Financial Aid Proposal Could Place Restrictions on Awards in Arizona

Tens of thousands of Arizona college students who receive scholarships through the state’s three public universities could face new restrictions if they want to keep all their awards.

The Arizona Board of Regents is commencing a review of student financial-aid programs that could result in students receiving aid from universities to meet higher academic benchmarks for renewing their scholarships. It could also limit the number of credit hours covered by scholarships.

Conversely, students earning good grades in college, as well as those who graduate faster or major in certain subjects could get additional scholarship money under the proposal.

A Board of Regents task force will meet in coming months to discuss financial-aid ideas and is expected to offer recommendations to the full board in the spring.

The review is reportedly being prompted by state budget cuts, which have led to less state funding for the universities. With growing numbers of students, Arizona State University, the University of Arizona and Northern Arizona University are looking for ways to spread scholarship money further and offer more awards to middle- and lower-class families.

Arizona universities already have some performance requirements for their scholarships, but the rules vary widely, depending on the school and type of award.

A published report says any policy changes wouldn't apply to privately funded scholarships or federal, need-based Pell Grants because that money comes from outside sources. But the rules could apply to tens of thousands of students who get scholarships funded primarily by the universities.

In Arizona, the state universities provide the bulk of scholarship funding - $366 million for the 2009-10 school year. A portion of tuition revenue is earmarked for financially needy students. Other scholarships are awarded by academic merit or a combination of need and merit.

The second-biggest source of scholarships is the federal government, with $156 million
annually going to students at the state universities. State funding accounts for the
smallest scholarship pool, at $16 million a year.