Keystone Crossroads: Pennsylvania Budget Impasse Holds Up $420 Million In Student Financial Aid

Nov 23, 2015

 

Old Main is a campus landmark at Penn State's University Park campus.
Credit Lindsay Lazarski / WHYY

Pennsylvania has been without a state budget for nearly six months now. Social service agencies are worried about shutting down. School districts are borrowing huge sums of money. And in-state college students are anxiously awaiting news about their state- funded financial aid.

Universities are having a hard time keeping up. A few weeks ago, Penn State sent an alarming email to 15,000 students. 

"I actually got an email from the bursar saying, like, 'hey, there's an outstanding charge on your bursar's account, you need to pay this,'" says Sarah Kegerreis, a sophomore studying broadcast journalism. 

Kegerreis' account said she owed $1,700 and indicated she wouldn't be able to get her grades or register for classes until it was paid. She says she did what most 20-year-olds would do when confronted with a bill for nearly $2,000: "I freaked out."

The Office of Financial Aid at Penn State has been dealing with these freak outs all semester. When you call their office, before you even speak to a representative, there is a recording that cuts to the chase.

"Please note," it says, "if you're calling about the disbursement of your Pennsylvania state grant, the grant will not be disbursed until the Pennsylvania state budget has been passed." 

Each year, a portion of the state budget goes towards need-based financial aid for Pennsylvania college students. This year, the Pennsylvania Higher Education Assistance Agency (PHEAA) was expecting to give more than 153,000 students a total of $420 million in grants. 

But that money isn't there. 

"We can't disburse any funds until we receive the funds from the General Assembly," says PHEAA spokesman Keith New. "The schools have an idea of what they can expect when the funds arrive, but each school has to decide how they're going to handle [the delay] based on their own resources." 

Across all of the commonwealth campuses, Penn State students were expecting $26 million in Pennsylvania state grants. Almost 15,000 students received the email that alarmed Sarah Kegerreis, telling them that they owed money to the school. 

Anna Griswold, executive director of student aid, says those emails went out automatically. Students are not expected to front the money. 

"Because it's taking so long, we're proceeding to just put temporary money in place for students so that their accounts don't show that they have this outstanding balance pending their grant," says Griswold. 

Penn State, like most schools across Pennsylvania, have found the funds to make up the difference. But the Office of Financial Aid has scrambled to cancel automation, reprogram their system to accept the temporary funds and prepare for a system reversal once the funds do arrive. And that's in addition to piecing together a spare $26 million. 

"The university will be short somewhere," says Griswold. "It's just a tough choice, what else can we delay and postpone in order to make this support available to students, and with high hopes that it's on a temporary basis." 

The nature of Pennsylvania state grants makes the delay more complicated. The grant goes towards tuition, unless a student has his or her tuition fully covered. Then the grant can be used for other educational expenses, like off-campus housing or books.

It's one thing to make up the difference in what a student owes the university in tuition. But many universities are temporarily helping students pay their rent or buy school supplies. 

The maximum Pennsylvania state grant is about $4,300 per student. That's a small percentage of the cost of a college education, but New says for many students, the hold-up is no small concern. 

"These state grant awards are critically important because these dollars go to the students that need them the most," he says. 

Like Kegerreis. Her parents might have been able to swing the $1,700 bill temporarily, except that she's a triplet. All three kids are in-state students receiving these state grants. 

Kegerreis says this experience has made her wary about using her state grant to pay for an off-campus apartment next year, which is what she and her roommate were planning to. 

It's gotten her thinking: "We have a little less than a year to save enough money to make sure we can pay maybe, like, two months rent without a refund in case there is another budget impasse again."

If nothing else comes of this interminable budget impasse, lawmakers in Harrisburg can rest easy knowing they've taught a Penn State sophomore the value of an emergency fund.