SAN ANTONIO (AP) — A $614 million state grant program for needy higher education students could be threatened by the projected $18 billion Texas budget shortfall, a newspaper reported Monday.

About 24,000 first-time recipients of the TEXAS Grant program, for Toward EXcellence, Access & Success, could be shut out in the next two years, according to the San Antonio Express-News.

Gov. Rick Perry has ordered all state agencies to plan for a 10 percent cut in the next two-year spending period.

“It would be catastrophic … if we cut financial aid just as that front edge of the changing demographic hits our colleges,” said Raymund Paredes, Texas commissioner of higher education. “Those students will go home to their neighborhoods and say, ‘Higher education is not for me.’ That could have a negative impact on educational attainment in Texas for a long time to come.”

The 2009 Legislature boosted the program by $186 million over the previous biennium and exempted the grants from a 5 percent cut ordered this year.

“Nobody really has any stomach for cutting financial aid,” said Paredes.

Texas leaders in 2000 set a goal of enrolling 630,000 more students in higher education by 2015. Each year, the state falls short of its goal for enrolling Hispanic students, the fastest-growing demographic group, the newspaper reported.

“The No. 1 reason businesses locate in Texas is the quality of our work force. If we fail to grow our own college graduates, we are just going to be living in a third-world country,” said state Rep. Mike Villarreal of San Antonio.

The TEXAS Grant program has been historically underfunded, only serving a portion of eligible students. With the 2009 boost, the number served increased to about 113,000 students, including 75 percent of first-time recipients who qualify.

Paredes, to make better use of funds, has proposed a priority model that doles out money first to needy students who are also high achievers and stand a much better chance of graduating.

Mayllyn Luz, 21, of Houston is a senior at the University of Texas at San Antonio. The communications major from Houston is set to graduate early, in December, after getting nearly $20,000 in TEXAS Grants.

“I am very grateful,” said Luz.

Copyright 2010 The Associtated Press