By a vote of 43-7, the Senate yesterday passed a budget bill (SB 1073) that Senate leaders labeled as an “imperfect compromise.” The bill provides significant increases in higher and basic education. However, the Senate bill decreases the PHEAA grant line item which may be supplemented by additional funds from PHEAA of $50.0 million, bringing the total supplement to $125.0 million and total funding for PHEAA grants to $430.2 million. The total PHEAA grant program would grow under the Senate program by about 2.5%, while the total budget growth is about 4.5%.

The House passed a bill (HB 1460) out of the Appropriations Committee that is expected to be voted on today. The House bill funds the PHEAA grant program at $362.1 million or a 5% increase in funding, with only $75.0 million in augmentations from the PHEAA agency for a total of $437.1 million.

Both bills fund the Ready to Succeed Scholarship (RTSS) program at $5.0 million, the same level as the previous fiscal year. The House bill provides an additional $1.2 million for the Institutional Assistance Grants, or a 5% increase, while the Senate bill only offers a 2% increase for this appropriation, or $732,000.

The budget may be closer to completion but how this is accomplished is not clear. A greater reliance on PHEAA’s augmentations, as suggested in the Senate bill, creates uncertainty about the future of PHEAA grants. AICUP’s focus is always on fair and equitable treatment for student aid. Student aid for low and middle income students should be funded at least at the same level as institutional funding in whatever budget bill passes.

Both the House and Senate are backing away from the RTSS program while increasing institutional funding for public universities and colleges by 5%. RTSS receives no additional funding in either budget even though this program targets grant funding to middle-income students at all public and private colleges and universities. RTSS provides a merit component and starts in the second year so it aids in retention. Approximately 8,300 eligible students did not receive an award in 2014 due to insufficient funding. Additional resources are needed to reach more eligible students for this program.

Did you know?  PHEAA’s website features an excellent resource on “frequently asked questions” pertaining to the budget impasse and state grants. Private colleges and universities appreciate the support and partnership with PHEAA.