Alaska Senate cuts scholarships and financial aid to create 'innovation' grants

The Alaska Senate on Wednesday reduced the Alaska Performance Scholarship and eliminated a needs-based financial aid program, creating in their place "innovation" grants for public schools.

Senators approved the measure, Senate Bill 103, in a 13-7 vote, moving it to the Alaska House for consideration.

Lawmakers who supported the bill said Alaska needed to prepare its public school students for 21st century learning and the new innovation grant program would help pay for those efforts. But those in opposition said the state had to fully pay for education first and lauded the scholarship program for keeping Alaska's top performers in state, as well as helping Alaskans afford college.

"What this bill does is it makes thousands of Alaskans pay thousands of dollars more to go to school," said Sen. Bill Wielechowski, D-Anchorage, who voted against the bill. "This will deny thousands of Alaskans the ability to go to college in Alaska. Shouldn't we be doing the exact opposite?"

The Senate bill would cut away two levels of the three-level Alaska Performance Scholarship, instead of completely eliminating it, which was originally proposed in the Senate and met with public criticism.

Under the bill passed Wednesday, only high school students with at least a 3.5 grade-point average and a "very high minimum score on a college entrance examination" would be eligible for the state scholarships. Those students could receive up to $4,755 a year to attend an Alaska college, university or vocational-technical program, as they do now. The bill would eliminate scholarships for students who receive an average 3.0 grade, currently up to $3,566 a year, or 2.5 GPA, now $2,378.

Sen. Shelley Hughes, R-Palmer, voted for the bill Wednesday and said she hoped the scaled-back program would prompt Alaska students to work harder in school and achieve higher grades to receive a scholarship.


"I really see this as instead of accepting status quo, really encouraging those students who have done less than stellar work," she said during the Senate floor session.

Since the Alaska Performance Scholarship started in 2011 under Republican Gov. Sean Parnell, 8,606 students have received a total of $48.8 million, according to data from the Alaska Commission on Postsecondary Education.

Starting in the upcoming budget year, the state would pay $6.6 million a year to pay for the highest-level scholarship, according to a financial document attached to the bill. That's slightly less than in the current year, when the state distributed $7.3 million to top scholars, according to the commission.

The Senate bill would also eliminate the Alaska Education Grant, created by the Legislature to provide needs-based financial aid to eligible Alaska high school graduates pursuing an undergraduate degree or vocational certificate in state. Students have received $28.1 million in those grants since 2011, according to the commission.

Under the Senate bill, 2017 high school graduates would be the final group eligible for the scholarships and grants. The programs would phase out over the next four years, with the exception of the highest-level scholarship.

As the scholarships for individual students end, the new innovation grant for school districts would begin.

The bill would rename the "Alaska higher education investment fund" that paid for the scholarships and grants to the "Alaska education innovation grant fund."

The fund would pay for the remaining scholarship and the new school grants that, according to the bill, would support "innovative education ideas," which could include instruction delivered through technology or pilot projects that bring "new instructional approaches" into classrooms.

"It is a time for innovation. It is a time to collaborate with local school districts," said Sen. Anna MacKinnon, R-Eagle River, during the Senate floor session. "It's time to provide more for our Alaska students to increase their opportunity to compete globally in a world that is ever-changing."

The Senate Finance Committee, co-chaired by MacKinnon and Sen. Lyman Hoffman, D-Bethel, said in a sponsor statement for the bill that the goal of the legislation was to provide Alaska students with better outcomes through "innovative new educational delivery methods." The statement said the performance scholarship had not achieved "the results we had hoped for."

But Sen. Tom Begich, D-Anchorage, said the bill did not promote innovation, especially in light of the budget passed by the Senate Majority that cut public school funding by $69 million. The grants were like dangling a small amount of money in front of schools hungry for adequate funding.

"That will lead to a scramble between those who can afford good grant writers and those who can't," he said during the Senate floor session. "Those who still have some resources left crawling over those without resources."

Tim Parker, president of NEA-Alaska, said the teachers union believed grants could only work after the state Legislature passed a "comprehensive fiscal plan that funds education." He said Alaska school districts are currently grappling with balancing budgets, cutting positions and increasing class sizes.

"It's not a very decent time to talk about how we're going to innovate," he said during an interview Wednesday.

Anchorage School Board President Tam Agosti-Gisler said she had "some mixed feelings" about the bill. She said the Anchorage School District had programs that she felt could qualify for the innovation grants. However, she added, she knew the reduction of state scholarships would affect students, especially first-generation college students, she said.

"I can't help but feel, though, that we're robbing from Peter to pay Paul," Agosti-Gisler said.

The University of Alaska said in a statement that the elimination of the scholarship and grant could affect the university system's tuition revenue by as much as $8 million each year. UA's governing body, the Board of Regents, passed a resolution earlier this year opposing the elimination of both programs.


"We believe ending the program would be extremely detrimental to growing our enrollment, incentivizing young Alaskans to remain in-state for college and then joining Alaska's workforce," the statement said.

House Education Committee chair Rep. Harriet Drummond, D-Anchorage, said Wednesday that it was difficult to tell if there was enough time in the legislative session for the bill to move through the House.

Drummond said she planned to speak to MacKinnon on Thursday about the bill, and wanted to "give her the opportunity to convince me that I need to change my mind."

But on Wednesday, she said, "This bill disturbs me greatly."

Tegan Hanlon

Tegan Hanlon was a reporter for the Anchorage Daily News between 2013 and 2019. She now reports for Alaska Public Media.