There will be no state-funded scholarships for about 1,800 graduating high school seniors in New Jersey this fall.

The proposed state budget eliminates the $1.8 million in funding for new 2010 recipients of the merit-based Edward J. Bloustein Distinguished Scholar and Urban Scholars awards. Only recipients already attending college will continue to get the scholarships. 

State officials said the programs are not eliminated, just suspended for the 2010-11 school year. But that is little consolation to this year’s new recipients, who feel blindsided by the late notification that they will likely get no scholarship this year.

Ocean City High School senior E. Charles Nusbaum was thrilled when he was notified last spring he was a Bloustein Distinguished Scholar, eligible for a state scholarship of as much as $1,000 per year for four years of college. Recent Bloustein awards have averaged $930 per year and are given to students in the top 10 percent of their classes who also achieve a minimum of 1260 (of 1600) on the SAT.

“There was an awards night, and the school board honored us,” said Nusbaum, who lives on Central Avenue in Ocean City.

But last week, he and about 1,800 other seniors in high schools throughout New Jersey were notified by the state Higher Education Student Assistance Authority, or HESAA, which manages the funds, that the proposed 2010-11 budget suspends the funding for scholarship programs.

“It kind of pulled the rug out from under us,” Nusbaum said.

Other programs affected by proposed cuts, some of which are not merit-based, include the Survivor Tuition Benefits, Teaching Fellows, N.J. World Trade Center Scholarship, and Social Services and Primary Care Practitioner Loan Redemption Programs

The state had already announced cuts to the NJSTARS community college scholarship program. Under the proposed budget, NJSTARS funding will be cut from $18.7 million to $14.8 million for next year. The number of students receiving scholarships is expected to drop from 5,036 to 4,140.

But cuts to the other programs were not clear until the more detailed version of the budget was completed. The proposed state budget shows about 7,657 students receiving funds from the Bloustein, Urban Scholars, Teaching Fellows and World Trade Center scholarship programs this year, at a cost of $7.7 million. Next year the state estimates 5,857 students, a 24 percent decrease, will receive scholarships at a cost of $5.66 million, which is a 26 percent decrease.

The state will also provide $295 million in need-based aid through Tuition Aid Grants to an estimated 63,735 students, a cut of $17.5 million.

New Jersey Association of State Colleges and University’s spokesman Paul Shelly said the cuts are symbolic of the lack of state policy regarding both need-based and merit-based state financial aid.

“Programs get added and dropped depending on who is in office,” he said. “They’ve never looked at the issue comprehensively.”

The letter sent to Nusbaum said that the Bloustein award was contingent on the budget, and the recommendation is to suspend the funding. It adds that the budget is not final until July 1 and he would be notified if money is restored. It offers him best wishes and says it hopes the information is helpful as the students make their final college choice.

The Bloustein scholarship must be used in New Jersey, and students had factored that in when making their decisions on where they would attend college. Those decisions were due by May 1, and some students had already accepted admission to state colleges believing they would get the funds.

Nusbaum’s stepfather, Jeff Sutherland, said he understands the state is in financial trouble. He just wishes the students had been treated with a little more sensitivity and respect and given a little more notice.

“This is the only recognition these students get,” Sutherland said. “Why can’t the state at least have said they were sorry, but would still honor them with certificates. They say they want to keep the best and brightest students in the state. This was like a slap in the face.”

Shelly said merit scholarships send a message to talented students that the state appreciates their hard work.

“It says we want you to stay here,” he said. “Now they are just leaving it up to the individual colleges to provide the money.”

Nusbaum plans to be a math and physics teacher, and wants to graduate from college with as little debt as possible. He will attend Richard Stockton College in Galloway Township, where he has been awarded an $11,000 academic scholarship.

“He was offered scholarships at three state colleges, and like all parents, you compare and see what the options are,” Sutherland said. “There were students who lost out on the NJSTARS, but at least they were getting the Bloustein.”

On Monday night, Nusbaum and classmate Katie McClung, of Upper Township, studied for their AP Calculus exam. A good score on the exam could earn them some college credits.

McClung plans to attend Stevens Institute of Technology in New Jersey, which she chose over Drexel University in Philadelphia and Rensselaer Polytechnic Institute in Troy, N.Y., all of which offered her scholarships. She liked Stevens a lot and said the fact that she could also use the Bloustein scholarship there was a factor that helped clinch her decision to attend.

“I already sent my deposit in,” she said. “This won’t change my decision now, but it might have affected what I did if I had known earlier.”

In response to e-mailed questions, HESAA spokeswoman AnnMarie Bouse replied that the student notifications could not be issued until after the corresponding language in the proposed budget was finalized.

She wrote that the students are still considered Bloustein Scholars, even if there is no scholarship money to give them, and HESAA would encourage the schools to continue to honor the students as such.

But she did not know if the affected students would remain eligible for the funds next year, if the state’s financial situation improves, saying HESAA cannot commit the funding since it was not addressed in the budget proposal.

Contact Diane D'Amico: