Executive Summary

Year after year, prospective and current students see the cost of attending a public college or university steadily increase. As college affordability continues to be a major concern, many states have worked to innovate and update their funding systems to increase affordability and close achievement gaps. Across the country, state-funded financial aid has increased 15 percent per student on average over the past two decades.

One would expect Massachusetts, which prides itself on its public education system, to be a leader in providing support and service to its public higher education students. Sadly, the opposite has characterized the last two decades: state-funded financial aid in Massachusetts was cut by 47 percent between 2001-2021. Despite being one of the wealthiest states, Massachusetts ranks 37th in the nation in state-funded financial aid to residents and its students carry the 5th highest debt burden in the nation.

As we highlighted in a previous report, the cost of attending a public university or college in the Commonwealth has jumped 59 percent since 2000. During this same period, the average household income in Massachusetts saw a meager 13 percent increase. In order for future generations to access public higher education, state-funded financial aid plays an even more critical role than ever before.

Recently, there has been a concerted effort to increase funding for student financial aid, an important step to reverse decades-long trends of disinvestment. For Massachusetts to truly reach its key educational priorities, the student financial aid system needs to see continued, significant investment that addresses growing financial unmet need and helps simplify the path for students so that getting a credential or degree from the state’s public higher education system is more accessible and attainable.

In this report, we look at state-funded financial aid available to students in Massachusetts and its role in increasing access to public higher education. Our research shows that:

State financial aid per student has steadily declined in the last two decades, eroding the purchasing power of state grants and scholarships. The total state aid students receive covers only a fraction (12 percent) of the cost to attend college.
In an effort to distribute limited funds in the most targeted manner, the state has created more than 40 different small grants, scholarships, and tuition waivers. While well-intentioned, this has created an unnecessarily complex and confusing financial aid system to navigate. The process alone ends up creating barriers for the students who arguably stand to benefit the most from state-funded financial aid and access to public higher education.
The lack of a clear and strategic approach to state-funded financial aid has led to an inequitable distribution of aid across the sectors of higher education. This runs counterproductive to the Commonwealth’s stated goals of equity and accessibility in public higher education – with students at the state’s community colleges receiving half of the financial assistance that their peers at four-year public and private institutions receive.

This report highlights the severe implications we are witnessing and will continue to experience without a strategic long-term agenda and substantive re-investment in public higher education – at the institutional and student level:

Growing Unmet Need: The majority of public higher education students in Massachusetts are left with a large financial gap: 8 out of 10 students at the state’s four-year public institutions have $12,000 in unmet financial need each year; and 9 out of 10 community college students have $8,557 in unmet need each year.

Growing Student Debt Burden: In the last two decades, more and more students have been forced to take out burdensome loans in order to attend one of the state’s public institutions. The number of students taking out loans to attend a four-year public university jumped by a staggering 105 percent while the number of students borrowing to attend a community college in Massachusetts increased by 45 percent.

Growing Educational Gaps: Lack of funding, coupled with the complex financial aid system, negatively impacts students from underprivileged backgrounds and first-generation students the most. Even after accounting for academic readiness, college enrollment, persistence, and graduation rates are significantly lower for low-income and underrepresented students.
Growing Economic Instability: The state’s chronic disinvestment from higher education is failing the public institutions that do the most to drive economic mobility. Without a clear commitment and a sizable and reliable investment in public higher education and state-funded financial aid, the state will continue its race to the bottom, putting its overall economic stability and competitiveness at risk.

The Hildreth Institute is a research and policy center dedicated to restoring the promise of higher education as an engine of upward mobility for all. We argue here that we can no longer rely on a financial aid system that depends primarily on student loans. We have a historic opportunity to re-invest in higher education in a way that counteracts established inequities. It is time to rethink the distributional effects and equity impact of our financial aid system and of recent efforts to increase affordability.

Here we propose that the state make a true commitment to public higher education students of the Commonwealth and reform and refocus their efforts in terms of financial aid.

A well-funded centralized program with clear award criteria that apply to a large number of residents would ensure that students predictably know that the state is there to financially support them in their quest for upward mobility through a degree. The state must also reinvest in public higher education institutions so they are adequately equipped to provide the critical wraparound support and services that take into account the changing demographics of our public institutions’ student bodies. Many students, particularly first-generation and/or adult learners, face important barriers to higher education that such support programs can alleviate. Wraparound programming encompasses a variety of supports, including tutoring, counseling, childcare, transportation, and other non-instructional services. A growing national body of evidence indicates that the availability of such comprehensive support services can be the deciding factor whether a student enrolls and persists toward their degree or credential.

It is time Massachusetts extends its commitment to public education past grade 12.