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Report confirms continuing economic recovery and restoration of state funding for higher education

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announced its annual release of for FY14, which provides a comprehensive review of state and local funding, tuition revenue, and enrollment trends for public higher education.

National trends and Current status of state funding for higher education

On average, state and local support per full time equivalent (FTE) student was $6,552, a slight increase from $6,215 in 2013. Net tuition collections per FTE student is at $5,777, a 2.7 percent increase from 2013. Two rather interesting findings were highlighted in the report:

  • State and local support was 57.3 percent in 2014 as a share of per-student total educational revenue available to public institutions of higher education.
  • The explosive enrollment growth at public institutions from 2008 through 2011 tapered off in 2012 and is continuing in the downward trend. In 2014 enrollment fell another 1.3 percent from 2013.

Washington State compared to U.S Average

As a reminder, the SHEEO SHEF report combines community and technical college and college/university enrollment, state appropriations and tuition revenue for purposes of this report. In it, they found that enrollment (FTE) increased by 3.5 percent from 2009 to 2014, which is close to U.S. average (3.9 percent). They also found that public higher education in Washington improved in a number of other dimensions; including:

  • 15.3 percent increase in educational appropriations per FTE since 2013, higher than the U.S. average of 5.4 percent;
  • 3.7 percent increase in net tuition revenue per FTE from total educational revenue, higher than the U.S. average of 2.7 percent; and,
  • Total educational revenue per FTE increased by 9.4 percent, which was higher than the U.S. average of 4.1 percent.

However, two years of per-student funding increases might have meant that national average was on the path to exceeding pre-recession funding levels, which was not the case. Educational appropriations per student in FY14 remained 18.9 percent below 2008 pre-recession levels.

Read the full report for more data, analysis and methodological details.

2015-17 House budget adopted after amendments

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On Thursday, the House passed its operating budget proposal () off the floor, with several amendments.

The original tuition and compensation proposals from the remain unaltered, however there some key changes compared to the original bill:

  • Funding for computer science and engineering is reduced by $3.75 million, bringing the biennial total to $4.25 million, rather than $8 million.
  • An additional $1.9 million is provided for the Family Medicine Residency Network, bringing the biennial total to $4.9 million.
  • New funding of $300,000 is provided for the UW鈥檚 Latino Health Center over the biennium.
  • New funding of $400,000 is provided for the Climate Impacts Group in the College of the Environment over the biennium.

Please see our for more information about the original House proposal.

The Senate is expected to vote on its on Monday.

 

2015-17 Senate Chair Operating Budget

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On Tuesday, Leadership in the Senate Ways & Means Committee released its operating budget proposal, which makes significant changes to the and differs significantly from听the.听 Under the Senate proposal, the UW would receive $674.39 million of Near General Fund State across the biennium.

Here are some of the key points from the Senate Budget proposal:

  • Tuition affordability program 鈥� The Senate budget reduces the operating fee portion of resident undergraduate tuition to 18 percent of the state鈥檚 average wage in FY16 and 14 percent of the state鈥檚 average wage in FY17 onward. It provides $96 million over the biennium to offset the reduction in operating fees, which we believe falls short by $1.2 million in FY16 and $2.8 million in FY17.
  • WWAMI 鈥� The Senate budget provides $1.25 million per year for continued operations of the WWAMI program.
  • O&M Funding 鈥� Like the House budget, the Senate provides $1.762 million over the biennium to cover the operation and maintenance costs of UW Bothell Discovery Hall.
  • STEM Investments 鈥� The Senate proposal 听provides $2 million per year to increase bachelor鈥檚 degrees in Science, Technology, engineering and Math fields.
  • Compensation Increase 鈥� The Senate bill rejects state-funded contracts with classified staff. Instead, the Senate Chair budget would fund wage increases at $1,000 per employee and require that the University either renegotiate contracts to match this funding level or locally fund the difference in perpetuity. The Senate budget provides funds for faculty and staff wage increases at $1,000 per employee and allows the UW to deviate from this assumption with local funds.

The Senate capital budget is expected to be released next week听.听 For more information, please see the .

 

2015-17 House Chair Operating and Capital Budgets

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Leadership in the House Appropriations Committee released their 2015-17 operating budget proposal on Friday – . The proposal provides $3.48 billion of Near General Fund听State听for higher education which is a slight increase over the total higher education appropriations in the Governor’s budget.

On the operating side, the UW would receive $595.6 million of Near General Fund State across the biennium 鈥� $95 million more than we听received in 2013-15.

