Finance & Governance of Higher Education in Louisiana

Finance & Governance of Higher Education in Louisiana

LouisianaBoard of Regents Governance Comm.

Baton RougeSeptember 29, 2011

David Longanecker,President, Western Interstate Commission for Higher Education (WICHE)

LouisianaBoard of Regents Governance Comm.

Baton RougeSeptember 29, 2011

David Longanecker,President, Western Interstate Commission for Higher Education (WICHE)

Comments on Tuition and Financial Aid Policy and Practice

Two Things To Keep In MindTwo Things To Keep In Mind

Tuition & Financial Aid Don’t Stand AlonePast Practice

Appropriations to assure institutional viability (quality)Tuition as a gap fillerFinancial Aid to assuage guilt

Reward scholarship & provide affordability

A better ideaAppropriations, Tuition, & Financial Aid (ATFA) as integrated finance policyAll contributing to quality and access

Two Things To Keep In MindTwo Things To Keep In Mind

o Finance policy is a means to the end

people ultimately make the difference

Faculty in the classroomStaff outside the classroomAnd students doing their share

Good Policy Regarding TuitionGood Policy Regarding Tuition

A Simple StoryGood Policy – Affordable tuition/Not low tuition

The Demand SideA reasonable price for the value receivedAffordable to the majority of students

The Supply SideProvides adequate resourcesDoesn’t incentivize price gaugingDoesn’t leave money on the table

Good Policy Regarding TuitionGood Policy Regarding Tuition

How does Louisiana stack upThe Demand Side

Good Policy:Reasonably priced for value receivedLouisiana: Underpriced for value receivedGood Policy: Affordable to the majority of studentsLouisiana: More than affordable to majority; out of sync on financial aid – not affordable to many

Good Policy Regarding TuitionGood Policy Regarding Tuition

How does Louisiana stack upThe Supply Side

Good Policy: Provides adequate resourcesLouisiana: System under resourced to provide maximum quality; particularly access institutionsDoesn’t incentivize price gaugingLouisiana: Incentive for some institutions to gauge if possible;

So legislature maintains control of the price

Doesn’t leave money on the tableLouisiana: leaves tuition tax credit dollars unclaimed (unclaimable)

Bottom Line: Not a pretty story

Good Policy Regarding Financial AidGood Policy Regarding Financial Aid

It depends

Good Policy Regarding Financial AidGood Policy Regarding Financial Aid

It depends—What Are Your GoalsBroad accessReward ScholarshipEnhance the Louisiana Workforce

All legitimate public purposesThe Challenge for Louisiana

Finding balance to best suit La. NeedsYou want it allBut can’t afford it

Finding approaches that really work well to achieve intended purpose

Financial Aid To Serve Broad AccessFinancial Aid To Serve Broad Access

The Old Fashioned Way: Low tuitionDilemma: Didn’t do the jobWhy:

Demand side: doesn’t make affordable – non-tuition costsSupply side: starves institutions of needed resources for access students

No incentive to enroll these studentsInsufficient resources if they do

Financial Aid To Serve Broad AccessFinancial Aid To Serve Broad Access

The Great Society Idea, Extending to today—Need-based Aid

The Idea: Aid will enable; opportunity will generate equalityDilemma:

Assured accessNot successIssues of sustainability and predictability

Financial Aid to Reward Scholarship – Merit AidFinancial Aid to Reward Scholarship – Merit Aid

Merit Aid -- Multiple PurposesReward exceptional performanceEnhance student success

Through high school preparationThrough college achievement

Retain the best and brightestIn Louisiana UniversitiesIn Louisiana’s workforce and society

Two General “State Policy” ApproachesStates take care of need; institutions take care of meritStates focus on merit – TOPS, HOPE, Millennium

Financial Aid to Reward Scholarship – Merit AidFinancial Aid to Reward Scholarship – Merit Aid

Two General “State Policy” Approaches

States take care of need; institutions take care of merit

Advantage: Institutions can tailor to meet missionDilemmas:

Greatly advantages better resourced institutionsBuys privilege, not accessOften seen as Robin Hood in reverse

Financial Aid to Reward Scholarship – Merit AidFinancial Aid to Reward Scholarship – Merit Aid

Two General “State Policy” Approaches

States focus on merit – TOPS, HOPE, MillenniumAdvantages

Rewards exceptional behavior, sort ofAttracts more of “the best and the brightest,” at least to attendSupports the ethic of college attendancePopular with the people

DilemmasVery costly, if indexed to tuitionEffective, but not cost-effectivePotential for price gauging (Georgia) or price fixing (Louisiana)Skips over the most needy

Financial Aid to Enhance Louisiana’s WorkforceFinancial Aid to Enhance Louisiana’s Workforce

Two General “State Policy” Approaches

Loan Forgiveness: A Common Sense ApproachOnly problems:

Doesn’t workCostly to administerOnly affects those who borrow – Is that the message to send?

Work studyIntegrated work & learning enhances successThe real winner – cooperative work study

Contemporary Thinking on State Financial Aid – (According to Me)

Contemporary Thinking on State Financial Aid – (According to Me)

Blend the Best of Broad Access, Merit, and Workforce ProgramsTo What End

AffordabilityTo Students & To The State

Promoting Student Access & SuccessSending the right incentives

To StudentsTo Institutions

LeadersFaculty & Others

Contemporary Thinking on State Financial Aid – (According to Me)

Contemporary Thinking on State Financial Aid – (According to Me)

Exemplar Blended Programs(From which to learn; not to emulate)

Oklahoma Promise – Combination of Need and Merit

Eighth, Ninth, Tenth GradersTuition FreeIncome threshold $50,000 High school accomplishment – focus on courses, OK grades, and staying out of trouble

Contemporary Thinking on State Financial Aid – (According to Me)

Contemporary Thinking on State Financial Aid – (According to Me)

Exemplar Blended Programs(From which to learn; not to emulate)

Oregon/Minnesota: Shared ResponsibilityExplicit Partners:

Students as the principal beneficiariesParents meeting family responsibilitiesPrivate philanthropy – to reward studentsThe Federal Government – taking full advantageState Government – to fill the “reasonable” gapInstitutions – to fill any “unreasonable” gap

Shared responsibility partnersShared responsibility partners

Oregon share - filling the gap

State

State

State

Federal share - includes Pell & tax credit/deduction

Federal

Federal

Federal

Parents share - determined using federal methodology

Parents

Parents

Parents

Student share as principal beneficiary - 50% - from work, savings, scholarships, and/or borrowing

Student

Student

Student

Public 2-yr

Higher PriceUniv

Medium Price Public

4-yr

Some ideas for LouisianaSome ideas for Louisiana

Prioritize your goalsYou want it allYou can’t afford it allDecide what you need the mostBuild off the Rozeman principles

Get braveChange comes hardSpeak truth to powerBut don’t be foolish – remember Louisiana’s culture and traditions

Some ideas for LouisianaSome ideas for Louisiana

Build a philosophical basis around your goals

Borrow from others where it makes senseBut choose a viable path for Louisiana; not someplace else

Make sure financial aid is in sync with tuition policy and appropriations; but not tied to themDon’t leave all those federal dollars on the table

Some ideas for LouisianaSome ideas for Louisiana

• Think of today and tomorrow• Is there a targeted rationing plan, if the plan is

too ambitious• Will this plan provide a vision to work toward

for the future• Don’t set precedents today that will prevent

moving toward the vision of the future• Focus on the students, not the institutions• Do no harm, at least no more than you do

today