McGinty College Affordability Plan Aims to Establish Middle-Income and Merit-Based Grants, Restore Financial Aid Funding, and Curb Tuition Increases

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Democratic gubernatorial candidate Katie McGinty today unveiled her “College Affordability Plan,” which aims to make colleges and technical schools more affordable for Pennsylvania’s middle and lower-income families.

McGinty’s plan calls for restoring financial aid cuts made under Republican Governor Tom Corbett, establishing a Middle-Income Opportunity Grant Program to provide financial grants to an additional 35,000 middle-income families, and creating a Pennsylvania Dream Scholarship Program to provide merit-based grants of up to $4,000 for 10,000 high-achieving, low-income students.

McGinty has also released her plan to improve K-12 education.

“As the ninth of 10 children, I was only able to attend college as a result of a scholarship,” McGinty said. “Today, too many Pennsylvania families and deserving students can no longer afford the cost of an advanced education. Not only are too many students being left behind, but our state is falling behind. Without an educated workforce, businesses will not expand or move here.”

McGinty’s “College Affordability Plan” would be paid for by modernizing the operation of state liquor stores and by imposing a consumption tax on cigars and smokeless tobacco. Pennsylvania is currently the only state in the nation that doesn’t impose a consumption tax on cigars and smokeless tobacco.

In addition to proposing an increase in student financial aid, McGinty’s plan calls for bringing soaring tuition increases under control by linking increases in state support to Pennsylvania colleges and universities that do not increase their tuition and fees by more than the rate of inflation.

Here are the full details of McGinty’s plan, via her campaign:

Corbett Record on Higher Education Shortsighted And Hurts Ability To Compete with Other States

“It will take years to undue the harm to higher education over the past three years under Governor Corbett. Corbett’s cuts to higher education and financial aid programs have shortchanged our colleges and our students. They are short-sighted and hurt our ability to compete for businesses with other states. It’s time for a governor who supports providing hard-working families greater access to an advanced education—not cuts off that access,” said Democratic gubernatorial candidate Katie McGinty.

Funding for Pennsylvania’s colleges and universities in 2013-14 is 14.6% lower ($195 million lower) than it was when Corbett took office. These cuts have forced the State System of Higher Education to raise tuition and fees by 13.1% over Corbett’s first two years in office and the University of Pittsburgh has raised its tuition by 15.4% over the last three years.

College financial assistance has declined by nearly 32%. In 2007, Pennsylvania provided almost $5,675 for each student enrolled at a public college or university; in 2012 that figure dropped to $3,875.

(Source: State Higher Education Officers as reported in the SHEEO State Higher Education Finance Report 2012.)

Pennsylvania ranks 46th in the nation in terms of state funding support per undergraduate student, and in the top five in terms of both in-state tuition cost and the average student debt load.

Restore Corbett’s Cuts To Student Financial Aid

Pennsylvania provides about $345 million in tax support for the state need based grant program through the Pennsylvania Higher Education Assistance Agency, which is $43 million lower than when Corbett took office. In order to maintain the maximum grant award at the 2011-10 level, PHEAA has supplemented the support it receives from the state with its earnings income from student loan servicing. In each of the past two years, PHEAA has used $75 million to supplement these state tax dollars.

McGinty strongly supports PHEAA continuing to use its earnings, derived through the support of Pennsylvania taxpayers, to continue the existing state grant program.

Middle-Income Opportunity Grant Program

“Hardworking middle-income families have often felt the brunt of rising college costs and cuts in financial aid. We need to fix that by increasing financial aid to these families,” said McGinty.

Influenced by a proposal by the Pennsylvania Alliance for Student Support, McGinty proposes a “Pennsylvania Middle Income Opportunity Grant Program” to provide 35,000 more students financial aid from the state. In 2012-13, 79,000 students with incomes between $80,000 and $110,000 applied for state grant support, but less than 20% of those students received aid.

