Legislators allocate emergency funds for needs-based awards

Governor Dennis Daugaard signed Senate Bill 91, declaring an emergency for the South Dakota Needs Based Grant Program and allocating $150,000 in emergency funding to the South Dakota Board of Regents March 30.

The law is a temporary fix for a $1.5 million program established in 2013 to fund needs-based scholarships for South Dakota residents.

The monies allocated to South Dakota’s colleges and universities were supposed to come from the interest earned on the $1.5 million added to the state’s Education Enhancement Trust Fund.

However, the interest earned was not enough to fund the amount needed to award financial aid.

“It is not very much money,” President James Abbott said. “It’s supposed to encompass the students in the entire state, and it’s just the interest on that money.”

The state also declared an emergency last year and supplemented $200,000 to the program.

The money goes to the SDBOR, which then distributes it to participating institutions, including 18 of the state’s public, technical and some private colleges.

“I would say this is pretty unique to South Dakota,” said Paul Turman, SDBOR vice president for academic affairs.

Minnesota, for example, has an entire staff devoted to needs-based financial aid and awards up to $150 million each year.

“I would say when you compare to our region, we fall significantly behind,” Turman said.

Each individual university is ultimately responsible for distributing the money to students. Last year, the state awarded $229,000 to students through needs-based scholarships.

The University of South Dakota received 15 percent of the allocation, or $33,500, which allowed USD to grant scholarships to 284 students last year, Turman said.

Students can get between $500 and $2,000. However, most students get $700 to $1,000 through the program.

Students must be residents of South Dakota and attend one of the 18 participating schools to be eligible. There is no form or application.

Students have to work with the school’s financial aid director to determine if they are eligible based on other grants or scholarships, tuition reductions and expected family contributions.

“(The SDNBGP) provides the campuses with a small pool,” Turman said.

South Dakota was the last state in the country to establish a needs-based scholarship program, according to a 2013 Associated Press report.

“It’s a start,” Turman said. “I think they did a great job putting in place the enhancement trust fund.”

Turman said he would like to see the state contribute more to the base funds rather than have all the money come from the interest.

The original 2013 bill had allocated $5 million to start the program, but the law that was passed only had $1.5 million.

“I do understand being restricted budget-wise. I get that. It’s a demanding state, we don’t have the population that Minnesota has by any means,” said Student Government Association president Sami Zoss.

Abbott also believes there is not enough money for needs-based financial aid.

“The fact is, it’s a drop in the bucket of financial need for students,” he said.