NCPA - National Center for Policy Analysis


April 28, 2006

Giving college grants directly to students would expand Arizona's education options, and would help make the delivery of higher education more efficient, says Vicki Murray of the Goldwater Institute.

Giving grants directly to students could:

  • Yield an estimated average annual savings of $768 million for the state of Arizona.
  • Expand students' education options, and help make the delivery of higher education in Arizona more efficient.
  • Create more options since students could use their higher education grants at any postsecondary institute -- public or private -- giving school officials powerful incentives to keep costs and tuition prices down, or risk losing students to competitors.

Here's how the grant system would work, says Murray:

  • Every in-state undergraduate Arizona student would receive grants for college.
  • Beginning in 2006, the $1.3 billion in lump-sum state and local appropriations to public postsecondary institutions, for current operating expenses, could instead directly fund full-time resident undergraduates in the form of grants.
  • Students would receive $8,000 annually if they enroll in a four-year institution, and $5,000 annually if they enroll at a two-year institution -- public or private.
  • The $2.4 billion in revenue that public institutions currently receive from tuition and fees, as well as local, state and federal grants for capital and special projects, private gifts and grants, and endowment revenue would remain intact.

Colorado universities already have a similar program called Private Postsecondary Education Student Financial Assistance Program (PFAP), which saves the institutions between $7,000 and $14,000 per student, per year, says Murray.

Source: Vicki Murray, "Cash for College: Bringing Free-market Reform to Higher Education," Goldwater Institute, No. 208, March 14, 2006.


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