Here are some of the key points from the House听operating budget proposal:

  • Tuition freeze for resident undergraduate students over the biennium.
  • $50 million in biennial funding to offset tuition freeze and fund compensation increases.
  • $8 million in FY17 to support Computer Science engineering enrollment.
  • $3 million in FY17 for additional medical residencies in Washington State.
  • $4.68 million transfer from WSU to the UW in both FY16 and FY17 to support the WWAMI program.
  • $1.7 million over the biennium to cover operation and maintenance costs for UW Bothell Discovery Hall.
  • $1 million for an ungulate predation study — $600,000 of which would pass through to another state agency.
  • No funding for Climates Impacts Group, although the Governor鈥檚 funding had provided$1 million provided for this purpose.

Overall, the UW fared well in the House operating budget compared to the Governor budget.

On the capital side, the UW would receive $41.156 million in new funding from the State Building Construction Account. This is significantly less than the Governor鈥檚 proposed budget of $86.2 million, with less funding for the CSE Expansion ($6.033 million of the $40 million requested) and no funding to support the completion of the phased renovation of Lewis Hall. It does however propose a greater amount of funding for the Burke Museum ($26 million), but is still less than the Burke鈥檚 requested $46 million.

The Senate will release its proposed operating and capital budgets in the coming weeks.听 For an analysis and summary of the operating and capital budgets, please review the听.

 

Governor Inslee’s 2015-17 Operating and Capital Budgets

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The Governor released operating and capital budgets yesterday morning. Though the UW fared well in the capital budget, we believe the operating budget, as currently proposed, presents challenges. Please note that the Governor鈥檚 budgets will be taken up by the Legislature in January; we are many months away from a final legislative compromise. As usual, we will be sending out budget briefing documents throughout legislative session to keep you updated.

For an analysis and summary of the operating and capital budgets, please review the听.

Kaplan鈥檚 New 鈥淥pen College鈥� May Not Be a Bargain for All Students

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On Monday, launched “” which is intended to help adult students earn a Bachelor of Science degree in Professional Studies by offering credit for a combination of competency-based course assessments, experiential learning, and external exams (AP, IB, CLEP, DSSTs, etc.). Open College will include free online courses and mentoring to help prospective students identify and organize prior experience that could qualify for college credit. Once students enroll and have their prior skills assessed for credit, they will pay a subscription fee of $195 per month, an assessment fee of $100 per each of the remaining 35 鈥渃ourse equivalents鈥� needed to earn a degree, and a $371-per-credit fee for a final six-credit capstone course.

According to :

鈥淎 student entering with no credits who pursued the program for 48 straight months could earn a bachelor鈥檚 degree for about $15,000. Students who earned credits based on their prior experience would end up paying less than that. Officials expect that such students would typically enroll with about 60 credits, take 24 to 30 months to complete a degree, and pay about $9,500.鈥�

Kaplan鈥檚 administration sees Open College as the newest candidate in the hunt to create a $10,000 bachelor’s degree and as a new, flexible way for adults to advance their career.听 While Open College鈥檚 structure and pricing may work well for some students, a few things should be considered before rushing to enroll in Open College.

First, students at Open College will receive little, if any, financial aid.听 Open College鈥檚 website says it will not participate in federal student aid programs; it also gives no indication that students will be eligible for state financial aid or that it will offer any form of institutional aid. Therefore, although comparisons are difficult and potentially problematic, it鈥檚 worth noting that in 2013-14, resident students at public four-year institutions paid an average of $3,120 in annual net tuition and fees (published tuition and fees less grant and aid scholarship from federal, state or institutional sources).[1] If we assume, as Kaplan did, that a student entering with no credits would take 48 months to earn a degree and that tuition and fees would not increase during those four years, then a resident student who enters a public four-year with no previous credits would pay roughly $12,480 in tuition and fees to earn a four-year degree, compared to a similar student at Open College who would pay $15,000. Of course, this total does not consider the cost of rent or room and board, which can be very expensive; but neither does Open College鈥檚 estimate, even though a student earning a degree through their program would presumably still be spending money to eat and live while earning a degree.

Second, employer doubts about the quality of an online degree may impact graduates鈥� employability. According to the released last fall, only 41 percent of hiring managers believe that online programs are of the same quality as traditional, in-person programs.

