Education

Too many students can’t pay for college. So UK is making a major change to help

The University of Kentucky is making a dramatic change in how it gives out financial aid by concentrating more on students who need help paying for college.

The move will change UK’s allocation from nearly 90 percent of financial aid that’s based solely on grades and test scores to about 65 percent of aid based on student need, said Provost Tim Tracy, who announced the change to the UK Board of Trustees Friday morning.

Tracy thinks the shift will help improve graduation and retention rates, which are still below many benchmark schools, because unmet financial need is a large reason why many students drop out.

“We have a larger proportion of our students who have unmet need,” Tracy said. “We want to be the University for Kentucky and we’re trying to develop a strategy to help our students most succeed.”

UK awards scholarships on a four-year basis and no current scholarship awards will be affected. UK has already started to tweak scholarships, though, by raising the academic standards for students who attend the Governor’s Scholars Program or the Governor’s School for the Arts, and for UK’s top prize, the Singletary Scholarship.

UK officials said that in 2015, more than $22 million of the $25 million given to freshmen in financial aid was based solely on academic merit. Under the UK LEADS (Leveraging Economic Affordability for Developing Success) initiative, more than $17 million would have been distributed based on financial need and about $8 million would have been awarded based on academic merit or other factors.

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Tracy did not have many other details about how the shift of UK’s roughly $113 million in institutional aid would start. He said the Patterson Scholarship for National Merit Scholars would stay the same because it is an automatic award. But the number of Singletary Scholars — which pays for room and board — will probably be reduced. That scholarship requires a minimum score of 33 on the ACT and a GPA of 3.8 to be considered.

Over the next two to three years, UK LEADS would put more money into the Provost Persistence Grants, which help students who have one-time financial needs, Tracy said. Since last year, about 300 of those grants have been awarded for a total of $843,800. Of those recipients, 57 percent are from Kentucky and 52 percent are under-represented minority students.

Tracy said that in UK’s analysis of retention, a steep decline in success occurs when a student’s unmet financial need exceeds $5,000. One third of freshmen who didn’t return for their second year this year had a GPA of 3.0 or higher, Tracy said. That means other things are preventing them from coming back, and he thinks it’s money. “We believe it is the single most important factor,” he said.

Currently, UK’s six-year graduation rate is about 63.5 percent and the goal for 2020 is 70 percent. The retention rate between freshman and sophomore years is 82.7 percent, with a five year goal of 90 percent. In addition, first generation and minority groups, many of whom are facing financial pressures, are 16 percent less likely to graduate within six years.

UK has also decided to put more weight on high school GPAs than test scores because the school’s data show that GPA is a better indicator of academic persistence, and therefore completion of college.

That’s not to say academic performance won’t be rewarded with financial aid.

“We will still be providing significant aid based upon academic performance, but beginning in fall 2017 we will shift more of our efforts in a strategic fashion toward financial need,” Tracy said. “This is part of a holistic effort to focus intentionally and comprehensively on student success at all levels.”

The current situation has been years in the making.

Starting in 2001, UK — like many other schools — began to shift the majority of its financial aid to merit awards in order to raise its academic rankings by boosting the quality of students who attend. While some of these awards also helped students who needed financial aid, unmet financial need was not considered.

A 2014 Herald-Leader analysis of UK’s financial aid found that merit aid had risen nearly 150 percent between 2007 and 2014, and one in four students who received aid had no financial need.

$28,000 The total cost of attending UK for a year.

The trend was due to a set of circumstances that affected all of higher education, including competition between schools to recruit the same top students and multimillion dollar losses in state funding that led to higher tuition and more scholarships to out-of-state students, who pay nearly double the tuition rate of in-state students. Since 2007, UK has lost $68 million in state funding. Out-of-state students now make up about 37 percent of the freshman class.

But while the number of National Merit Scholars at UK grew dramatically, experts said many qualified Kentuckians could no longer afford their top choice. The total cost of attending UK is now nearly $28,000 a year.

In 2014, Don Witt, who oversees enrollment management at UK, called the trend of increasing merit aid an “arms race” that would only begin to change if one institution overhauled its aid program.

On Friday, Witt said UK was that leader.

“It’s exciting to be able to support more deserving students who want to pursue their college degree at the University of Kentucky,” he said. “This is an important step for not only UK but for higher education in general.”

One national expert called UK’s decision “groundbreaking.”

“Most public education is going the other way,” said Stephen Burd, a senior policy analyst with the New America Foundation and the author of numerous reports on the plight of low-income students in higher education. “I think this is really a red flag for other public universities that have been making it less affordable for low-income students to attend, and maybe middle income students as well.

“I think Kentucky is on the forefront of what I would hope is an example that will influence other institutions to think about these issues as well.”

Although not up for a vote, trustees seemed largely pleased with the change. Student Government President Rowan Reid, who serves as a trustee, pointed out that high academic attainment is highly correlated to family income and education, which means that students who need it least receive the most merit aid.

“I think we’re taking a step in the right direction,” she said. “We have to start focusing on students who can’t afford higher education.”

Faculty trustee Robert Grossman said he was surprised that 90 percent of UK’s financial aid was solely based on merit.

“I think it’s responsible for UK to rebalance our aid portfolio,” he said. “Merit-based aid tends to be a subsidy for wealthier families, although it may not feel that way.”

Dustin Pugel, a research associate at the Kentucky Center for Economic Policy, said UK is a role model for financial aid strategies.

“It’s encouraging to see the University of Kentucky set a good example for other colleges and universities, as well as lawmakers in Frankfort, with this policy change,” Pugel said. “Getting a college degree has never been more important or more expensive, so we encourage university and state leaders to continue to prioritize need-based aid across the commonwealth to help our students receive the education they need to build strong and vibrant communities.”

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