The final budget agreement that passed the legislature includes significant new investment in the state’s college scholarship programs. Over the biennium, the funding increase for Kentucky Higher Education Assistance Authority (KHEAA) is $121.5 million over what was budgeted for the prior two-year period. This new money for scholarships is important for helping Kentuckians better afford college — particularly the state’s low-income students — and the governor should affirm these investments as he makes final decisions about the budget.
These improvements in financial aid funding are especially critical given the budget’s 4.5 percent cut, or $60.4 million over the biennium, to public universities and community colleges. Last year, Kentucky already ranked 11th among states in highest per-student cuts to higher education since 2008. With new budget reductions for postsecondary institutions Kentucky’s national position will only worsen, as will its college affordability problem as the public universities and community colleges will likely need to raise tuition in order to help compensate for the funding shortfall.
Already a college education remains financially out of reach for many Kentuckians. We have the highest community college tuition in the region, tuition increases since 1999 in the range of 206 percent (at Murray State) to 286 percent (at Western Kentucky) at the state’s public postsecondary institutions and the third highest student loan default rate in the nation.
State scholarship programs can help somewhat mitigate these costs — particularly need-based financial aid like the state’s College Access Program (CAP). And unlike in recent years, the budget agreement provides close to full statutory funding for both CAP and the Kentucky Tuition Grant (KTG). For several years, tens of thousands of qualified students have been turned away from these programs because much of the lottery money intended by law to fund them was instead siphoned off to help with other areas of the budget. In contrast, the two scholarships would receive $238.9 million across the biennium in the new budget agreement, nearly $55 million more than in the previous biennium. This translates to close to 30,000 more need-based scholarships in total. These funds were appropriated in the budget bill as well as through a supplemental appropriation in House Bill (HB) 10.
Additionally, the state legislature agreed to create a new $25 million scholarship program to pay full tuition costs (after other scholarships) for graduating high school students entering associate’s degree programs at the state’s community colleges, public universities and nonprofit colleges. The program, called Work Ready Kentucky, will contribute toward making college affordable for selected traditional age students seeking associate degrees. The budget bill also includes a new dual credit scholarship ($15 million over the biennium) through the merit-based Kentucky Education Excellence Scholarship (KEES) for high school students enrolling in college classes.
The budget bill that passed the General Assembly and HB 10 are awaiting Governor Bevin’s approval, veto or line-item veto. Given the additional cut to university and community college funding contained in the budget and the growing recognition that financial barriers at the key challenge to college completion, it’s critically important that the thousands of scholarships that help students afford college be included in the final document.