[1]

AASCU States 鈥淧ay It Forward Is Not the Solution to Addressing College Affordability鈥�

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On Thursday, the American Association of State Colleges and Universities (AASCU) released examining the potential consequences of Pay It Forward (PIF) (please see our for background information). 听The AASCU brief summarizes other, similar approaches to paying for college and analyses PIF as a potential state approach to financing public higher education. 听

The report describes the following 鈥�13 Realities of PIF College Financing Proposals鈥�:

  1. Most students could pay more, not less, for college.
  2. Considerable uncertainty would be introduced into campus budgeting and planning efforts.
  3. The majority of college costs are not covered.
  4. Students from sectors with the heaviest student debt burdens would be ineligible to participate.
  5. The class divides in public higher education, and more broadly, in American society, could intensify.
  6. Costs borne by students pursuing privately financed degrees and higher-paying careers would increase dramatically.
  7. PIF is duplicative鈥攖here are existing public and private programs that calibrate student debt to earnings.
  8. PIF鈥檚 start-up costs would be enormous.
  9. Payment collection would be costly and challenging.
  10. Campus and state leaders would have strong incentives to promote programs leading to high-paying occupations, to the possible detriment of the liberal and applied arts, humanities, and public service careers.
  11. Underlying college cost drivers would not be addressed.
  12. Support for state and institutional student financial aid could dissipate.
  13. Support for maintaining existing state investment in public higher education would erode, creating a pathway to privatization.

In addition, the authors discuss 鈥淭he Unknowns of 鈥楶ay It Forward鈥欌��:

  1. How will institutional financing gaps be addressed?
  2. How would payments be collected?
  3. Who would control PIF funds?
  4. How would PIF鈥檚 structure and revenue generation differ from campus to campus?
  5. How would PIF complement or conflict with federal higher education programs?
  6. How would transfer students be integrated into PIF?
  7. What would be the consequences for noncompleters?
  8. How would college savings change under PIF?
  9. How would PIF affect campus philanthropic campaigns?

The report鈥檚 conclusion reads, 鈥淐reating a lifelong tax and privatizing public higher education through pay it forward is not the solution to addressing college affordability.鈥� 听

I recommend that readers review .

AASCU Releases Latest State Outlook

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On Thursday, the American Association of State Colleges and Universities (AASCU) released its most .听 According to the report, state operating support for public 听four-year colleges and universities is 3.6 percent higher for FY 2015 than it was for FY 2014. Of the 49 states that have passed a budget thus far, support for higher education increased in 43 states and decreased in only 6 states. Of those 6 states that reduced funding, all were under 3 percent: Alaska, Delaware, Kentucky, Missouri, Washington (0.8 percent decrease) and West Virginia.

There was a relatively small amount of variation between states in terms of their year-to-year funding changes. For FY 2015, the spread between the state with the largest gain and that with the largest cut was only a 24 percent鈥攖his is compared to 57 percent, 25 percent and 46 percent, respectively, in FYs 2012, 2013 and 2014. The report notes that this decreased volatility likely indicates 鈥渁 continued post-recession stabilization of states鈥� budgets.鈥�

Charitable contributions to U.S. colleges and universities increased 9 percent in 2013, to $33.8 billion鈥攖he highest recorded in the history of the Council for Aid to Education (CAE) Voluntary Support of Education (VSE) survey. In addition, college and university endowments grew by an average of 11.7 percent in FY 2013, according to a January 2014 study released by the National Association of College and University Business Officers and the Commonfund Institute.听 This represents a significant improvement over the -0.3 percent return in FY 2012.

The report also describes ten highlights/trends from states鈥� 2014 legislative sessions, those being:

  1. State initiatives linking student access to economic and workforce development goals.
  2. Tuition freezes or increase caps in exchange for state reinvestment鈥攖his occurred in Washington and another example is discussed in .
  3. Performance-based funding systems that attempt to align institutional outcomes with state needs and priorities.
  4. Governor emphasis on efforts to advance state educational attainment goals.
  5. Interest in policies related to vocational and technical education, including allowing community colleges to grant certain four-year degrees (as described in ).
  6. Efforts to develop a common set of expectations for what K-12 students should know in mathematics and language arts.
  7. STEM-related initiatives, including additional funding for STEM scholarships in Washington.
  8. Financial support for the renovating and/or constructing of new campus facilities鈥攗nfortunately, Washington鈥檚 legislature did not pass a capital budget.
  9. Bills allowing individuals to carry guns on public college and university campuses鈥攁s of March 2014, seven states had passed such legislation.
  10. Legislation that extends in-state tuition or, as occurred in Washington, state financial aid to undocumented students.

Other noteworthy policy topics described in the report include:

  • Student financial aid programs鈥攕ome states broadened their programs while others limited them;
  • Online and competency-based education reciprocity agreements;
  • 鈥淧ay It Forward鈥� Funding Schemes; and
  • Consumer protection as it pertains to student recruitment, advertising and financial aid at for-profit colleges.

