Senator Eliot Shapleigh - El Paso, Texas

Texas isn't the only state facing questions about whether it provides enough student aid. But it's an increasingly pressing issue here. (photo courtesy images.publicradio.org)

 After more than 20 years of helping students prepare for college, Paula Barnhouse says she's seeing fewer students than ever who can afford it.

College costs in Texas keep rising faster than the federal and state grants that needy students depend upon, said Ms. Barnhouse, director of academic and career counseling for Irving schools.

"It's really hurting the families who already were struggling to afford it, and I don't see them getting any more aid than they did before, except in the form of loans," she said. "It's a real problem."

In most recent years, the state hasn't spent enough money to provide grants for all eligible students, forcing families to rely more heavily on loans – and those don't always fill the gaps. Experts say those trends will grow more critical unless something changes.

An advisory group of educators, financial aid experts and representatives from the Legislative Budget Board and governor's office is meeting today in Austin to study how best to spend the state's financial aid dollars to help more students, particularly poor and Hispanic ones, attend college.

The Legislature ordered the review of state aid programs to make sure the money is being spent efficiently. One idea lawmakers want to study: limiting the state's main grant program to students who meet certain academic criteria. Group members have their own thoughts, too, such as using state money to forgive federal loans under certain circumstances.

The group's suggestions will go to the Texas Higher Education Coordinating Board, then to the governor and Legislature by July.

A fundamental question sure to emerge: Should the state put greater effort into finding more money for student aid programs, or finding ways to spend current dollars more wisely?

"The reality is there's X number of dollars," said Rick Renshaw, financial aid director for the Dallas County Community College District and a member of the advisory group. "We've got to deal with the reality that our slice of the pie is not as big as we'd like it to be."

State Sen. Rodney Ellis, D-Houston, said Texas can't send more students to college without investing more money.

"There's been a lot of talk but not a real commitment," he said, "and the money is there."

Enough aid?

Texas isn't the only state facing questions about whether it provides enough student aid. But it's an increasingly pressing issue here.

Historically, Texas spent relatively little on state grant and loan programs, so students had to rely mostly on federal aid. Texas also had some of the country's lowest college costs.

Not anymore.

At Texas public colleges, tuition has jumped an average of 40 percent since 2003 as the Legislature has allowed state funding per student to drop and authorized campuses to make up for the shortfall by setting their own tuition rates.

Tuition and fees at public Texas universities now average more than $6,400 – slightly above the national average, according to the College Board.

Meanwhile, federal aid programs haven't kept up with rising college costs. Pell grants, for the neediest students, once covered the bulk of tuition, fees, room and board at a public university. Now they cover about a third.

That leaves a bigger need for state aid.

Texas' biggest grant program is TEXAS Grants, which Ellis helped create in 1999. At first, the state couldn't give all the money away because so few students applied.

Then word of the program spread. Tuition started rising under deregulation, and the state started requiring most students to graduate with a college prep curriculum – and many of those students need help paying for college.

TEXAS Grants became a victim of its own success: Since 2004, the state hasn't had enough money for all eligible students. Although the Legislature added tens of millions more for 2008-09, more than 90,000 eligible students will still be shut out.

A state loan program called B-On-Time has shared a similar fate. Last year, the state didn't give the program enough money, so thousands of students who were counting on the loans learned they wouldn't get them.

Tough choices

Those shortfalls represent broken promises and force students to make tough choices, school officials say.

"If you're going to have a program and not fund it, that puts everyone in not only an awkward but a sad situation," said Loyce Engle Smith, a counselor at Flower Mound High School.

Added Joe Pettibon, financial aid director at Texas A&M University and an advisory group member: "For low-income and middle-income families, if they can't figure out how to pay for it, they'll make a decision to go to an institution that costs less, or not go at all."

One solution the Legislature didn't ask the advisory committee and Coordinating Board to consider is spending more money on grants and loans.

Some lawmakers say they want to make sure existing dollars are spent wisely before pumping even more into financial aid. State Rep. Dan Branch, R-Dallas, said lawmakers have boosted financial aid spending 24 percent over the next two years.

"We're in the middle of the pack compared to our peer states," said Branch, who heads a special House committee on public and higher education finance. "Can we do more? Can we be more efficient? The answer is, absolutely."

Among the questions Branch wants addressed: Are all needy students applying for aid? How can the state encourage students to graduate faster, so aid dollars can start helping others?

Ellis, for one, doesn't think focusing on efficiency is the answer.

"Sometimes people use efficiency as a buzzword for being cheap," he said. "They don't want to put enough money into giving somebody enough opportunity to get a college degree."

Ellis said the Legislature bears responsibility for not spending enough on financial aid and for deregulating tuition. Plus, he said, college leaders keep raising tuition.

At today's meeting, advisory group members will share their ideas for improving financial aid, beyond the topics they were assigned. They're also studying other states. Indiana, for example, has a program promising free tuition at state universities to low- and middle-income students who graduate from high school with a C average and meet other conditions.

Some North Texas families have their own suggestions.

Dan Kolb, father of a Colleyville Heritage High School senior, said the state should award aid to students who go into teaching, as Illinois does in a program designed to help relieve a teacher shortage.

No matter what Texas decides, there's plenty of room to improve, some experts say.

The poorest families in Texas must spend two-thirds of their income to afford a four-year public college, while middle-class families must spend a quarter of their income – and that's with financial aid, according to a study by the National Center for Public Policy and Higher Education, a California nonprofit that grades states on higher education measures. Texas is roughly at the national average.

"You can talk about what college is worth or what other states pay," said Patrick Callan, the center's president. "But ultimately what matters is what it costs a family in your state."