McGinty’s plan would supplement the existing state grant program by offering scholarship support for students with family incomes of up to $110,000 and by increasing the maximum grant that students can receive to $5,000.  Over time, McGinty would peg the maximum grant award to 67% of the tuition at the State System of Higher Education. This program would cost $40 million annually.

Pennsylvania Dream Scholarship Program

“All too often low-income but high-achieving students have faced significant barriers to their dream of a college education. As a society, we can no longer afford to neglect these students. The Dream Scholarship Program will provide financial assistance to 10,000 high achieving, low-income students. And, it will create incentives for our most distressed school districts to encourage their best students to graduate and go on to college,” said McGinty.

The Dream Scholarship program will offer merit based grants of up to $4,000 for high-achieving, low-income students to attend colleges and technical schools in Pennsylvania based on a first-year $10 million launch, which by year four of the program will cost $40 million annually.

“The Pennsylvania Dream Scholarship Program will provide an incentive for our colleges and universities to use their own resources to invest in Pennsylvania’s best and brightest regardless of their income. And it creates the opportunity for community based groups to provide tutoring and college preparation programs for deserving disadvantaged youth,” said McGinty.

McGinty Proposes Linking Increased State Aid To Universities/Colleges Limiting Tuition and Fee Increases to Rate of Inflation

To curb soaring tuition increases, McGinty proposes that at least half of any increase in direct support for public higher education be linked to a provision that the receiving institution not increase tuition and fees by more than the rate of inflation.

In addition, $25 million of state funding of private institutions through the Institutional Assistance Grant program would be targeted to those institutions that limit the growth of tuition to the inflation rate.  Two-thirds of the funds made available through the Institutional Assistance Grant program would be awarded to institutions that hold the growth in their tuition to no more than the annual increase in the Consumer Price Index.

Increased College Financial Aid Funded by State Liquor Store Modernization; Cigars and Smokeless Tobacco Tax

McGinty would fund the Middle Income Opportunity Grant Program and Dream Scholarship Program by modernizing the state liquor store system and by imposing a consumption tax on cigars and smokeless tobacco.

By making modernization improvements in the state liquor store system, including extended hours of operation, improved direct marketing to consumers, other improvements in consumer relations, and enhanced enforcement and increased penalties, it is estimated $40 million can be generated annually.

Pennsylvania is the only state in the nation that doesn’t impose a consumption tax on cigars and smokeless tobacco. Eliminating this exemption would generate an estimated $40 million annually.

About Jake Sternberger

Jake Sternberger was a contributing writer at Keystone Politics from 2011 to 2014.
This entry was posted in Education, Elections, Governor.

One Response to McGinty College Affordability Plan Aims to Establish Middle-Income and Merit-Based Grants, Restore Financial Aid Funding, and Curb Tuition Increases

  1. Everything the state can do to help students go to college is to the good. The state’s future depends on it.

    Re “The Dream Scholarship program will offer merit based grants of up to $4,000 for high-achieving, low-income students to attend colleges and technical schools in Pennsylvania”: honestly, I doubt up to $4,000 is going to help a low-income student much. We’re not just talking about tuition, but room, board, books, transportation, and other expenses.

    Re “McGinty’s plan would supplement the existing state grant program by offering scholarship support for students with family incomes of up to $110,000″: those are “middle-income families”? The median PA household income is about $53,000, per the US census. I think many taxpayers would find it hard to feel much sympathy for the college bills of families at twice the median income level.

    It’s not that celebrating the end of the Corbett years by helping college students is a new idea in this campaign. See John Hanger’s “zero-tuition college plan for students” at http://www.hangerforgovernor.com/my_zero_tuition_college_plan_for_students/ on 8/19/13:

    “…Today I announced my plan for the Keystone Opportunity Fund to provide high school graduates two years of community college or one year at a public university at no tuition cost. Once students graduate, they would pay 1.2 percent to 2.2 percent of their incomes back into the fund for 15 years…. The Keystone Opportunity Fund would be initially financed with a $1.5 billion bond and a total of $3.4 billion of bond financing needed over 10 years. The fund would become self-sustaining through graduate repayments within 22.5 years….”