The number of high school graduates participating in the NJSTARS college scholarship program has been reduced by almost half since the program’s peak in 2008-09, when the state began limiting access to control costs.

Enrollment in the decade-old program appears to have stabilized at the county college level, but participation is dropping at the four-year colleges. College and state officials wonder whether increased academic requirements and smaller scholarships may be keeping some recipients from continuing on to obtain a bachelor’s degree.

“The fact that it is less generous makes it less of a motivating factor to continue,” said Paul Shelly, spokesman for the New Jersey Association of State Colleges and Universities.

The number of NJSTARS recipients dropped from more than 5,700 to a projected 3,000 between 2008-09 and the 2014-15 projections. The number of county college participants is expected to drop slightly from 1,900 this year to 1,800 in 2014-15. But the number of four-year college recipients is projected to plummet from 1,844 to 1,200 next year, according to state budget projections.

State funding for the program has also declined by more than half in the past five years, from a high of $18 million in 2008-09 to just more than $8.5 million proposed for 2014-15, according to the state budget and the annual report of the Higher Education Student Assistance Authority, which administers the program. The state budget proposal says the funds are enough to cover all participants.

To a large extent, the enrollment decrease reflects changes in the scholarship’s eligibility and funding.

The New Jersey Student Tuition Assistance Reward Scholarship, or NJSTARS, began in 2004-05 as a program to help needy students and encourage top students to stay in-state for college. The program guaranteed free tuition and fees at local community colleges to the top 20 percent of students in their high school graduating class.

In its first year, 789 students accepted the scholarships, costing the state about $1.7 million.

But as the recession hit and college costs rose, many middle-class students who might not have previously considered a community college began to see the value of a free college education. In 2006, the scholarship was expanded to the public four-year colleges, giving students who transferred after completing their associate’s degree an essentially free bachelor’s degree as well.

Before getting NJSTARS money, students must apply for all other federal and state aid, with the NJSTARS program paying the balance. Low-income students are eligible for need-based Pell grants and state Tuition Aid Grants, lowering their STARS allocation. As more middle-class students participated, the funding burden shifted more directly to the NJSTARS program.

As both enrollment and costs skyrocketed, state legislators began to worry about sustaining the program. In 2008, the Legislature reduced eligibility from the top 20 percent to the top 15 percent of high school graduating seniors and reduced the scholarship at the four-year colleges. In 2010, Gov. Chris Christie’s proposed budget included phasing out the program, but instead it was revised again.

The current program covers just tuition at the 19 community colleges, worth $3,350, on average, for the 2013-14 year. Students must pay required fees averaging about $970 per year, plus books and other costs, and must maintain a 3.0 grade-point average.

NJSTARS recipients who earn an associate’s degree and graduate with a 3.25 grade-point average can get an NJSTARS II scholarship of $1,250 per semester, or $2,500 per year at any public or private four-year college in the state. There is also a family income limit of $250,000 for eligibility.

Local county college officials said enrollment dropped significantly when the eligibility criteria was changed, but it has since stabilized. Atlantic Cape Community College has averaged about 110 NJSTARS recipients each year for the past four years, down from 239 students at its peak in 2008-09. Ocean County College is holding steady at about 350 NJSTARS students, down from more than 600 students in 2008-09.

“When they changed the eligibility, we lost a lot of students who were between the 15 percent and 20 percent range.” Ocean County College NJSTARS coordinator Elaine Schardien said.

She said about 960 high school seniors in the county are eligible for the award each year, and most of the graduates continue on to a four-year school.

“People were disappointed when it changed,” she said of the reductions. “But it is still a phenomenal program. It is important that students now in high school can rely on it still being here.”

Atlantic Cape NJSTARS counselor Hal Lugernor said the scholarship is still a big factor in convincing students to attend community college first.

“It is about the only (state-funded) merit scholarship left in New Jersey,” he said. The school has seen students start at a four-year college, realize it is too expensive, then return to the county college to take advantage of the NJSTARS program, he said.

“With the cost of college, it’s still a great deal,” he said.

NJSTARS recipients at Atlantic Cape said the funds were a motivating factor in their decision to attend.

“It relieved a lot of financial struggle,” said Mary Kate Fresh, 19, of Mays Landing a 2013 Oakcrest High School graduate. She said she didn’t even apply anywhere else, and she is motivated to do well so she can also qualify for the STARS II scholarship at a four-year college.

Yessenia Agudelo, 19, of Galloway Township, said she would have loved to go to Rutgers, but her family could not afford it. She graduated ninth in her class at the Atlantic County Institute of Technology and said the NJSTARS program gives her the chance to earn an associate’s degree almost free, then transfer to the Rutgers site on the Atlantic Cape campus for her business management bachelor’s degree.

“I worked hard in high school to earn scholarships,” she said. “But other schools were still more expensive. If it weren’t for NJSTARS, I might be going to college somewhere else, but with a lot more debt.”

College and state officials said they cannot be sure why there are fewer NJSTARS II recipients at the four-year colleges. Some said the potential debt might discourage some students from continuing now that the scholarship is so much smaller. Tuition at the state’s four-year colleges this year averages about $12,600, so the $2,500 scholarship still leaves students with more than $10,000 to finance each year.

The number of NJSTARS II recipients at Richard Stockton College dropped from 202 in 2012-13 to 103 this year, even though Dean of Enrollment Management John Iacovelli said overall transfer numbers remain strong. The number of NJSTARS II recipients at Rowan University has dropped almost in half to 145, spokesman Joe Cardona said.

“It was more when the scholarships were larger,” Cardona said.

Private colleges in New Jersey are also eligible for the program, but there is no data yet on how many students might have chosen one over a state public college. College officials said high-performing transfer students are in demand, and NJSTARS students may also get recruited by private and out-of-state colleges willing to offer large transfer scholarships knowing those students are more likely to successfully graduate.

Contact Diane D’Amico:

609-272-7241

More than 30 years’ experience reporting and editing for newspapers and magazines in Illinois, Colorado, Texas and New Jersey and 1985 winner of the Texas Daily Newspaper Association’s John Murphy Award for copy editing.