Bill would add rules for Indiana financial aid

A bill making its way through Indiana's General Assembly would change the laws governing need-based state financial aid to add more requirements for students.

Indiana's two largest grant programs would see new stipulations for credit hours that a student must successfully complete to remain eligible, The Journal Gazette reported.

Those enrolled in the 21st Century Scholars program would drop down to the Frank O'Bannon grant if they complete fewer than 30 credit hours a year. O'Bannon grant recipients who complete fewer than 24 credit hours a year could lose their scholarship.

A recent survey of 9,000 Indiana college students who are receiving state financial aid found that only half are taking enough courses to graduate in four years.

"We have to do something different to encourage kids to get in and out in four years," Rep. Tom Dermody, R-LaPorte, told The Journal Gazette. "We're focusing on the kids progressing toward a degree."

Dermody is sponsoring the bill, which passed the House 77-18 and is now in the Senate.

Indiana spends about $250 million a year on the O'Bannon and 21st Century Scholars programs. More than 73,000 students are enrolled in the two programs.

The 21st Century scholars program provides full tuition and fees at public universities for students who sign up in middle school and meet certain character requirements. These grants, on average, are worth about $7,600 a year. The O'Bannon grant provides a maximum of about $3,900 a year. Both are need-based programs with income requirements.

The changes would be phased in over multiple years so current college students would not be affected.

The bill also would create incentives for students who do well. The O'Bannon grant would provide an additional $1,400 to students who graduated high school with an honors diploma. For college sophomore, juniors and seniors, the grant would award an extra $1,400 to those who earned at least a 3.0 grade-point average during the previous academic year. Students who completed 39 or more credit hours during the previous academic year also would get an additional $1,300.

Students who get a bachelor's degree in four years would receive a $1,000 bonus, which could rise to $1,500 if they graduate early. The money could go toward moving expenses for a job, a professional wardrobe or to pay down student loans, among other things.

"We hope the students will be able to stay in by changing their behavior," Mary Jane Michalak, associate commissioner of student financial aid, told The Journal Gazette. "That means completing courses. Right now, the state is paying for courses students never complete."

The bill also requires public universities to create a guide for every student that tells them what courses they need to take to graduate in four years. The bill also says universities must provide free courses if a student can't get into a class through no fault of their own.

State financial aid covers only four years' worth of classes.