Tax Facts: Student Financial Aid in Wisconsin Does Less to Keep College Affordable

Wisconsin Policy Forum

Total state financial aid for students at Wisconsin colleges and universities has lagged or declined over the past decade, leaving students to shoulder more of the cost of education — and undermining a tool for Stem the state’s declining higher education enrollment and workforce challenges.

Wisconsin has not prioritized financial aid programs in recent state budgets, according to a recent in-depth report by the Wisconsin Policy Forum. Instead, state leaders’ college affordability efforts have focused on maintaining a tuition freeze for the University of Wisconsin system.

This approach reduces costs for all UW students, but does not target those most in need and does not help technical or private college students.

Key findings of the report include:

  • Government spending on scholarships, loans, and grants to undergraduate students grew rapidly from 2000 to 2011, but fell 0.5% between 2011 and 2021, without accounting for inflation.
  • Even adjusted for inflation, the average unmet need of state undergraduates receiving financial aid at all Wisconsin higher education institutions increased 135.6% from $3,755 in 2000 to $8,845 in 2021.
  • The Wisconsin Medium Grant and Federal Pell Grant combined paid 91.4% of in-state undergraduate tuition at UW-Madison in 2002, but only 69% in 2021.
  • Wisconsin’s spending on undergraduate student grants in 2020 was $541 per student, 44.8% lower than the national average of nearly $980 per undergraduate student.
  • Wisconsin’s total grant aid for undergraduates increased from $107.2 million in 2010 to $120.9 million in 2020, or 12.8%. It was 36th among the 50 states. Nationally, grants increased by 46%, more than three and a half times more.

Studies indicate that financial aid makes students more likely to enroll, stay, and graduate from college. Such findings are crucial as Wisconsin faces labor shortages in key sectors — and enrollment at its colleges and universities has fallen more than nationally.

Now, the state’s unprecedented fiscal situation may create an opportunity to support students while preparing more workers of tomorrow. The report examines a few options that could advance financial aid at relatively low cost.

These include, but are not limited to: consolidating aid programs dispersed across state agencies to create a single source of information on all state financial aid programs; tying financial aid to inflation or tuition fees; increase overall funding for need-based financial aid programs or expand some need-based programs beyond flagship universities to serve students from other universities and colleges.

During the pandemic, students are among those who have faced great challenges. Now, policymakers may have the opportunity to bolster financial aid programs in ways that support Wisconsin students — and its economy — for years to come.

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