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Interim Pennsylvania budget cuts college grant funds

| Wednesday, Dec. 30, 2015, 10:36 p.m.

Pennsylvania college students awaiting long-overdue state grants might receive smaller awards once the checks finally arrive.

An interim state budget signed this week reduced funding for the Pennsylvania Higher Education Assistance Agency, the office that disburses the grants, by 11 percent.

Agency spokesman Keith New said his agency has yet to calculate how the funding reduction will affect individual awards.

About 153,585 students who were promised grants of as much as $4,340 in the summer. Those awards were based on the state providing $344 million for the grants and $75 million from Assistance Agency profits from servicing loans.

But when Gov. Tom Wolf, an outspoken education advocate who vowed to increase state aid to universities and colleges, signed an interim budget, he approved $305 million in state funding for the grants. That is 11 percent less than was in last year's budget and $47 million less than the $362.1 million included in the budget the Republican-controlled General Assembly sent to his desk.

“If resources do not change and the eligible recipient pool does not change, it's likely awards would go down,” New said, adding checks should be cut in a matter of weeks.

For public universities, who dipped into reserves to credit millions of dollars in grants to student accounts while awaiting state subsidies that were held up due to the budget impasse, any reduction in awards could be a double whammy.

“The university fronted the PHEAA grants, so we would be on the hook for the difference if the grant amounts are reduced due to the reduced appropriation, which is concerning,” said Lawrence Lokman, Penn State's vice president for strategic communications.

University of Pittsburgh spokesman Ken Service said any reduction in grant funding is troubling.

“It puts more of the burden on families, which is not a good long-term strategy for the state,” Service said.

Wolf spokesman Jeffrey Sheridan said the governor isn't abandoning his commitment to higher education but is attempting to sign a balanced budget with available revenue.

Steve Miskin, a spokesman for House Majority Leader David Reed said Wolf's interim budget, which released some funding for public schools and social services, “holds college students and universities hostage to the governor's quest for higher taxes and more spending.” He said House Republicans are opposed to any kind of broad-based tax increase absent property tax reform.

Although Wolf approved funding at 2014-15 levels for 14 state-owned universities and 14 community colleges, the budget provided no funds for Pitt, Penn State, Temple and Lincoln universities, the state-related universities.

Sheridan said that's because the Legislature, which must fund those schools through a separate bill for non-preferred institutions, failed to pass such a bill before leaving for the Christmas holiday.

Officials at Pitt and Penn State said they realize lawmakers have yet to settle on a final budget and they are cautiously optimistic higher education will figure prominently in it.

In March, Wolf proposed restoring funding for the state-owned and state-related universities, all of which had their state support decline from 18 to 22 percent five years ago, to pre-2011 levels over two years.

That proposal prompted Penn State trustees to freeze tuition this fall, and officials at Pitt adopted its smallest tuition increase in four decades.

University officials haven't lost hope that they will eventually see an increase in state support.

“Without a funding increase, the institutions will continue to face significant fiscal challenges as they deal with a myriad of rising costs, especially in the areas of health care and pensions. As the budget discussions continue, we are hopeful that we will see a return to investing in the state system, which will benefit our students and the entire Commonwealth,” said Kenn Marshall, spokesman for PSSHE.

Debra Erdley is a staff writer for Trib Total Media. She can be reached at 412-320-7996 or derdley@tribweb.com

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