The fiscal year 2022 budget deal struck by Gov. Phil Murphy and legislative leaders in June was a monumental spending plan for many reasons: It was the largest budget in New Jersey’s history, made a massive $6.9 billion pension payment and established a new $3.7 billion debt defeasance and prevention fund, to name three reasons. It was also a landmark budget for college access and affordability.
For low-income students, college at four-year public institutions became tuition free for the third and fourth years under the Garden State Guarantee initiative. The budget also added tax deductions for in-state tuition payments, NJCLASS loan payments and contributions to the state’s 529 college-savings plan and provided matching funds for qualifying families who utilize the college-savings plan. The Educational Opportunity Fund, which provides financial, academic and personal support to students from disadvantaged backgrounds, also saw a $4.8 million increase this year. These strategic investments will put a college degree within reach for nearly every New Jerseyan and will help ensure that our state continues to have one of the most highly skilled workforces in the nation.
But perhaps less talked about but just as important, is the additional investment in the Tuition Aid Grant (TAG) program. This budget allocated an additional $35 million for TAG — one of the most generous needs-based financial aid programs on a per-student basis nationally. The TAG program was established over 40 years ago to help students offset tuition costs at the state’s colleges and universities. An individual’s grant award amount is dependent on several factors, such as need, tuition rate and funds available. Awards can be used at county colleges, four-year public colleges and universities, private institutions and certain proprietary degree-granting schools. The award is renewable as long as students meet certain academic benchmarks and demonstrate need. For reference, in the 2019-2020 school year, a total of $441 million in TAG awards were provided to 83,187 students.
And the program works. TAG has proven to help increase the rate of on-time bachelor’s degree completion at public colleges and universities. There is no doubt that the merits of TAG and the additional funding in the budget are worth celebrating. But a recent report by the Urban Institute urges policymakers to take a closer look at some of the longstanding inequities in the current system to better serve students. As the association representing seven senior public institutions of higher education in the state, we couldn’t agree more.
Specifically, the Urban Institute recommends that state policymakers review TAG award differences across the state’s higher-education sectors and individual institutions. For 2020-2021, the maximum TAG award for a student attending a private institution was approximately 75% higher than the average maximum award to attend a public institution ($12,938 compared with $7,380). Differences also exist among the four-year public institutions themselves. The maximum awards for a student attending a public research university ranged from $7,474 to $11,428, while the maximum awards for a student attending one of the state’s public colleges and universities ranged from $5,168 to $9,488. Although the differences in award amounts were once based on each institution’s cost of attendance, they have become increasingly arbitrary with each passing year.
With the state seeing an unexpected influx of tax revenue, the Legislative Black Caucus sought to address these inequities when it advocated for the additional $35 million for TAG in the fiscal year 2022 budget. Instead of giving all schools the same percentage increase with the new monies, the Legislative Black Caucus plan would direct the funds to the four-year institutions to increase awards and eliminate the arbitrary differences. These dollars will make a real difference for students and their families.
According to a Rand Corp. study, even an extra $1,000 improved graduation by 2.6 percentage points.
The Higher Education Student Assistance Authority (HESAA), the state agency that administers the TAG program, will be meeting this month to establish the TAG award table. HESAA has a unique opportunity to effectuate the Black Caucus’ TAG reform plan to enhance the program’s impact for low-income students who attend New Jersey’s four-year public colleges. This reform, combined with the other higher education measures in this budget, secures New Jersey’s place as a national leader on college access and affordability.
Looking beyond this fiscal year, the state will have more opportunities to make sure the TAG program is deployed effectively. The Tuition Aid Grant Study Commission, which was created by legislation that was signed into law by Murphy in 2020, continues to review the program and will be reporting back to the governor and the Legislature on how to improve it. The commission has plenty to consider between the findings of the RAND Corp. and Urban Institute studies.
In addition to fixing the imbalances in TAG awards, the Urban Institute also suggests several other worthwhile proposals to support degree attainment, including allowing students to use TAG funding for summer courses and expanding eligibility to students enrolled part time at four-year public institutions. These seem like logical next steps to continue to build on an extremely successful college financial assistance program to reach even more deserving students.