Senator Eliot Shapleigh - El Paso, Texas

Study after study has concluded that Texas needs to increase financial aid dramatically if it hopes to boost enrollment and graduation rates for low-income students, the fastest-growing segment of the college-age population and the one that includes many Hispanics and African Americans.

The House and Senate versions of the proposed state budget, while increasing aid considerably, would nonetheless fall about $400 million and $500 million short, respectively, of the $1.4 billion the Texas Higher Education Coordinating Board has recommended. And even that recommendation wouldn't cover grants, loans and work-study programs for all eligible students.

"We're in a demographics crunch," said Higher Education Commissioner Raymund Paredes. "These kids, whom we need to nurture to improve our economic competitiveness, can't go to college without our help."

Lawmakers and university officials haven't been as passionate about financial aid this session as they have been about limiting tuition increases, lifting some schools in the national rankings by boosting their research programs and altering a law that allows students graduating in the top 10 percent of their Texas high school class to attend any public university in the state.

Still, a lively debate is beginning to emerge on the question of financial aid. A House-Senate conference committee will have to resolve differences between the two chambers' budgets.

"There is political will and an understanding in the House that a college education should be more accessible and more affordable," said Speaker Joe Straus, R-San Antonio. Asked how firm the House is on its version, he replied, "I think the House is right on track in terms of higher ed."

Steve Ogden, R-Bryan, chairman of the Senate Finance Committee, said he hopes to work out the differences between the two versions, adding, "I do like the Senate bill, if that helps you."

Either chamber's version of the two-year budget would represent a sizable increase over current spending on financial aid. The Senate would raise the outlay about 21 percent; the House, 40 percent. The coordinating board called for an 89 percent increase.

The Select Commission on Higher Education and Global Competitiveness, a panel authorized by the Legislature, also called for a dramatic increase. Its report, issued in January, also said the state should focus aid on grants, which do not have to be repaid.

"We need to do something drastic or we'll end up being a state of dishwashers," said state Sen. Rodney Ellis, D-Houston, a proponent of higher grant aid. Dishwashing is an important job, he said, but the state needs an educated work force to seize the "green" and knowledge-based jobs that will drive the economy in the future.

Legislative appropriations for financial aid and core academic purposes haven't kept pace with rising costs, a growing population and increased enrollment in recent years. Partly in response to lagging appropriations, average tuition and mandatory fees at public universities have gone up 86 percent, to $6,300 a year, since 2003, when lawmakers gave governing boards authority to control those charges.

Besides agreeing on a bottom-line total for financial aid, House and Senate negotiators must decide how to parcel out the money.

The House version would increase funding for Texas Grant, the state's main grant program, by $224 million; the Senate would add $86 million. The House would expand a grant program restricted to community college students by $25 million; the Senate would add $1 million.

The B-on-Time loan program — under which students do not have to repay the zero-interest loan if they graduate on time with at least a B average — would get a $48 million boost under the House version and a $67 million increase under the Senate's.

Also in play this session is the question of whether to toughen academic eligibility for the Texas Grant program.

Under current rules, students with financial need must satisfy the requirements for the state recommended or advanced high school curriculum to be eligible. Ogden has proposed a revision that would put higher-performing students — such as those in the top third of their high school class and earning at least a B average — at the head of the line.

Paredes is a proponent of this "need-plus-merit" approach, asserting that it makes sense to reward higher-performing students when there isn't enough money for all students. About half of eligible students currently receive the Texas Grant. The Senate version would provide a slight increase; the House version would cover more than 60 percent of those eligible.

Ellis, one of the architects of the Texas Grant program, opposes Ogden's plan to tighten eligibility, which he said could cut out some of the low-income and minority students most in need of financial assistance.