New Jersey Association of State Colleges and Universities committed to college opportunity for new jersey citizens

150 West State Street, Trenton, New Jersey 08608                       609-989-1100     609-989-7017 fax                   njascu@njascu.org

Policy Issues

One of the great things about higher education in New Jersey is the state’s historic commitment to student financial aid.  The state’s major thrust historically has been helping with grants, as opposed to loans, those students with greatest financial need.  We are among the nation’s most generous states in this regard.  But now, three problems are cropping up and taking this longstanding state commitment into uncertain territory:

The NJ STARS program is a perfect example of a well intentioned program that may not adequately support opportunity and equality.  NJ STARS is based on a guarantee: that every New Jersey high school student who graduates in the top 20% of his/her high school class will be able to attend a county college with their tuition and fees covered in full by the NJ STARS program (or other applicable aid programs). 

NJ STARS II is a more recent addition.  It extends the offer of full coverage of tuition and fees at a four-year public college for NJ STARS scholars who complete an Associate’s degree at a county college, with a grade point average of 3.0 or higher.  The purpose is to encourage high achieving two-year college graduates to attend senior public colleges “tuition free.”  This is a generous offer indeed, with the average tuition/fee cost at state colleges or universities approaching $10,000 a year.

Unfortunately, the state reimbursement to senior colleges for each scholar, $2,000 per semester (or $4,000 a year), is far less than tuition and fees, which currently average about $9,600 a year.  The program’s designers estimated that federal and other aid would fill the gap.  This is not the case, however.  Senior colleges and universities, when they accept STARS II students, must make up the difference.  This shortfall for the state colleges and universities is more than $2 million for 2007-2008, and is expected to grow.  This program, if it remains inadequately funded by the state, could have an adverse effect on college affordability for other students.

Those who conceived and supported STARS II thought it could be an avenue of opportunity for students from lower income families.  In practice, the scholars’ family median income of $71,000 is very close to the New Jersey median family income: $74,000 according to an August 2006 report by the Higher Education Student Assistance Authority.

Clearly, the program is not serving primarily low-income families.  And it is clear many STARS II students do not qualify for state and federal need-based aid.  As the NJ STARS program grows and guarantees full tuition to qualifying students, other student aid programs suffer.  For example, the state’s bedrock, need-based Tuition Aid Grant (TAG) program, is not funded to cover fully the calculated need for low-income students, because of state budget limitations.  This is a program that should be fully funded, not rationed in a way that might shortchange our neediest population across all higher education segments.

Furthermore, the state has opted to phase out the extremely successful merit aid program for high achieving students attending four-year public colleges and universities: the Outstanding Scholar Recruitment Program (OSRP).  OSRP was designed to help the state stem the brain drain; it nicely complemented our state’s need-based focus; and its success is documented.  In spite of advocacy efforts, and with little policy explanation, the state has decided to terminate it, again perhaps because of New Jersey ’s longstanding budget crisis.

New Jersey ’s policy approach needs revision as we lead the nation in exporting talented college bound students, losing a net of 26,000 college bound high school graduates annually.

As the state faces a $3 billion budget crunch for FY 2009, there will be temptations to look at more rationing of student aid program funds and bigger cuts to public colleges and universities.  In order to avoid further inequity in student aid, the following steps should be taken:

New Jersey can remain a leader in student financial aid and college opportunity.  But we need, immediately, more thoughtful, better integrated higher education policy informed by the colleges, and an investment commensurate with our generous intentions.