New Jersey’s State Grant Program

Research Report

New Jersey’s State Grant Program

Strengths, Weaknesses, and Pathways to Achieving the State’s Goals

Abstract

New Jersey’s state grant program delivers the highest level of need-based aid per student in the country. And the state’s major grant program, the Tuition Aid Grant (TAG), funds all eligible students, rather than excluding students when the funding runs out. But different levels of grant aid for enrollment in different institutions within sectors, combined with a confidential need analysis formula, make it difficult for students to predict how much support they will receive. Large differences in award levels create tensions among higher education institutions both within and across the public and private sectors in New Jersey.

This report is based on analysis of state data, a review of existing state reports, and discussions with a wide range of constituents, including state officials, institutional administrators, and advocacy organization representatives.

New Jersey modifies the federal need analysis methodology, basing TAG awards on the New Jersey Eligibility Index (NJEI) instead of the federal expected family contribution (EFC). We find that less than half of the full-time students in New Jersey who have $0 federal EFCs appear to fall into the lowest category of the NJEI. A much larger share of $0 EFC independent students than dependent students fail to receive the maximum TAG award because they are not in the lowest-need category.

Students are not eligible for TAG for as many terms of study as for Pell, and New Jersey has not followed the federal government’s lead in providing additional need-based funding for summer enrollment. In addition, the allocation of aid means that minimum TAG awards are high enough to create a large difference between students who just qualify for TAG and those with a slightly higher NJEI who miss out on the program.

The following actions would strengthen the TAG program:

Improve NJEI transparency. The state should make the TAG eligibility process simpler and more transparent, clarifying differences between the federal EFC and the NJEI and ensuring that additional verification hurdles do not interfere with access to college.

Revisit TAG award differences across institutions. Instead of focusing only on differences in published tuition prices, policymakers should focus on differences in the prices institutions charge, net of institutional grant aid, in determining appropriate levels of TAG awards across sectors. Differences in award levels across institutions within sectors are also probably larger than they should be, and the state should review them.

Smooth TAG award levels across levels of ability to pay. The state should revisit the tables determining the size of TAG awards for students at different NJEI levels at each institution, ensuring that differences in award levels associated with differences in NJEI are consistent within similar institutions.

Use grant aid to support degree completion. The state should make an effort to include extra funding for summer enrollment, support for students enrolled at least half time, and more equitable funding for independent students.

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