HARRISBURG — Financial aid for thousands of Pennsylvania college students is on hold as a result of the state budget impasse, creating more delays for a vital program that has faced serious challenges over the past year.
The PA State Grant Program is the commonwealth’s largest need-based financial aid provider, giving more than 100,000 students an average of $2,000 each semester.
Starting in mid-2024, federal data glitches combined with the chaotic rollout of a new state software system to leave many students waiting months longer than usual for the grant funds, Spotlight PA reported.
As the standoff over the state budget stretches into its third month, students face another round of delays.
“Here we are again dealing with the same stuff, the same frustration,” said Melissa Bush, a student at Pennsylvania Western University who is waiting on almost $2,500 in aid for the fall semester. While she’s confident the money will arrive, it’s demoralizing to deal with more holdups, she said. Last year, she didn’t receive the money until after Thanksgiving break.
“It’s like there’s always something.”
Even once Gov. Josh Shapiro signs the budget into law, it will take at least four weeks for schools to begin receiving the money, a spokesperson for the Pennsylvania Higher Education Assistance Agency (PHEAA) said.
Students qualify for the grants based on financial need and their status as Pennsylvania residents. In the 2023-4 academic year, the program gave out $372 million in grants to more than 110,300 students. For full-time students, the maximum annual grant amount was $5,750.
Last year, the rollout of a new federal financial aid form collided with the launch of a new state software system to create long delays and widespread confusion among students and financial aid administrators.
The snags forced some students to take out additional loans, use up their savings, and spend hours trying to get answers from PHEAA. In response, the agency announced it would switch back to its older system for the current academic year.
Colleges and universities across Pennsylvania are taking steps to help students navigate the latest funding gap. Some are paying students from other funding sources, crediting their accounts with the aid they anticipate receiving, and waiving late fees. Some also offer emergency grant and loan programs.
Those stopgap measures, however, can’t last forever, Thomas P. Foley, president of the Association of Independent Colleges and Universities of Pennsylvania, told Spotlight PA in a statement.
Most of the private, nonprofit schools represented by the association — which educate about half of the students who receive state grants — “pinch pennies already” to balance their budgets and do not have significant endowments to fall back on if the funds continue to be held up, Foley said.
Students cannot receive their grants until Shapiro signs the state budget into law. State lawmakers missed the June 30 deadline to pass the budget because of deep disagreements over funding for public transit and overall spending levels.
As the standoff drags on, county governments and school districts are borrowing money, withholding payments to contractors, and scaling back services.
Ariana Little, an education student in her senior year at Drexel University, feels the sting in multiple ways.
Her eldest son’s high school has warned it might have to cut services if the impasse continues. Almost $2,000 in state grant funding for her fall semester is in limbo. The same goes for a $10,000 stipend she had been hoping to receive from a separate program overseen by PHEAA, which is intended to provide financial support for student teachers while they complete required classroom placements.
The program, which launched last year, aims to relieve the financial strain of teaching requirements, which were previously unpaid, and help tackle Pennsylvania’s teacher shortage.
Without the aid, Little has been juggling a part-time job at a convenience store with her teaching requirements and classes.
The impasse, she said, has “rearranged my whole entire life this year.”