UA scholarship and one from her dad's company. She works here and there doing tutoring or work at the campus bookstore.

She hopes to get more financial aid to cover rising tuition and fees. She could borrow money or hit up her parents if she were desperate, but the prospect of losing financial aid, she says, is scary.

"It definitely would hurt."

Contact reporter Becky Pallack at bpallack@azstarnet.com or 807-8012.

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