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Want Proof That NJ’s Aid Program For College Students Is Working? Here It Is
2/23/2021 | TAG

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An independent report on the Tuition Aid Grant program — the most generous in the country — details the program's 'positive effects'

New Jersey's Tuition Aid Grant program is significant in helping students graduate on time, particularly those at the lowest income levels and those attending the state's four-year public colleges, according to a study that state officials plan to use as they consider possible changes to the decades-old program.

In a report released earlier this month on the Tuition Aid Grant (TAG) program, the nonpartisan RAND Corporation found that $1,000 in additional aid over four years led to a 2.6 percentage point increase in the on-time graduation rate at New Jersey's public universities. Additionally, TAG had a "positive" effect on the lowest-income recipients attending community colleges and private universities.

"The positive effects on bachelor's degree completion show that delivering additional aid to lower-income college students, via the traditional state-federal methods of measuring financial need, can be a cost-effective way to support college attainment and reduce time to degree," wrote the authors in their report, Cutting the College Price TAG.

RAND called TAG the most generous state-funded grant program per state resident college student in the nation. Roughly one-third of all full-time undergraduate New Jerseyans attending school in the state receive at least some aid through the program and some part-time students at county colleges are also eligible. The maximum TAG awards for full-time students this year ranged from $2,786 for those at county colleges to $12,938 for those attending independent colleges and proprietary degree-granting schools. A Rutgers University student could get as much as $9,848.

How Rutgers students benefit

A Rutgers spokesperson said the grant program provides some $100 million to more than 15,000 Rutgers students and is a vital financial resource in expanding access to higher education for students from low- and middle-income families. Without access to these critical funds, many students would be unable to attend college or complete their degree programs.

The report, conducted independently by Rand researchers, used data provided by the state Higher Education Student Assistance Authority (HESAA) that oversees the TAG program. And it comes as a 10-member commission created by a law Gov. Phil Murphy signed in January 2020 is examining the grants and charged with identifying any barriers and deficiencies in the program and recommending ways to improve it. While that report is supposed to be completed within a year, the coronavirus pandemic delayed the commission from being fully populated and meeting until last summer, so its recommendations are not expected until July.

"One of the inputs being used are the independent studies being done on state-funded need-based financial aid," said David Socolow, HESAA executive director, adding that the Washington-based Urban Institute is also working on a study.

He stressed that the purpose of the commission is not to save money by cutting the grants.

"We feel strongly about TAG's role in making college affordable in New Jersey," Socolow said. "What can we do to make it stronger and reach students in more effective ways? … If we had an extra boost in TAG, we would want to target where that would make the most difference."

Murphy increased the amount of grants slightly in the budget adopted in 2019, and that since has remained steady at about $438 million for full-time TAG, with another $9.3 million for grants to county college and Equal Opportunity Fund students. About 68,000 students are expected to get an average of almost $6,500 in grants that do not have to be repaid this year.

TAG helps boost degree completion

Socolow said TAG is an important part of the state's goal — as expressed in the higher education plan, released almost two years ago — to get 65% of New Jersey adults holding a post-secondary degree or trade credentials by 2025. Right now, 57% meet those criteria.

"Any investments the governor makes are going to be trying to further the aims of the higher education state plan, to get people post-secondary credentials that will matter for their lives, for their jobs," he said. "TAG helps boost completion. EOF (The Educational Opportunity Fund) helps boost completion … Financial aid clearly makes such a big difference."

Socolow said he was happy to see a rigorous independent study provide proof of the effectiveness of the TAG program. The RAND study is the first such analysis to compare the outcomes for TAG recipients with similar students who got less or no aid from the program.

"TAG is absolutely the foundation, it's the building block all the rest of our college affordability strategies are built on," he said. "Student success would be actually helping people graduate at higher rates by giving them financial aid, which on some level is what we all would have expected to see. We are gratified to see solid independent evidence of this."

TAG is need-based, calculated primarily based on a student and family's income and assets. While there is no official cutoff, Socolow said it is unlikely a student with a family income of more than $50,000 would receive much aid. The state has an online TAG estimator.

It doesn't depend on Pell Grants

One of the major benefits to students is that the amount of TAG students receive does not depend on any federal Pell Grants — the maximum was $6,345 this year — they might also get. That means some students may receive more in aid than their total tuition.

"The additional resources could help students to offset college expenses and to stay enrolled and work toward earning degrees," RAND reported.

Socolow said students who can afford to pay for college, books and transportation may not have to work much, if at all, which allows them to focus on their studies and graduate sooner.

"It helps the students but it also helps the broader society," he continued, because they get into the working world sooner and become productive. It also helps the economy because as they earn a salary, they also make purchases and pay taxes.

TAG also helps the state to provide residents without a degree and with a household income of less than $65,000 with free community college tuition. The Community College Opportunity Grants cover the difference between whatever financial aid a student receives, including TAG and Pell Grants, and the total cost of tuition.

The RAND study found positive results for providing TAG to the lowest-income community college students, although the most effective use of the grants in terms of getting students to graduate on time was giving them to needy students attending four-year public colleges and universities.

How TAG students compare

HESAA has posted data that shows how TAG recipients fare in graduating compared with all students. The results differ from school to school, but the results are comparable in most cases and in a few, the graduation or transfer rate for TAG students was significantly higher. At Kean University, for instance, where more than three in 10 students got an average $5,166 in TAG this year, the most recent graduation data shows that 65% of TAG students either graduated or transferred within six years, compared with 48% of the general student population.

"The TAG grant does allow students at Kean University to be able to stay enrolled and graduate," said Margaret McCorry, a university spokeswoman. "The grant is a resource that provides affordability. The TAG grant, along with other federal aid and Kean University scholarships, in many circumstances allows students to finance their tuition with little to no student loan debt."

Some of the RAND report's findings may give members of the state TAG study commission fodder for discussion. For instance, the researchers found that TAG did not increase graduation rates for moderate-income students at private schools, perhaps because it offset other aid or because it was  a disincentive to leave a school that was not a good fit for them. There was also no conclusive evidence that TAG increased initial enrollment in colleges.

"The mix of results suggests that TAG aid, as currently delivered, might not be sufficient to overcome barriers of college affordability for many of its recipients," the report states.

The report's authors offered three main takeaways for those considering changes to the grants:

  • TAG can play an important role in the state's goal of getting 65% of adults degreed, with increased funding for TAG supporting faster degree completion;
  • In the private college sector, giving more of the lowest-income students the maximum award likely would have a significantly greater impact on four-year graduation rates than giving smaller awards to more moderate-income students;
  • Since TAG was not proven effective at increasing college applications, communicating awards earlier to potential students might help boost enrollment.

"TAG is clearly helpful for many students, but the financial challenges of college still lead to dropout for other students," the report's authors wrote. "The study suggests that increased funding for TAG could accelerate progress by supporting faster degree completion. As leaders continue to develop programs and policies to make college more affordable, they should focus resources where aid is likely to have the largest impact. This includes supporting students at public colleges and universities broadly and potentially shifting more resources to the lowest-income students at community colleges and private colleges and universities."