Budget Cuts Reduce Financial Aid

SPRINGFIELD – With the 2002-2003 academic year due to begin in just weeks, as many as 12,000 of Illinois’ neediest college students will be told that as a result of state budget cuts, they will no longer be eligible for state financial aid. Thousands more students will learn that the amount of aid they will receive under the State’s need-based Monetary Award Program (MAP) will actually be less than the grants they received last year.  For the 2002-2003 academic year, overall funding for the MAP program administered by the Illinois Student Assistance Commission (ISAC) will total $333.2 million, $38 million less than the funding provided by the State for the 2001-2002 academic year. Never in its thirty-two year history has the program sustained such a substantial year-to-year reduction.

To deal with this issue, the board members of the Commission convened a special meeting on Friday, June 28. Among those in attendance at the meeting to express their concerns were students, college presidents, financial aid administrators representing public and private postsecondary institutions, and individuals representing the interests of adult learners. The purpose of this special meeting was to approve a formula for distributing available FY2003 MAP dollars to eligible students.   

Under the 2002-2003 allocation formula approved by the Commission, the $333.2 million appropriated by state lawmakers is expected to provide grants to about 128,000 students, with the average grant totaling $2,590.  Again, relative to last year, roughly 12,000 students will lose their eligibility altogether. 

Of those 12,000 students, about 7,000 will lose their MAP eligibility just as they are attempting to complete their undergraduate studies. In order to save $20 million, state lawmakers directed the Commission to eliminate “fifth-year” MAP eligibility in FY2003.  Until this change, students demonstrating financial need could receive MAP grants for the equivalent of up to five years of full-time undergraduate study. 

In addition, the Commission acted to reduce all announced 2002-2003 MAP grants by five percent below their calculated eligibility.  Without this five percent cut, the MAP program would have depleted its funding by mid-July, providing approximately 120,000 MAP grants, as compared with 140,000 last year. With the five percent cut, the Commission expects to be able to continue making new awards through mid-August. The five percent reduction for all grants will generate an estimated $17 million, which will enable the agency to award 128,000 MAP grants for the 2002-2003 academic year--8,000 more than would have been possible without the five percent reduction.

Commenting on the Commission’s action, ISAC Executive Director Larry Matejka said, “With this action, students will at least be able to apply up to the time they are registering for classes in August.” 

Application volume for the 2002-2003 MAP program is already up almost eleven percent this year overall, with volume running almost twenty percent higher than last year at community colleges and proprietary institutions.  This sharp increase in volume is attributed to the sluggish economy.

Matejka also expressed concern about the impact of the State-mandated elimination of fifth-year MAP eligibility. “The school year is about to begin,” he said, “and these students are faced with a loss of grant aid that in some cases exceeds $4,000, just as they’re attempting to complete their undergraduate studies. It will be very difficult for them to fill the gap left by their loss of MAP eligibility.” The Commission urged colleges and universities to take whatever actions possible to assist these students through alternative sources of financial aid.

The Chairman of the Commission, J. Robert Barr, commented with concern at the meeting on how the five percent award reduction would be compounded by the steep tuition increases many students will be facing this fall.  However, he also emphasized, “As demoralizing as this situation is, we have to remember that MAP remains one of the most generously funded programs of its kind in the nation. The State of Illinois has always been very supportive of student financial aid and this agency.” 

ISAC will be working with colleges and universities to ensure that impacted students are aware of how they are affected, particularly those fifth-year students who are losing eligibility altogether. Students with questions regarding their overall financial aid eligibility are advised to talk with a representative of the Financial Aid Office of the institution at which they are enrolled. Specific questions regarding the MAP program can also be directed to an ISAC Client Services Representative, toll-free, at (800) 899-ISAC (4722).

About ISAC
The Illinois Student Assistance Commission is the State’s centralized provider of financial assistance aimed at helping students and families access postsecondary education and/or training. Each year, the Commission awards an estimated $400 million in scholarship and grant aid to nearly 185,000 qualified students, and also provides an additional $740 million to borrowers through its student loan programs. The agency offers credit-based alternative loans, a 529 prepaid tuition program known as College Illinois!, and a broad array of outreach and informational services to ensure that families have access to the information they need to pay for a college education. More information is available by calling toll-free 800.899.ISAC (4722) or visiting the agency’s Web site at www.collegezone.com.