Cover: The Future of New Jersey's Tuition Aid Grant

The Future of New Jersey's Tuition Aid Grant

A Review of Options and Evidence

Published Aug 5, 2021

by Drew M. Anderson, Melanie A. Zaber

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Research Questions

  1. For each issue put before New Jersey's TAG Study Commission related to program design and functionality (such as graduation rates, program design choices and funding, alternative eligibility calculations, and alignment with federal methods), what actionable evidence is there?
  2. For each policy option considered by commission members to improve the program, how many students and dollars would be impacted? What processes would have to change, how might the change be enacted, and how might New Jersey evaluate whether the change achieved its objective?
  3. What other considerations could be important for the state and for other need-based aid programs?

Experts from the RAND Corporation prepared this independent report on New Jersey's Tuition Aid Grant (TAG) program for low-income college students. TAG is the nation's most generous state-funded financial aid program on a per-resident-undergraduate basis. Currently, TAG distributes around $475 million in grants per year, and an award covers about 40 percent of the average recipient's tuition and fees. Recent evidence shows positive impacts of the program on graduation. Leaders in New Jersey are further evaluating TAG to explore how the program design has evolved and how it might be improved.

The authors used new data sources to build actionable evidence on each of the issues put before a legislatively mandated TAG Study Commission. These issues include TAG recipients' graduation rates, the history of program design choices and funding, alternative eligibility calculations, and alignment with federal methods. The authors drew on conversations with the Higher Education Student Assistance Authority and the commission, analysis of student-level data from New Jersey, analysis of institution-level data from the College Scorecard, and context from other states and broader research on college affordability. The authors evaluated policy options discussed by commission members and put forth some added considerations that could be important for the state and for other states with need-based aid programs.

Key Findings

TAG's funding levels have increased to meet strong demand from New Jersey resident students

  • TAG spending increased faster than spending on public aid programs in other states and at the federal level from 2012 to 2019.
  • The increase was driven primarily by growing enrollment at New Jersey universities but also by increases in program generosity.

Recent policy changes were consistent with research evidence

  • The TAG program allocates larger awards to students with fewer financial resources and to students attending colleges with higher tuition costs. Within this structure, the commission discussed specific ways to target aid dollars more effectively.
  • The authors estimated that TAG had a positive effect on four-year degree completion at public universities and potentially a larger positive effect for the lowest-income recipients at other institutions.
  • New Jersey increased TAG award amounts at state colleges and public research universities relative to other institutions, and the commission discussed future changes that would provide larger increases for the lowest-income families.

TAG differs from the federal Pell Grant in key ways

  • Pell Grants are available for summer terms and for more overall semesters during a student's college career. With many TAG recipients taking longer than their grant eligibility period to graduate, an expansion could provide needed support.
  • Among independent (adult learner) students, there are significant differences in the amount of financial need assessed by TAG relative to the Pell Grant, resulting in lower TAG awards.
  • The commission discussed adjustments to expand TAG to align with federal procedures and to better serve students.

Research conducted by

The research described in this report was sponsored by the ECMC Foundation and conducted by RAND Education and Labor.

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