Students have potential to lose $76M in state aid


Students receiving Kentucky state financial aid could receive less money over the next two years with the proposed state budget. 

Since 2009, state financial aid programs have lost $100 million from diverted lottery proceeds, and might take an additional $76 million hit over the next two years under Gov. Steve Beshear’s current budget proposal. 

WKU students currently receiving need-based aid will experience more competition for the funding and less money, according to a new study from the Kentucky Center for Economic Policy. 

The two hardest-hit state programs would be the College Assistance Program (CAP), which assists lower-income students, and the Kentucky Tuition Grant (KTG), which focuses on private college attendees. The biggest financial program offered by the Kentucky Higher Education Assistance Authority is the merit-based Kentucky Educational Excellence Scholarship (KEES) program. 

“Not only is the state failing to fulfill its own requirements — it is underfunding need-based programs even more once eligibility is taken into account,” Jason Bailey of the Kentucky Center for Economic Policy (KCEP) said. “While KEES is fully funded…CAP and KTG are awarded on a first-come, first-served basis.”

KEES funding is in no danger from the proposed budget. All students meeting the criteria for the award will be guaranteed their funds from the state.

Approximately half of the state’s financial aid goes to the merit-based Kentucky Educational Excellence Scholarship program which was created in 1998. In 2012-2013, the average award was $1,180 per year to full-time students, and KEES recipients earn up to $2,500 per year. 

By law, all but $3 million of the lottery’s revenue funds financial aid programs. However, in 2014 alone the legislature diverted $24 million to fill holes in the state budget.

An estimated $43 million will be diverted in 2016 under the proposed budget, according to the Office of the State Budget Director. 

Students may apply for state need-based aid such as CAP beginning Jan. 1 of each year, but the money typically runs out by February, greatly affecting community college students looking to transfer into one of the state’s public universities. 

Created in 1994, CAP serves as the state’s primary need-based financial aid program but only receives a third of the funding. 

Currently, the Senate is debating the budget. The House’s version passed last week and did little to change the outlook for state public universities and colleges. While elementary instructional materials and preschool funding decreased nearly $20 million in the House, that money was not reallocated to public universities. 

In a separate report, the KCEP’s Ashley Spalding noted that KEES funds typically go to higher-income students whose higher education isn’t as dependent on receiving financial aid. 

“Higher-income students are not as price sensitive as low-income students and typically will attend college whether or not they receive scholarships,” the report said. 

WKU already faces a $1.8 million budget cut under the proposed budget’s 2.5 percent decrease to public universities and colleges. 

Ann Mead, vice president of Finance and Administration, said decisions need to be made by the first week of April to prepare the budget for June’s Board of Regents meeting.

“Divisions are considering reduction scenarios, but there is nothing definitive yet,” she said.

Editors Note: the original headline in the print edition of the Herald said that $76 million in KEES could be lost. The correct term is state aid and no KEES money will be lost in the budget proposal.