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Taking The Next Step:
Financial Aid In Texas

December 2004

The Honorable David Dewhurst
The Honorable Tom Craddick
Members of the 79th Legislature

Fellow Texans:


In accordance with the requirements of Article IX, Sec. 11.29 of the 2004-2005 General Appropriations Act, I am pleased to present this report, Taking the Next Step: Financial Aid in Texas.

Education is the cornerstone of democracy, and access to education is the key to maintaining its strength. Ensuring an educated work force is also the key to a strong economy for our state and nation.

Texas prides itself in the access to an affordable higher education it has provided for its citizens, primarily through low tuition rates. Now, more than ever, it is critical that we take immediate measures to ensure that the deregulation of tuition at our state's universities, which has resulted in higher tuition rates, does not reduce access to higher education.

To ensure the most efficient use of increasing amounts of state financial aid, the state should develop a long-range plan that supports the state's enrollment and participation goals. Standardizing eligibility and benefits, to the extent practicable, and instituting time and dollar limits would streamline programs and increase efficiencies across the board.

Requiring institutional aid to be reported to the state by program would enable policymakers to make more informed decisions about financial aid programs and funding. Requiring links to these programs on the state's College for Texans Web site would assist students in identifying additional aid they might otherwise miss.

Support for new state aid programs designed to assist financially needy students increased last year primarily for students attending four-year institutions. TexasNextStep, proposed in the last legislative session, would guarantee tuition, fees and books for recent high school graduates attending community, technical and state two-year institutions.

The program is designed to meet the state's enrollment and participation goals in the most efficient way possible -- by taking advantage of the lower tuition rates at community colleges and by requiring students to apply for and use federal grant aid before state tax dollars. Texas has another opportunity in the upcoming legislative session to take the next step and fill the financial aid gap for students attending the state's two-year institutions.

I will remain available to answer any questions concerning the recommendations in this report. Please let me know if I can be of further assistance.

Carole Keeton Strayhorn
Texas Comptroller