Missouri State Auditor's Office - Yellow Sheet

State Funding of Student Financial Assistance Falls Short

Missouri's state funded student financial assistance ranks low while tuition ranks high when compared to six surrounding states (Arkansas, Illinois, Kansas, Kentucky, Nebraska, and Oklahoma). Most students meeting eligibility requirements for the state's largest need-based student financial assistance programs did not receive assistance due to funding shortfalls. In addition, the amount of individual student awards for the state's two largest student financial assistance programs (Gallagher and Bright Flight) has not been increased in 20 years.

Missouri's methodology to distribute assistance from its largest need-based program (Gallagher) favors students attending private institutions, with students attending private institutions being eight times more likely to receive assistance. Also, as reported in a prior SAO report, DHE continued to rely on institutions to determine student eligibility without verification. As a result, DHE could not assure the accuracy and or reliability of eligibility determinations for award recipients.

Missouri's student financial assistance ranks low while tuition ranks high

For the seven state's reviewed, Missouri's student financial assistance (grants) ranked fourth in terms of assistance provided per student and only fifth in terms of percentage of students assisted. While student financial assistance ranked low, our August 2006 report showed Missouri's tuition level ranked highest in a comparison among seven Big 12 states and second only to Illinois among contiguous states, in fiscal year 2005. (See page 7)

Method of distributing assistance from the largest need-based program provides advantage to students attending private institutions

Only 2 percent of students attending public institutions received student financial assistance through the Gallagher Program compared to over 16 percent of students attending private institutions. Proposed changes to the method used to determine need and address the eligibility inequity will require legislative approval. The audit also found the majority of students meeting eligibility requirements for need-based scholarships did not receive awards due to state funding shortfalls. (See page 8)

Improvements still needed in oversight of student financial assistance programs

Although DHE implemented a new database system in April 2005 to better manage the state's student financial assistance programs, it still relies on institutions to determine recipient eligibility. As a result, DHE cannot assure the accuracy and/or reliability of eligibility determinations for award recipients. (See page 10)