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 potential tool to stem the state’s declining higher education enrollment and workforce challenges, according to a new report from the Wisconsin Policy Forum.
The report reveals that Wisconsin has not prioritized financial aid programs in recent state budgets. Instead, his 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. It also caused Wisconsin to fall even further behind other states when it comes to financial aid levels.
“State funding has changed little over the past decade, both overall and in key areas such as Wisconsin’s average grants to students,” the report said. “The result has been a sharp rise in unmet need among students and a growing disparity between those who attend institutions with the means to meet their students’ financial challenges and those who do not.”
This report follows two other recent studies by the Higher Education Forum: “Falling Behind? and “Degree of difficulty”. They laid out the challenges facing universities and public colleges in Wisconsin due to declining enrollment, stagnating state funding, and UW tuition freezes.
Now, this report reviews state and federal financial aid in Wisconsin, examining critical trends and focusing on the handful of grant and loan programs that account for the most dollars spent each year. Key findings include:
- · Government spending on grants, loans, and scholarships 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 undergraduate students receiving financial aid at all Wisconsin higher education institutions increased by 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 financial aid for undergraduate students 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.
While the design of aid programs is important, the preponderance of college education indicates that financial aid makes students more likely to enroll, stay, and graduate from college. Findings like these are especially crucial as Wisconsin faces severe labor shortages in many job sectors that require post-secondary degrees — and enrollments at colleges and universities in the state have generally slumped. decreased even more than nationally.
The report presents several options that could be considered:
Make progress without spending big bucks: Low-cost options include consolidating small aid programs scattered across various state agencies, creating a single website that could provide information on all aid programs, public financial aid for Wisconsin students, and support for students and families to ensure they complete a key federal form needed to access financial aid.
Provide an increase in block funding: At a relatively modest cost, the state could provide an increase in funding for its Wisconsin grant program based on need. It would cost just under $6.1 million to provide an additional 10%, or $204, to each of the 29,881 students in the UW system who received scholarships worth an average of $2,037 in 2021. 10% increases to students at other types of institutions would require an even smaller investment. . Some financial aid could be targeted, if desired, towards students studying in certain in-demand fields.
Linking Financial Aid to Student Costs: A key issue for financial aid levels in Wisconsin has been the fact that neither overall funding nor average grant amounts are tied to student costs. The state could remedy this by tying either total funding levels or target grant amounts for programs such as the Wisconsin Grants to an objective standard such as tuition, consumer price index or another measure of inflation.
Expand Bucky’s Tuition Pledge or consider another such program: UW-Madison already offers Bucky’s Tuition Pledge, which guarantees enough scholarships and grants to cover four years of tuition and fees for students freshman whose household income is $60,000 or less. Policymakers could consider extending the tuition promise to other UW campuses as well as extending a similar promise to low-income technical and tribal college students. They may also consider providing additional assistance to private college students.
During the pandemic, students have faced unprecedented challenges and, perhaps unsurprisingly, post-secondary enrollment and retention rates have dropped to a worrying degree. Today, an influx of federal pandemic aid and a recent unprecedented increase in state tax revenues create a unique opportunity to use financial aid as a tool to support students during this precarious time. This could increase these students’ long-term income and state tax revenue, help address some workforce challenges, and ensure a more equitable society in years to come.
This report was funded, in part, by contributions from the Herzfeld Foundation, the Higher Education Regional Alliance, the ADAMM Foundation, and the Milwaukee Regional Research Forum.
Click here to read “A Little Help: Is Financial Aid to Keep College Affordable in Wisconsin?”
The Wisconsin Policy Forum is the state’s premier source of nonpartisan, independent research on state and local public policy. As a non-profit organization, our research is supported by members including hundreds of corporations, non-profit organizations, local governments, school districts, and individuals. Visit wispolicyforum.org to learn more.