Student grant system spurs unease.

Byline: Greg Bolt The Register-Guard

A landmark overhaul of Oregon's student financial aid system faces last-minute adjustments after legislators raised concerns about what will happen if too many people seek college grants.

On Friday, members of the education subcommittee of the Joint Ways and Means Committee asked that an amendment be drawn up to clarify how grants will be adjusted if demand is greater than expected. The concerns are not expected to block passage of the legislation, which could move out of the subcommittee as early as Monday.

The new financial aid scheme, known as the Shared Responsibility Model, changes how tuition grants are allocated and significantly increases the amount most students will receive. It is part of a high-profile effort to make college more affordable in Oregon, where sharp increases in tuition and one of the lowest levels of state financial aid in the nation have combined to drive up student debt and put college out of reach for many residents.

Under the new model, anyone willing to contribute a specified share of the cost is guaranteed an education at a state college or university. The share for students is set at about half the annual cost of attendance, or $7,500, paid through work, scholarships or borrowing.

After figuring in a family contribution based on income and any federal grants, the state would pay whatever costs remain. Funding for the program would almost double, to $110 million from the current $60 million.

The new program uses a complex computer model developed by the Western Interstate Commission for Higher Education to calculate the size of the grants, which are expected to average $2,103, up from the current $1,207. But subcommittee members worry that if the model is wrong - if, for example, more students apply for grants than expected - the state wouldn't be able to keep its promise to help all those who qualify.

That could force the Oregon Student Assistance Commission, the agency that administers the grant program, to change the rules by reducing the size of grants, changing the income limits or making other adjustments. Those changes also might have to be made in the middle of the academic year after students have been told how much they'll receive, forcing them to scramble to find ways to fill the gap or even to drop out.

At Friday's meeting, the subcommittee directed the staff to prepare an amendment that sets statutory requirements for a steering committee that will monitor the program, and expands the panel's membership. It also will offer guidance on how to adjust grants should funding fall short.

Subcommittee Chairman Rep. Larry Galizio, D-Tigard, said a big part of the issue is legislators' discomfort at leaving decisions on how to adjust the grants up to the student assistance commission. The steering committee, which will include two legislators, is meant to provide some oversight and advice on that process.

What legislators want to avoid most, Galizio said, is a situation where the commission promises higher grants than it can deliver.

"That would be a disaster," he said following the meeting. "I think everyone is very concerned about that."

Margie Lowe, a higher education policy adviser to Gov. Ted Kulongoski, said the governor's office is confident the models will be accurate and that major changes to the grant program won't be needed.

But if they are, she suggested they be based on family income to ensure that the most needy students see the least reduction.

But she said the state shouldn't underestimate grant awards, either, because that could cause some students who need help to decide not to go to college.

Galizio acknowledged that because the model is new and involves so many variables lawmakers are simply nervous about how it will work. In the end, said Sen. Vicki Walker, D-Eugene, it's going to require some faith.

"We just have to have a little more trust here," she said.