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Mississippi spends less on college grant aid than nearly every Southern state


Mississippi spends less on college grant aid than nearly every Southern state

Feb 23, 2024 | 1:45 pm ET
By Molly Minta
Mississippi spends less on college grant aid than nearly every Southern state
Photo courtesy of Mississippi Today

Mississippi spends less money on college financial aid programs than almost every state in the Southern region. 

This holds true for both total dollars spent in Mississippi – about $45 million – and the average amount of grant money each college student receives. Other states, including deep-red neighbors Arkansas and Louisiana, dole out more money for college on a per-student basis while charging roughly the same or less for tuition. Even West Virginia, with close to half of the population, spends double Mississippi. 

Not many lawmakers today know why this is, but several factors may be the cause: Financial aid policy is complex, and the Legislature tries to keep tuition low through funding the colleges and universities. Plus college financial aid is not a core function of government, many lawmakers say, such as roads and bridges or paying teachers. 

But a change may be underway this legislative session. Amid increased interest in workforce development — not to mention Mississippi’s $700 million surplus — lawmakers are no longer asking the state’s financial aid office to make its programs less expensive.

Instead, they want to know: If Mississippi spends more, what will we get for it? 

“If you look at it, that student, their life is an economic development project,” said Sen. Daniel Sparks, R-Belmont. “If we can get them from $26,000 to $66,000 a year (in income), that’s the most important economic development project in that person’s life.” 

Earlier this week, the agency responsible for Mississippi’s college financial aid programs presented its new proposal to the Senate Colleges and Universities Committee that would pump $30 million into adult, part-time and many low-income students who, by law, have been ineligible for the Mississippi Resident Tuition Assistance Grant since it was created nearly three decades ago. 

Depending on family income, an estimated 37,000 students would get an additional $500 to $1,000 toward the cost of tuition. And, unlike past proposals, this one would be enacted without cuts to the only state grant program that helps low-income students pay for college. It has already passed the House Colleges and Universities Committee.

The main question posed during the Senate meeting is how will Mississippi benefit from the increased funding. Though Mississippi’s overall investment in financial aid would remain low, the proposal’s price tag would nearly double what the state spends on helping students afford college, surpassing Alabama.

“Do we have metrics?,” asked Sen. Bart Williams, R-Starkville. “Can we show an ROI (return on investment)? We’re talking … about all this including everybody. What are we getting from it?” 

There is no data, responded Jennifer Rogers, the director of the Mississippi’s Office of Student Financial Aid. Lawmakers have never required performance-based funding for the programs she administers.

But the research on state financial aid spending is clear. 

What research shows on college aid spending

Though not a cure-all, financial aid programs pay off in all the areas lawmakers want to tackle this session: College-going and completion rates, career-readiness and workforce development. 

In general, college financial aid of any kind increases graduation rates. In Mississippi, research requested by OSFA found all three grant programs increased college graduation rates. 

But exactly how much is typically a function of a student’s income.

Because higher education costs money, financial aid that goes to students from families who can’t afford to pay for college on their has been shown to yield greater results, said Tom Harnisch, the vice president for government relations at the State Higher Education Executive Officers Association. It can be the difference between these students finding time to be involved on campus or working second jobs to pay for rent.  

“Those are the students that are really going to move the dial,” Harnisch said. 

For every $1,000 of grant aid spent on low-income students, research has shown college retention rates increase between 1 and 5%. In Florida, an additional $1,300 in need-based aid increased six-year graduation rates by nearly a quarter. In Texas, a grant program for low-income students was found to have freed 75 to 84 hours they would have spent working their first two years. For first-time students who receive a full federal Pell Grant, each additional $1,000 increase in grant aid is associated with more than $1,000 increase in earnings four years after enrollment. 

When states spend more on financial aid, more students pursue higher education. Community colleges in particular see an increase in enrollment. 

Sandy Baum, a nonresident senior fellow at the Urban Institute who has studied Mississippi’s financial aid programs, said the new proposal would be an improvement on MTAG’s current structure because it would direct more dollars to students who can’t afford to pay for college on their own. 

“Of course Mississippi needs to spend more,” Baum said. 

Other states have dramatically increased financial aid spending, the Urban Institute has found. After Arkansas legalized a lottery in 2008 and used it to fund college scholarships, the state’s spending on financial aid increased by $100 million. 

So why hasn’t Mississippi? 

A longstanding preference for less-expensive merit aid programs may be a reason.

Mississippi’s best and brightest

When lawmakers created MTAG in 1995, their goal was to help middle-class students afford college. The legislation was championed at a pivotal time by Eddie Briggs, the first Republican lieutenant governor in Mississippi since the Reconstruction era. To this day, the grant primarily benefits Republicans’ traditional constituents: White, middle-class Mississippians. 

“This program will help to keep Mississippi’s best and brightest here at home,” Briggs wrote in an op-ed at the time.

Two years later, lawmakers created the state’s Higher Education Legislative Plan for Needy Students. But unlike MTAG, which lawmakers were required to fund from one year to the next, HELP was available only if the money was. In the program’s first year, Mississippi budgeted just $500,000 for HELP but spent $900,000, a fraction compared to MTAG’s $12 million. 

Today, HELP is the most expensive grant program, because it pays for all four years of college. Of the three, it’s also the most effective at what it was created to do. And yet it benefits the fewest Mississippians: Just 4,538 students received HELP last year, less than a third that received MTAG. 

Mississippi’s spending on college financial aid is also tied to state revenue, said Sen. Briggs Hopson, R-Vicksburg, the chair of the Senate Appropriations Committee who in 2018 led discussions to change Mississippi’s grant programs. 

Adequate funding of the colleges and universities, Hopson said, helps keep tuition low.

“It is an overriding theme that we want to keep our colleges affordable, and I think we are,” he said. “It’s always a moving target.” 

With this latest proposal, lawmakers’ tune may be changing on need-based aid as Mississippi’s colleges and universities, teetering on the edge of a demographic shift that will mean fewer high school graduates go to college, need more students in seats. 

And, there’s an increased push for workforce development programs, which have been called the “message of the day” in Jackson. 

Sparks, senator from Belmont, said he would like to see changes to MTAG encourage people to pursue well-paid careers. He liked that last year’s proposal offered a bonus for students to major in certain subjects deemed “high-value pathways” by the state’s workforce development office. That seemed like a way to ensure the spending has a return-on-investment, Sparks said. 

“I don’t want to get into choosing what you (students) go take,” Sparks said. “But on the other hand, if I’m looking for someone else to pay the way or pay a portion of the way, they’re going to have more input than if I went in and said, ‘I got this myself.’” 

Universities v. community colleges?

As with last year’s bill, this proposal is likely to come down to a tug-of-war between universities and community colleges. 

During the Senate meeting, Hopson asked if the extra dollars might be better spent in direct appropriations to the public institutions considering the new program would also benefit Mississippi’s private colleges. 

“If we put $31 million into Kell (Smith)’s budget or into Al Rankin’s budget, they’d probably say give me the $31 million,” Hopson said. “But the private colleges would probably like this better because they’re going to get some part of this.” 

Hopson asked if it would be possible to instead ask the public colleges and universities to use the additional funding for institutional scholarships. Rogers replied that money “doesn’t always trickle down.” 

“I think probably you know exactly what their response is going to be,” Rogers said. “But I guess, from my perspective, someone has got to stand up and fight for the students who are facing a huge affordability puzzle.”