Four Year Degrees and Tuition Freeze

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Posted by Corrin Sullivan, Intern at the Office of Planning & Budget and Educational Policy student through the month of July 2014. My focus is on higher education access and听policy. I look forward to sharing newsworthy events听in the higher ed world with you.

Let’s start with a quick听summary of two articles from this past week in higher ed news.

The California State Assembly Committee on Higher Education approved (SB850) this past week, which launches a pilot program offering fifteen community colleges the opportunity to offer a four-year degree program as soon as January 1, 2015. The Community College Board of Governors and chancellor, in consultation with the California State University (CSU) and University of California (UC) systems, will consider a variety of colleges and select fifteen districts based on four-year degree proposals that meet a variety of criteria; most notably, degrees not available at any of California鈥檚 four-year schools and that address the state鈥檚 unmet workforce needs. Although the UC system has yet to comment on SB850, California鈥檚 Community College Chancellor, Brice Harris, commends the Assembly Committee鈥檚 approval of legislation stating that it has the potential to broaden higher educational access and offer more job training opportunities for Californians.

The North Dakota Board of Higher Education recently approved its biennium budget request, which asks for an approximate 14 percent increase in funding in exchange for freezing tuition rates among its eleven colleges and universities for the coming biennium (2015-17). Based on a new funding formula instituted in the 2013 legislative session that relies largely on credit-hour completion, the budget鈥檚 $774 base request reflects a $94 million dollar increase from the previous year鈥檚 request. The $94 million dollar increase includes a $49 million dollar request to cover operating costs associated with additional credits taken at the state鈥檚 colleges and universities. In addition to the $94 million base increase, the board has also requested $9.5 million dollars to cover sums 鈥渟tudents would have to cover without a freeze,鈥� compounded with several smaller requests to meet institutional equipment and staffing needs. The Board states that they will freeze tuition rates at all colleges and universities from 2015 through 2017 if and only if, the legislature agrees to fully fund the base budget and increase employee salaries and benefits. Noting affordability as an issue in declining student enrollment numbers, the freeze aims to decrease tuition so that rates are competitive with the state鈥檚 regional counterparts.

While the Board has frozen tuition rates at the state鈥檚 two-year schools for four of the past six years, this request to freeze tuition for all North Dakota higher education institutions is unprecedented. The budget is before Governor Jack Dalrymple, pending recommendations, prior to advancing to the state鈥檚 legislature.

Temple University鈥檚 Innovative Plan to Improve On-Time Graduation and Reduce Debt

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Temple University recently created a between students and the university to help students graduate on time and limit the amount of debt they accrue. Under the program, called 鈥淔ly in 4,鈥� if an undergraduate student fulfills a set of requirements aimed at promoting on-time completion, but is still unable to graduate within four years, the university will pay for any remaining coursework (tuition and fees).听 Additionally, in each incoming class, 500 students with financial need will receive 鈥淔ly in 4 grants鈥� of $4,000 per year to help reduce the hours they must put toward employment and increase those they can devote to studying. [1]

鈥淲hat we鈥檝e found is that students from low- and middle-income backgrounds tend to take longer to complete their degrees, in part because they spend a lot of time working,鈥� Temple President Neil D. Theobald is as saying.

Starting in Fall 2014, all incoming freshmen and all incoming transfer students who enter on track to graduate on time are eligible for the program; however, only those with demonstrated financial need are eligible for the $4,000 grants. To remain eligible for the grants and/or for Temple to pay for any remaining coursework, students must:

  • Meet with an academic advisor each semester;
  • Register for classes during priority registration;
  • Advance annually in class standing; and
  • Complete a graduation review at or prior to completing 90 credits.[2]

President Theobald made to the Temple community in his October inaugural address, the first of which was to reduce student expenses. Fly in 4 is a part of that commitment.

鈥淔or nearly 50 years, researchers have shown that college students employed more than 15 hours per week during the school year earn much lower grades than do those working fewer hours for pay,鈥� Theobald said. 鈥淚n addition, time-to-graduation has become the primary determinant of student debt.鈥�

To help fulfill its commitment and ensure students graduate on time, Temple has also invested heavily in advising (hiring 60 new full-time advisors since 2006, including 10 this year), created four-year graduation maps for every major, and trained faculty members to assist students with academic and career planning.

[1] For context, Temple鈥檚 2013-14 undergraduate tuition rates were approximately $14,100 for residents and $23,400 for non-residents (depending on program and year of study).

[2] Contrary to a number of media reports, it does not appear that students are required to commit to working 10 hours per week or less in order to be eligible for the Fly in 4 grants. Temple University鈥檚 website makes no such statement.