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Short Title

Envisioning a Modern Federal-State Partnership in the Reauthorization of the HEA as an Engine to Increase Social Mobility

Abstract

Financial aid makes up the bulk of federal higher education spending, but do those dollars make a difference to needy students? A look at Federal Work-Study and Federal Supplemental Educational Opportunity Grant allocations show that a disproportionate amount of funding goes to private universities with high tuition and low Federal Pell Grant enrollment. Additionally, many financial aid awards use cost of attendance as a factor in determining award amounts, creating an unintentional incentive for tuition increases. These elements contribute to a funding environment that favors private universities over publics. When considered alongside the fact that pervasive state disinvestment has caused public colleges and universities to raise their tuition considerably over the last decade alone, the existence of public higher education appears to be in jeopardy. The authors propose a federal-state partnership that would incentivize state governments to maintain or increase their funding for public higher education. Further suggestions include the elimination of price-sensitive components in financial aid awards and maintaining caps on these awards to stem tuition increases where possible.

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