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Finance Authority of Maine reduces grant, worries more pain to come

Posted on Dec. 08, 2008, at 12:00 a.m.

University of Maine students were notified on Dec. 1 of a $60 per-student reduction of the State of Maine Grant, which amounts to a loss of about $155,000 in state-funded financial aid for UMaine. Students should expect similar reductions in the future.

According to the Finance Authority of Maine (FAME), all full-time undergraduate in-state students from all the University of Maine System campuses, roughly 13,000 in all, were affected by the grant’s decrease – 2,600 at UMaine. Decreased state funding caused by Gov. John Baldacci’s budget cuts forced the drop in financial aid.

“From a financial aid perspective, we in the aid community looking at all of the students – and specifically here at Orono – felt that the impact would be less if we spread it out among all the students,” said Peggy Crawford, UMaine’s financial aid director. “For us here, the maximum grant for spring semester, for students who are eligible, instead of being $600 it’s $540.”

Crawford said FAME and the university system considered two options for managing the grant reduction: taking the grant away from its recipients with the highest income, or spreading out the cut among all of the students. They chose the second option.

FAME and the university system considered spreading the $60 between students’ fall 2008 and spring 2009 bills, but decided it was a bad idea to bill students for the $30 FAME gave them this semester, Crawford said.

The grant reduction accounts for about $155,000 in financial aid at UMaine, Crawford said. She was unsure how much future financial aid cuts might be. The whole cut accounts for a loss of about $780,000 of financial aid for the entire UMaine System.

“I don’t think it was avoidable,” said FAME’s acting director, Beth Borbowitz. “I’m hoping there won’t be more cuts for 2009.”

Borbowitz and Crawford acknowledged the likelihood of more decreases to state-funded financial aid in the future.

“When the governor came out and said that he was looking for a 10 percent reduction across the board, FAME, because of the size of dollars – especially because of the grant program – that’s where they had to take the cut,” Crawford said.

On Nov. 19 the university was ordered by the governor to cut $5.3 million from its budget, as part of Baldacci’s curtailment order to state agencies – $1.2 million less than what the state demanded earlier in the semester. UMaine’s curtailment was reduced to mitigate the direct impact on its students, according to David Farmer, a governor’s office spokesperson.

“We have no solid plans to reduce further grant funding. This is the amount that we are taking from the University of Maine and the University of Maine System for 2009,” Farmer said.

Farmer acknowledged the possibility of future reductions and said the state currently has no plans to introduce more financial aid.

“I hope we can keep the allocation at FAME the same as it is right now, so that the same students who are eligible this year will be eligible next year,” Crawford said. When asked whether she felt that was a realistic hope, she said, “Probably not.”

“We spread the pain, but we understand it’s painful,” Borbowitz said.

Campus Currents: John Baldacci