Staring Contest Part 2

Given to popularity of the discussion two weeks ago (Staring Contest) on MAP funding, Illinois Student Assistance Commission Executive Director, Andrew Davis, has prepared some facts and data regarding the state of the program. 

It is apparent to me that the MAP program is in distress. However, the question remains: How do we fix it? 

1. Sell $550MM in bonds.

2. Encourage the legislature to fully fund the program.

3. Let it sit as it is.

4. Something else?

Please feel free to discuss. 

What follows are his words. 

Tom

(9855)

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MAP Grant Funding &

Its Impact on College Access

Illinois has a proud tradition of being a leader among the fifty states in providing access to higher education for students of all income levels. The Monetary Award Program (MAP) is the critical program that has provided access for our lower and middle income students. MAP is a need based grant program that was started 50 years ago.  During the past decade, however, our ability to provide sufficient resources to enable students from lower and middle income families to attend college has been seriously challenged. Increased demand for higher education, shrinking state funds and rising college costs have come together to form the “MAP Gap.” The MAP Gap has implications that vary by sector, dependency status, and Illinois region but are uniformly negative.

The first issue is the increasing demand for financial aid. More students are attending college and the cost of doing so has grown faster than family incomes. More students seeking higher education that costs more has lead to double digit growth in demand for financial aid.

•  More people are attending college and most are seeking some type of financial aid.  Students who need financial aid fill out the Free Application for Federal Student Aid (FAFSA.) The FY2010 total FAFSA application volume was over 750,000 and an 8% increase is expected for FY2011.  Not all of these FAFSA filers are poor; increasingly middle and upper middle income families file FAFSAs to be eligible for Stafford Loans and other aid because they can no longer afford to pay out of pocket the full expense of college.
•  MAP-eligible FAFSA application volume has increased from FY2009 to FY2010 by over 20%.  Since 2000, the number of eligible applications has increased by over 50%. There will be another double digit increase in FY2011. A weak economy and an increasing need for postsecondary training to procure a job combined with the State of Illinois’s Big Goal of 60% college completion, make large increases in future demand for financial aid inevitable.

The critical problem is the failure of state appropriated MAP funding levels to keep up with demand.

• In 2000 the number of MAP grants made was about 136,700. The cost to the state was $326 million.  In 2007, 147,000 awards were made with $383 million.  Since then, although the state appropriation has increased to over $400 million, the number of awards has declined, to about 141,000 in FY2010.  A further small decline is expected this year.  The decline in the number of awards is the result of a shift in awards to students attending four-year schools from students attending two year schools.  Each award to a student attending a four-year school is on average about 3.5 times the size of a community college award.  Students who attend four-year institutions tend to submit the FAFSA earlier than students attending two year schools. So each early applicants from a four year school tends to displace 3.5 later applicants seeking funding to attend a two year school.
• For FY2011 to date, over 125,000 eligible students have had their applications “suspended” because of a lack of funds; nearly 90,000 of them listed a community college as their first choice school on the FAFSA.  In 2009, there were 60,000 suspended students; in 2000, there were none.  From FY2002-FY2008, we suspended award announcements in August; in FY2009, it was July; in FY2010, it was May; and this year, April.  This year it is likely we will suspend more students than we serve.

Not only are more students eligible for MAP grants, they are eligible for larger grants. College tuition and fees have increased dramatically during the decade while funds for MAP have not, causing MAP coverage of tuition and fees to decline.

In Illinois between 1987 and 2010:

• Community college tuition and fees grew from $791 to $2,939 - more than twice as fast as median income.

• Public university tuition and fees grew from $1,710 to $10,442 - four times faster than median income.

• Private school tuition and fees grew from $6,653 to $25,986.

• The maximum MAP grant grew from $3,100 to $4,968.

• In FY2002, the maximum MAP grant covered 100% of the average tuition and fees at a public university; in FY2010 it was 48% and this year it will be less.  The combination of a MAP grant, a Pell Grant and a Stafford loan is no longer sufficient to cover the cost of attendance at a public university for lower income students despite the big increase in Stafford loan limits over the decade. 

• Community college students, who are the most price sensitive, have seen their awards drop from 100% coverage in 2002 to 66% in FY2010.  The average MAP recipient at a community college, the most price-sensitive student with an average income of less than $20,000, has to cover at least $1,000 of tuition and fees, plus books, transportation, computer costs, etc.

Because of the increasing “gaps” in coverage, MAP claim rates for the students from the lowest income families are falling. If students aren’t claiming their awards, they are not attending college.

• Claim rates overall are falling.  FY2010 will be lower than FY2009. The chart at the right shows claim rates by a family’s “expected family contribution” (EFC) – the family’s ability to pay for college.
• For “zero-EFCs”, those students who can contribute nothing to their education, the drop is especially bad – a 4.5% drop since 2002 and they are barely claiming half the dollars they are eligible for – they are taking fewer classes than they need to graduate in a timely fashion.

• For students from families with higher EFCs, claim rates are rising, while the dollars are staying the same.  These students might have gone out of state before (out of state schools are not MAP-eligible.)

The early suspense dates and the drop in claim rates are causing the regional distribution of MAP awards to change.

• The table above shows the special distribution of MAP-eligible students by dependency status (dependent, traditional students and independent students) and region (Chicago, collar counties, rest of the state.)  There is a significant change in the distribution of dependent MAP- eligible students.  The Chicago and collar counties are gaining MAP-eligible students at the expense of downstate due at least in part to a greater emphasis on early FAFSA filing by schools in the Chicago area.  Fewer Chicago area students are being affected by the early suspense date.

• The table above shows MAP recipients by dependency status and region.  Again, there is a significant change in the special distribution of dependent MAP recipients.  Chicago and the collar counties gained MAP recipients while downstate lost recipients.  The drop from 34% to 30% represents about 3,200 students who did not receive MAP downstate.

The early suspense dates and the drop in claim rates is causing the distribution of MAP awards by sector to change.

• Last year, we spent approximately $57 million on 56,326 community college students; this year it will be about $54 million for 52,690 students.  Next year it will be even less.  The early cut-off dates are going to dramatically change the sector divisions.  There will be more dependent students who plan to attend a four-year institution filing early each year.  Each grant takes 3.5 community college grants.
  
  
• The table below shows the change in the distribution of MAP grants and dollars by sector between FY2009 and FY2010.  Community college MAP grants dropped nearly two percent and the dollars going to community colleges fell by about 1 percent.  Barring a dramatic increase in funding, this trend will continue.
  

	Percent of MAP Grants		Percent of MAP Dollars
	2009	2010	2009	2010
Public Universities	29.0%	29.4%	39.1%	39.1%
Community Colleges	38.5%	36.7%	14.8%	13.9%
Private Institutions	26.0%	26.9%	40.2%	40.8%
Proprietary Schools	5.1%	5.6%	5.9%	6.2%

• While the drop in funds to students attending all community colleges is significant; the impact is not the same across all community colleges. Students in rural areas attending community colleges are much less likely today to receive a MAP grant.  Some rural community colleges saw drops of up to 24% in the number of MAP recipients and/or MAP dollars received.
  
  
• Independent students generally file later than dependent students and are often poorer as well.  About one in 4.5 dependent students is suspended due to lack of funds, for independent students it rises to one in three.

The MAP program is under duress.  It is critically important that additional funds be made available to:

• Cover a larger portion of tuition and fees – coverage has dropped from 100% in 2002 to less than half today at public institutions and two-thirds at community colleges.
• Serve more students – especially rural community college students, often independent, who are rapidly being shut out of the process.