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Journal of Student Financial Aid

Journal of Student Financial Aid

Jennie Hay Woo

Abstract

In the future, California and other fast-growing states will not receive their fair share of campus-based financial aid. The money is allocated on the basis of a formula using a base guarantee, which effectively locks funding allocations into a 1985 distribution patterns. States such as California which face enormous increases of needy students will be at a distinct disadvantage if the formula is not changed. The federal campus-based financial aid programs, along with the Pelt Grant Program constitute the basic support at the federal level for low-income students to attend college. In 1990 almost $1.2 billion was allocated to students across the United States through campus-based programs. These programs are unusual because they do not allocate funds directly to the eligible students. Instead, funds are allocated to campuses where they are disbursed to students in accordance with federal rules. The money is allocated to schools by the federal government on the basis of a standard formula. On close examination, this formula is insensitive to demographic changes. In effect, it preserves the status quo in funding allocations. Institutions, and in turn states, that will undergo dramatic increases in college enrollment could find themselves at a disadvantage in funding for these programs.

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