Lawmakers Pass Need-Based Aid Bill, What’s Next?

On the last day of Georgia’s 2018 legislative session, the Senate passed a bill that aims to help more students go to college and complete their degrees. The bill creates a need-based aid program for university system students in Georgia, primarily focusing on their financial need. This legislation represents a critical first step to help more hardworking Georgians finish their degrees and, as a result, create a more prosperous state.

The language for the need-based aid program ultimately crossed the finish line attached to House Bill 787, which increases funding for state charter schools. Pending Gov. Nathan Deal’s signature and future funding, it will expand financial resources for Georgia’s university system students. The state has long relied on HOPE scholarships and grants that target students based on grades, standardized test scores and residency requirements.

The bill lawmakers approved March 29 offered few details about how Georgia’s need-based aid will work, beyond the fact that eligible students must attend school full-time in the university system and are those “whose family income is considered economically disadvantaged.” The Georgia Student Finance Commission, the state agency that administers HOPE, will get the authority to decide eligibility requirements and award amounts. An earlier version of the bill, Senate Bill 405, defined a maximum $48,000 family income, maximum $1,500 grant per semester, minimum 2.3 GPA, standardized test score requirements and a weekly 15-hour work requirement. The legislation that passed says the finance commission can decide eligibility criteria and grant amounts “as determined to be the most appropriate for the particular qualified institution and its student population.”

Legislators raised questions and expressed concerns during hearings that will require clarification from future lawmakers and the finance commission in order for the need-based aid program to become reality:

  • Funding. The bill authorizes the program in Georgia law, but future legislators must use the budget and appropriations process to pay for need-based aid. The legislative sponsor said the intent is for the program to use state money outside of lottery funds. An analysis of SB 405 estimates its cost at $26 million to serve 16,700 students in the first year, but funding needs could range widely based on the program’s structure.
  • Eligibility rules. Need-based aid uses a student’s ability to pay for college to determine eligibility. This might be defined by family income, the so-called Expected Family Contribution calculated by federal formulas or some other way. Though financial need is the main criteria for need-based aid, students also typically must meet academic benchmarks to keep it. In other states this generally means carrying a GPA ranging from 2.0 to 2.5.
  • Award amounts. The finance commission will need to define a method of calculating award amounts, including minimum and maximum awards. Other states’ need-based maximums range from $636 to $17,900. Average need-based grant amounts differ by state, varying from $207 to $5,681.
  • Interaction with other financial aid. Agency rules will guide how state aid interacts with institutional and federal aid. For example, HOPE program rules say if a student receives both the HOPE scholarship and other financial aid meant for tuition, HOPE scholarship amounts may be reduced so that total aid will not exceed tuition costs.

Eligibility rules, award amounts and interaction with other financial aid all affect how much funding Georgia’s program will need and the number of students it can serve. Stricter eligibility requirements, like using standardized test scores or lower family income thresholds, can decrease the funding needed but serve fewer students. Using lower GPA thresholds or higher family incomes will increase the state’s cost, but serve more students. Georgia needs to adequately and sustainably fund a future need-based aid program so that the number of eligible students does not overburden the program’s funding.

As the Georgia Budget and Policy Institute described in its analysis of an earlier proposal for need-based aid, all decisions about state aid in Georgia should be guided by two primary goals:

  • Clear pathways for students with the greatest barriers to a college degree, including low-income students, first-generation students and black and Hispanic students
  • Encourage college completion

To reach these goals, the next major steps are to secure the governor’s signature, have the finance commission establish eligibility rules and for lawmakers to fund needs-based aid to make it a reality for students. The added support can help relieve financial hardships holding students back and transform the trajectory of their careers and lives.

Like HOPE before it, need-based aid can be a historic opportunity for Georgia — if state lawmakers follow through on its promise.

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