By LYNDSEY LEWIS

In the past, Idaho lagged behind other states in terms of the need-based financial aid it provided for college students, ranking third from the bottom nationally. But the governor who was elected in November 2006, C.L. (Butch) Otter, has taken steps to change that situation.

In January, soon after taking office, Governor Otter, a Republican, proposed using state funds to set up a $38-million endowment for need-based scholarships. The Legislature eventually approved a scaled-back version of his proposal, with a $12-million endowment, to provide low-income students with aid to attend public or private colleges in the state. The University of Idaho responded by setting up a scholarship program that will use endowment money to provide students with a total of at least $6,000 over four years.

With a strong state economy, Idaho's leaders were in a good position to set more money aside for financial aid. The budget that lawmakers approved for the 2007-8 fiscal year called for higher-education spending to increase by about $21-million, or about 8 percent, to more than $264-million.

Even so, Idaho students will still have to pay more out of pocket to attend college in 2007-8. The governing board for the state's public colleges approved tuition increases of at least 3.5 percent, with Boise State University's board calling for the biggest, 6.6 percent. In-state undergraduates there will pay $4,410 per year as a result.

The good news for students was that the number of public colleges they have to choose from promises to grow. In March the Idaho State Board of Education approved a petition presented by a community-college-advocacy campaign to create a tax district in the fast-growing southwestern part of the state, near Boise, to finance a new community college called the College of Western Idaho. Voters in the district approved the idea in May.

Meanwhile the University of Idaho is planning to open a campus in Sandpoint, in the northern part of the state, with start-up costs paid entirely with private money. In August, the State Board of Education, approved a deal in which the nonprofit Wild Rose Foundation will buy 77 acres of land from the university for $6.25-million. The foundation will then pay for buildings. Once the new campus opens, the university would pay for its upkeep. The Sandpoint City Council approved construction plans for the campus in June.