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Texas has traditionally operated under a "low-tuition, low financial aid" model to ensure access to higher education. The deregulation of tuition rates beginning in fiscal 2004 established a market-based model that means higher tuition rates for students; in response, the state is establishing a greater commitment to financial aid.

To ensure the most efficient use of increasing amounts of state financial aid, however, the state should develop a long-range plan for state financial aid that meets the state's enrollment and participation goals. These goals are outlined in Closing the Gaps, the state plan developed in 2000 by the THECB to increase enrollment in higher education by 2015. Most of the state's financial aid programs developed during a time when it was assumed that tuition rates would remain relatively low; the state needs to rethink and realign its programs under the new deregulated, market-based model and the Closing the Gaps plan. Standardizing eligibility and benefits, to the extent practicable, and instituting time and dollar limits, would increase efficiencies across the board.

In the new era of increasing financial aid, policymakers and students need more information concerning institutional aid. 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 enable students and their parents to become more informed about financial aid availability at institutions.

Support for new state aid programs designed to assist financially needy students increased last year for students primarily attending four-year institutions. TexasNextStep, also proposed in the last legislative session, would guarantee tuition, fees and books for up to three years for students attending community, technical and state two-year institutions if they enroll within 16 months of high school graduation. The program is designed to forward the goals of Closing the Gaps 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.