Arizona's system of providing financial aid for university students is failing to meet the need, according to one member of the state Board of Regents, which governs the schools.
Students in the three state universities received about $1.3 billion in financial aid during the 2008-2009 school year, the most recent report available. A majority of the awards were in the form of student loans - 47.8 percent. Federal, institutional, private, and state scholarships and grants, and employment, including graduate assistantships, made up the rest.
But even with that, only about 60.9 percent of the need was met, the report states.
Fred DuVal, vice chair of the Arizona Board of Regents, said Arizona falls behind other states when it comes to state-funded financial aid programs.
"Arizona has never really had a fundamentally state-supported student aid package. We have a small one - $5 million to $7 million in it this year. Traditionally it's been $2 million to $3 million," he said. "It's really a nonimpactful component of financial aid when our financial aid need is north of $300 million to succeed. We are doing the best we can, but we're certainly not meeting the needs."
A portion of tuition paid by each student at the state universities - Arizona State University, Northern Arizona University and the University of Arizona - goes into each school's fund for financial aid.
"The schools themselves are putting $240 million in financial aid. It's money that comes out of the rest of the enterprise: professors' salaries and all the other things tuition and other revenue has to pay for," DuVal said.
The question of financial aid has been in the spotlight in the last month because of a debate about whether to alter or eliminate the Regents' High Honors Endorsement, previously known as the AIMS Scholarship.
The scholarship was created in 2006 and is awarded to any Arizona freshman who exceeds standards on Arizona's Instrument to Measure Standards, as well as meet other criteria. The scholarship is renewable.
But it is costly, university presidents have argued.
At the last board meeting, the regents chose not to make any changes to the scholarship for now.
Arizona lacks "aspiration" more than "resources" when it comes to helping students achieve higher education, DuVal said.
"It's a much deeper philosophical point," he said. "Arizona doesn't aspire to compete in the new economy in an organized, nonpartisan, strategic way. We lack ambition. We lack aspiration. We're satisfied with the mix we have, leading the nation in call centers. There's no urgency about that."
About 45 percent of students graduating from the state's universities have debt, according to the Project on Student Debt website. The average debt is $17,059, ranking Arizona close to the bottom of all states in terms of the amount of debt and number of students with debt upon graduating.
Not that students don't have debt.
ASU Polytechnic master's student Matthew McCoy will graduate in December with a degree in aviation management - and at least $91,000 in mostly private loans. McCoy has been at ASU for several years - first receiving his bachelor's degree and now completing a master's degree.
He has paid out-of-state tuition the entire time.
Beginning in May, six months after graduation, McCoy will have to start paying back his loans, to the tune of $550 a month, he estimates. Because he's been working in the aviation field for the past six years for a local airline, he's hopeful about employment, even if it is an entry level job.
He's also acutely aware of the job picture for many graduates. Last year, he was president of the graduate student government for the school
Some of his fellow students who finished their degrees this past semester are settling for lower-than-expected wages, some making only the minimum.
McCoy said he's got employment now that makes ends meet because he can pick up extra hours.
"The general concern is people graduating with massive debt and not being able to pay their student loans because they're taking jobs that don't pay enough to meet loan expenses," he said. "For a lot of students, they don't have experience and they're coming out with just degrees right now. Many employers are turning away students because they don't have experience. They're looking for experience and not just education. I think a lot of students are facing unemployment, under-employment, jobs that don't require degrees."
It's an issue he saw expand during his tenure as a student government leader, and one that he speaks to other students about frequently. Because of the state's financial crisis, McCoy said he believes the discussion with state leaders may turn into one about where to get financial aid, and not necessarily from the state.
"I don't think the state is going to give us any more, given the economy. I think that's going to be an interesting struggle," McCoy said. "Students will see tuition and fees go up and they won't be able to afford school at that point. It becomes a huge burden."