Senate Bill 2724: MTAG Expansion and Promise Grant

March 7, 2024April 3, 2024 Bill Tracker

Latest Action

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The Senate Appropriations Committee failed to take action on SB 2724 by the April 2 deadline, causing the bill to die in committee.

Explanation of the Bill

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Senate Bill 2724 would revise the existing Mississippi Tuition Assistance Grant (MTAG) program to extend eligibility to low-income and part-time college students, increase award amounts, and drop high school GPA and ACT requirements. SB 2724 would also expand MTAG to include “Promise Grants” to cover the remaining cost of tuition at community college for recent high school graduates “after all other state, federal, institutional, and private aid has been applied.”

MTAG currently offers financial aid awards of $500-$1,000 but limits eligibility to full-time college students who do not qualify for federal Pell Grants, thereby excluding most low-income students. Changes to MTAG under SB 2724 would extend eligibility to an estimated 37,800 additional students as well as effectively make attending a Mississippi community college tuition free for many students. 

Changes to MTAG: Eligibility and Award Amounts

Under SB 2724, students meeting the following eligibility requirements would qualify for an MTAG award:

• Resides in Mississippi
• Enrolled at least half-time at a two-year or four-year college or university
• Completed the Free Application for Federal Student Aid (FAFSA)
• Completed the Mississippi Aid Application (MAAPP)

Maximum MTAG award amounts under SB 2724 would be as follows:

Family Income	Freshman/Sophomore*	Junior/Senior
0-50% of Median Income	$1,000	$2,000
51-99% of Median Income	$750	$1,500
100%+ of Median Income	$500	$1,000

*Freshman/Sophomore awards would apply to students attending a two-year community college

Extending eligibility to part-time and low-income students would represent a significant change to the MTAG program. Because MTAG currently excludes students eligible for the maximum Pell Grant (a federal needs-based grant intended for low-income college students)—and because the other two state financial aid programs, HELP and MESG, require ACT scores above the Mississippi average—most low-income college students in Mississippi remain ineligible for any state financial aid. As a result of extending eligibility to low-income students and part-time students, a presentation on this proposal to the Mississippi Postsecondary Education Financial Assistance Board in September 2023 estimated that an additional 37,800 students would qualify for MTAG—more than tripling the program’s reach, primarily to low-income students.

Low-income students (i.e., students whose families earn less than the median income) would also qualify for larger awards than are currently offered under MTAG, with juniors and seniors eligible for up to $2,000 a year. Over the course of four years, a student with family income under 50% of the median could receive up to $6,000 in financial aid from MTAG. Because the total cost of attendance at four-year universities like the University of Mississippi can cost up to $18,000 a year, MTAG recipients would still need to rely on other forms of financial aid (e.g., institutional scholarships or Pell Grants) and student loans—but even a partial reduction in the “net cost” would reduce reliance on student loans and could nudge prospective students to pursue (or continue to pursue) a postsecondary degree who may not have otherwise. In other words, an expanded MTAG would be a valuable tool in helping Mississippi reach its workforce development goal of 55% of Mississipians with a degree or industry-recognized credential by 2030.

Promise Grants

SB 2724 would also provide “Promise Grants” to cover the remaining cost of tuition at community college for recent high school graduates “after all other state, federal, institutional, and private aid has been applied.” There would be stricter eligibility for Promise Grants than for MTAG awards: in addition to being a “recent” high school graduate (SB 2724 does not define “recent”), Promise Grant recipients would have to be enrolled full-time.

Covering the remaining cost of tuition after all other sources of aid have been applied is known as a “last dollar” program. As a “last dollar” program, Promise Grants would primarily benefit middle- to upper-income students who do not qualify for need-based aid programs such as federal Pell Grants. Because MTAG is currently designed to exclude Pell-eligible students (i.e., it excludes lower-income students and primarily benefits middle- to upper-income students), Promise Grant recipients would likely be students who are already eligible for state financial aid.

Cost

According to the September 2023 presentation to the Postsecondary Board, expanding MTAG eligibility and increasing award amounts could cost an additional $31.5 million. According to the Senate Appropriations Committee, the Promise Grant component is estimated to cost between $7.5 million and $10 million. Together, these two components would add roughly $40 million to the roughly $10 million spent on MTAG during FY 2023. Although this expansion would make MTAG the most expensive state financial aid program (surpassing the HELP grant, which cost roughly $30 million in FY 2023), as stated above, expanding MTAG under SB 2724 would extend financial aid to an estimated 37,800 students, many of whom are low-income and ineligible for state financial aid currently. (As we also stated above, we do not expect the Promise Grant component to reach any students who are not currently receiving financial aid).

The expansion of eligibility and increased awards for MTAG under SB 2724 is similar to the “MTAG Works” proposal in 2023, which ultimately did not pass, though there are some key differences. SB 2724 does not include a “bonus” grant for students in a “high-demand” field. The 2023 MTAG Works proposal also initially included cuts to the Higher Education Legislative Plan for Need Students (HELP) grant program; HB 994 does not touch any state financial aid programs aside from MTAG.