recession, retrenchment and recovery state higher education funding & student financial aid...
TRANSCRIPT
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Recession, Retrenchment and RecoveryState Higher Education Funding & Student Financial AidSponsored by the Lumina Foundation for Education
SHEEOProfessional Development Workshop
August 16, 2006
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$6,094
$5,721$5,702
$6,874
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Pu
bli
c F
TE
En
roll
men
t
$5,000
$5,500
$6,000
$6,500
$7,000
Ed
uca
tio
nal
Ap
pro
pri
atio
ns
per
FT
E
5M
6M
7M
8M
9M
10M = Recession
The Problem: National Trends since 1980
FTE enrollment in public institutions has grown by more than 40% since 1980.
Enrollment growth since 2001 has already outstripped that of each of the previous two decades.
+ 11.8%
+ 6.2%
+ 8.5%
Source: SHEEO SHEF
Educational Appropriations per FTE, U.S.,Fiscal 1980-2004, Constant 2004 Dollars Adjusted by SHEEO
HECA
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The Opportunity
As the economy improves, it is now time to plan for the next
recession
Symposium on Financing of Higher Education April 2004
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Project Goal
To identify and disseminate successful state-level strategies
and policy tools to protect student access to postsecondary education
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Appropriations for higher education are affected by national recessions.
Total State Appropriations and Appropriations per Full-Time Equivalent Student 1979 to 2004 in 2004 Dollars
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
Tota
l A
ppro
pri
ati
ons in m
illions
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Appro
pri
ati
ons p
er
FTE
Total State Appropriations Appropriations per FTE
Trend Appropriations per FTE Trend Total State Appropriations
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Recession and Recovery
Recession Decease in Appropriations
per FTE
Recovery
1980-82 26 states 1.6 years
1990-91 38 states 3.4 years
2001 44 states ?
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2001 Recession and Recovery
Number of States
Below 2001 approp/FTE
Recovered to 2001 Level
2001-2003 44 -
2004 45 1
2005 40 2
2006 30 12
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Changes in Access Factors 1979 = 1
Public 4-year tuition
Aid per public FTE
Approps per public FTE
Income 30% tile
0.0
0.5
1.0
1.5
2.0
2.5
3.0
79 81 83 85 87 89 91 93 95 97 99 01 03
Public 4-year tuition Aid per public FTEApprops per public FTE Income 30%tile
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Financial Access - the Balancing Act
Aid-to-tuition Ratio (higher is better)
Public Need-Based Aid per FTEWeighted Average Public Tuition
Access-Cost Indicator (lower is better)
Average Tuition & Fees – Aid per FTE30 Percentile Family Income
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Aid-to-Tuition RatioSelected States
US Average
Illinois
Minnesota
Washington
Tennesee
North Carolina0%
5%
10%
15%
20%
25%
79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
US Average I llinois MinnesotaWashington Tennesee North Carolina
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Access-Cost IndicatorSelected States
US Average
Minnesota
North Carolina
I ndiana
Mass
0
5
10
15
20
79 81 83 85 87 89 91 93 95 97 99 01 03
US Average Minnesota North Carolina
Indiana Massachusetts
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NASSGAP/SHEEO Survey
What impact has the recession of 2001 had on state higher education and student aid policies and priorities?
What strategies have states used to maintain financial access?
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Which Higher Education Issues Have Become Priorities Since FY2001?
(by Annual Appropriations Change)
0
10
20
30
40
50
60
70
80
90
100
Work
forc
e Pre
p
Seam
less
Tra
nsitio
ns
Afford
abili
ty
Enroll.
Growth
Min
ority
Opportun.
Limit
Tuition In
crea
s.
Quality
of E
d.
Per
cen
tag
e
DecreaseFlatIncrease
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Preliminary Analysis
What Are Your State’s Student Aid Priorities? (By Geographic Region)
0
10
20
30
40
50
60
70
80
Resourc
es fo
r Low-In
com
e
Helpin
g More
Stu
dents
New In
itiat
ive
Incr
easi
ng Max
Awar
d
College
Savin
gs
Coverin
g Tuiti
on Incr
ease
s
Expan
ding M
erit-
Based
Per
cen
tag
eM-HECNew EnglandSREBWICHE
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Student Access Since FY2001
0 10 20 30 40 50 60 70 80 90 100
Enrollment Shifts fromHigher to Low-Cost
Increased SelectivityReduced Less Prepared
Increased Enrollment ofLow-Income
More Going Out-of-State
Education Viewed Moreas a Personal Benefit
Institutional Aid GrownFaster than State Aid
State Aid Increases KeptPace with Costs
More Starting atCommunity College
Students Expected toPay More
Percentage
UncertainDisagreeAgree
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Selection of States
Primary Selection Criteria Access-Cost Indicator
Average Change 1979-2003 Post 2001 Recession Change
Aid-to-Tuition Ratio Average Change 1979-2003 Post 2001 Recession Change
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Selection of States Secondary Selection Measures
Region Enrollment Size Participation Rates Population Educational Attainment Community College Enrollment Least Decrease in Appropriations per FTE
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State Interviews
7 states 54 policymakers 30 questions
Successful Attributes
Arizona Kansas
Illinois Massachusetts North Carolina
TexasWashington
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Defined Goals and Coherent Plan
Develop a populist master plan Work inside and outside the
capitol Repeat planning process every
4-5 years
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Clear and Consistent Message
Define issues clearly in simple terms
Identify student need & what it will take to fund it
Articulate the future clearly Repeat the message over and
over
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Student Aid Options That Meet State Goals
Articulate goals clearly Include students at public &
private institutions Focus on need-based aid, not
merit aid Concentrate on one primary
need-based aid program
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Focus on Students
Be an advocate Hold low-income students
harmless on tuition increases Involve students in tuition
revenue spending decisions
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Commitment to Access and Affordability
Strongly held values Constitutional or legislative
provisions Strong state and campus
leaders
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Coordination
All sectors speak with a unified voice
Leadership by SHEEO and flagship president
Personalities or structure can cause this to happen
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Develop Champions
Within the legislature Across party lines Among the general
public/business community Maximize every opportunity for
collaboration
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Major Challenges Facing States
Rapid Growth in Hispanic Student
Enrollment Financial and Geographic Access Balancing Tuition and Financial Aid Competition for Scarce Resources
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Tuition Trends
Significant Increases Attempts to Deregulate Tuition Consideration of 4-Year Guarantees Tuition Set-Asides for SFA Increasing Reliance on the Tuition-
Payer than the Tax-Payer to fund higher education
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Project Partners
National Association of State Student Grant and Aid Programs
State Higher Education Executive Officers
Center for the Study of Education Policy – Illinois State University