Upgrade Skills for Low-Income Working
Adults in Maryland
Through Post-Secondary Education and
Training
The Problem: Thousands of low-income working adults in Maryland need
education and training from a post-secondary institution to advance in the workforce
and achieve economic security for their families. The financial aid available to working adults
is not adequate to make post-secondary education and training accessible to the
neediest adults.
Policy Solutions: Increase
access to post-secondary education. Maryland should:
- Reallocate
a portion of existing financial aid funds from merit to need-based aid.
- Increase
funding for the Part-Time Grant program.
- Change
eligibility requirements for need-based aid to allow part-time students to
be eligible.
- Update
the cost of living allowance for commuter students, including allowing
childcare to be a counted expense.
Background:
Maryland Does Not
Give Enough Need-based Financial Aid
Maryland’s financial aid policies do not allocate adequate
resources towards need-based aid. This is a particularly severe problem given
that tuition increased by 8% at community colleges and 11% at four-year public
colleges in 2003.
In a 2001 study, the Maryland Higher Education
Commission recommended that Maryland increase its need-based financial aid. Students in Maryland are now relying more on loans than grants as a
source of assistance; loans make up 48% of state assistance, while need-based
grants make up 30% (the remainder comes from scholarships and work study). Loans are not effective at providing access
to education for low-income students because low-income students often cannot
realistically expect to be able to repay student loans. The waiting list of over 9,000 students for
the Educational Assistance Grant provides evidence of the demand for need-based
grants.
Maryland could increase its need-based financial aid by
shifting funds from merit based aid to need-based aid. Only 53% of the $76.4 million in centrally
administered state funds for financial assistance in FY2002 was distributed
through programs that are based on financial need. Furthermore, only 24% of the $70 million in
financial aid given by public colleges last year was based on financial need,
with the bulk of financial awards based on athletic or academic merit.
Low-Income Working Adults Face Barriers to Receiving State Need-based
Aid
Low-income working adults face barriers to receiving
state need-based financial aid that recent high school graduates do not
face. Most working adults attend college
on a part-time basis, but part-time students are not eligible for the state’s
largest need-based aid program, the Educational Assistance Grant. Institutions have part-time grants that they
can distribute, but allocations for these grants have been cut approximately
40% between FY02 and FY03.
Students
who are eligible for the Educational Assistance Grant do not receive aid that
reflects the true educational costs of commuter students. While residential colleges submit their
actual room and board costs for determining a student’s living expenses, the
living expense allowance for commuter students has not been updated for ten
years. The state made a small increase
in the commuter budget this year, but it still does not accurately reflect
actual costs. Furthermore, the
calculation of commuter costs does not take into account the cost of childcare,
a necessary expense for working parents.
Policy Solutions:
Increase Need-based Aid for Low-Income Working Adults
Maryland
can increase financial aid for working adults without requiring new funds. First, Maryland can increase the pool of need-based aid by shifting
funds from merit aid to need-based aid.
Some of these funds should be used to increase funding for the Part-Time
Grant program. This could also be achieved by establishing financial need
eligibility requirements for some merit based scholarships. This shift needs to happen with both
centrally administered aid and institutional aid.
Second,
Maryland can change the eligibility requirements for
financial aid so that more part-time students will be eligible. This will increase the number of working
adults eligible for financial aid.
Finally,
the living allowance for commuter expenses should be updated to accurately
reflect current costs. The cost of
childcare should be counted as an educational expense for students who are
parents of young children.