Legislators Likely to End Top 10 Percent Scholarships

A state-funded college scholarship program designed to keep top students in Texas may soon be axed due to lawmaker concerns that it doesn’t have enough money to accomplish its goal.

Budget proposals passed by the House and Senate each call for $21.4 million in cuts to the Top 10 Percent Scholarship Program, leaving just enough money to cover students who are already receiving the financial aid. Once the existing students graduate or are no longer eligible, the budget would drop to zero and the program would be eliminated, meaning thousands of future students will miss out on that financial aid opportunity.

The two chambers still need to reconcile their budgets and approve a final two-year spending plan, so the cuts aren’t a done deal. But lawmakers and higher education leaders say they don’t expect a late reprieve, arguing that the amount students receive from the scholarship has dwindled so much in recent years — down to $600 this year — that it’s no longer worth keeping.

Meanwhile, a couple of other financial aid programs are getting boosts from the Legislature this session, leading some education advocates to question why any scholarships need to be cut at all.

“It is a false choice to discuss moving $22 million from one program to another when the Legislature is simultaneously proposing almost $5 billion in tax cuts,” said Garrett Groves, program director at the liberal Center for Public Policy Priorities. “We could double our investments on nearly all financial aid programs and still have enough to provide a $3.8 billion tax cut.”

Currently, all students who finish in the top 10 percent of their public high school class qualify for the scholarship, as long as they can show that their expected family contribution is at least one dollar less than the cost of attending school. There were 16,590 students who met that standard this year.

Under the program, each recipient gets the same amount, which is determined by how much money is available. But that amount has dropped as the number of qualified students has grown — the reason lawmakers think it’s unsustainable.

In 2009, the program’s first year, recipients received $2,000. As designed, the program was also to include an extra $2,000 for students who majored in a science, technology, engineering or mathematics.

But from the get-go, there was never enough money in the program’s budget to fund the bonus. And in recent years, there hasn’t even been enough money to fund the first $2,000. Lawmakers cut $11.4 million from the program in 2011 to help cover a budget shortfall. Meanwhile, the number of students who qualified continued to grow, spreading the funds even thinner.

“The Texas Higher Education Coordinating Board commented that due to the demand of the program, the award has become too low to compete with scholarship programs from universities outside of Texas that attract the same students,” state Sen. Larry Taylor, R-Friendswood, said in a statement. Taylor chaired the Senate working group that handled higher education appropriations.

But officials from the coordinating board, which administers the program, said they didn’t necessarily intend for the program to be axed. It raised the idea of cutting the program during a strategic budget review when it was required to say how it would handle a hypothetical 10 percent cut in its overall budget.

“If we had unlimited resources, we certainly would love to fund the program at the $2,000 reward, and then the $2,000 bonus for students that were majoring in STEM fields,” said Linda Battles, deputy commissioner for the coordinating board.

Another possible factor in the cuts: The creator of the program, former Senate Finance Committee Chairman Steve Ogden, R-Bryan, is no longer in the Senate. Ogden didn’t return a message seeking comment Thursday.

In his statement, Taylor noted that other financial aid programs will likely receive increased funding. The Senate budget that he helped write includes an additional $83.4 million for TEXAS Grants, which provide $5,000 to students who start college within 16 months of graduating from high school and have demonstrated financial need. The House version of the budget adds $37.7 million.

The House and Senate budgets also propose adding money to the Texas Educational Opportunity Grant program, which targets students attending two-year colleges. The House budget adds $41 million, while the Senate’s version adds $27 million.

But in addition to eliminating the Top 10 Percent scholarships, lawmakers are also likely to begin phasing out the state’s B-On-Time program, which offers students loans that are forgivable if they graduate in four years. That program received $80.5 million for the current two-year budget cycle.

Disclosure: The Center for Public Policy Priorities is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.