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For the first time ever, financial aid given to undergraduate students by state universities has surpassed the amount provided by the federal government, according to the Iowa Board of Regents.
According to a board financial aid report, in the 2023-2024 academic year, institutional financial aid for undergraduate students grew by more than 5% to $319 million, the fourth consecutive year of increases. Federal undergraduate aid sat at just over $311 million in the same year.
With federal, state, institutional and other forms of financial aid combined, students received a total of $1.18 billion in financial aid, an increase of $600 million from the previous year.
The board discussed its annual financial aid report at its Thursday meeting after hearing presentations from financial aid experts at Iowa’s public universities.
Iowa State University Student Financial Aid Director Chad Olson said in Iowa, as well as across the U.S., federal financial aid has decreased due to less support provided for federal work study programs and the Federal Supplemental Educational Opportunity Grant.
“As those resources go down, institutions have to find a way to help make up some of those shortfalls,” Olson said.
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Regent David Barker called the change in federal financial aid allocations “striking,” as it has dropped from almost $246 billion in 2010-2011 to just under $141 billion last academic year.
State aid grew by $6.5 million in the 2023-2024 academic year due to the implementation of a state workforce grant program, according to the report.
According to the report, students with the most financial need receive the most financial aid, on average. Students with an adjusted gross income (AGI) of $30,000 or less paid an average of $12,254 in 2023-2024, an increase of almost $350 from the previous year. The only income level to not see an increase in net price was the $30,001-$48,000 range, which decreased by just over $350.
The average net cost of all public university students at all income levels in Iowa was $18,660, according to the report. The University of Northern Iowa has the lowest average net price of $15,931, with Graceland University in Lamoni in second place and ISU in third with $17,374. The University of Iowa ranks fifth behind Buena Vista University in Storm Lake with an average net price of $20,121.
UNI Director of Financial Aid Tim Bakula said during the meeting the net price of a public university education in Iowa is, on average, around $6,000 less than the net cost of attending a private university.
“Oftentimes students, especially at this time of year, are going to be facing … decisions to make about where to attend, and if value and affordability is one of their first or second types of metrics, I think any of the three regents (universities) would win out,” Bakula said.
Presenters also spoke about the debt incurred by some Iowa college students, which UI Director of Student Financial Aid Brenda Buzynski said the total average has decreased from previous years due to fewer students graduating with debt.
According to the report, debt levels have generally remained steady, but the percentage of students who borrow funds for college decreased at each university, all sitting between 50% and 60%. Nonresident debt remains higher than resident debt, the report stated.
“There are probably many reasons for this, but number one, I would attribute a lot of it to the financial aid wellness information and all the efforts going on in each campus to strive towards informing and educating students about the importance of financial literacy,” Buzynski said.
FAFSA process becomes smoother, concerns linger about changes
One ISU student received a very special birthday gift last week, Olson said during the meeting — a completed 2024-2025 FAFSA, more than a year after they started the submission process.
The student’s 2025-2026 FAFSA, which Olson said has rolled out with much fewer issues than in the past cycle, was filed soon after with no problems.
University students in Iowa have dealt with changes that have come about with the new FAFSA, presenters told the board, from more Pell grants to fluctuating aid amounts due to new assets that must be listed and the removal of consideration of siblings also in college.
Olson said ISU has seen a 5 percentage-point bump in Pell-eligible FAFSA filers, from 28% to 33%, compared to a national 12% increase in Pell-eligible students. The UI saw an increase of 6.5 percentage points to 28%, and at UNI Pell-eligible filers grew from 30% to 36%.
Some negative impacts students and families have seen from the new FAFSA stem from changes requiring farm assets and small businesses be listed on the form and barring situations where multiple students are in college at the same time from being counted.
The Family Farm and Small Business Exemption Act, introduced by Sen. Joni Ernst and Sen. Michael Bennet of Colorado in early February, would exempt farmland and operational equipment, as well as small businesses with fewer than 100 employees, from being listed on the federal student aid form as assets.
Regent Hensley expressed her wish to show the board’s support for this legislation in some way, as it would be positive for Iowa students who have seen their aid offers changed due to the new form.
Olson said he and Buzynski have both spoken with Iowa congressional delegations about the legislation in order to show their support.
“I would hope that we can … be supportive, whether it’s through lobbyists or even sending a letter on behalf of the board of regents, because this is something that has really been an issue for families, farm families and small businesses, and they are working diligently to get the revisions made so that it doesn’t impact our families,” Hensley said.
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