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Affordability Strategies in the States

Affordability Strategies in the States. Moderator: Laura King (Minnesota) Presenter: Deborah Greene (Texas) Presenter: Sandra Woodley (Kentucky). Background. April 2004 Survey 9 responses (18% response rate) 8 have affordability policies

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Affordability Strategies in the States

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  1. Affordability Strategies in the States Moderator: Laura King (Minnesota) Presenter: Deborah Greene (Texas) Presenter: Sandra Woodley (Kentucky) THECB August 13, 2004 Philadelphia

  2. Background • April 2004 Survey • 9 responses (18% response rate) • 8 have affordability policies • Delaware has no statewide policy for setting tuition at its colleges • (Plus Kentucky and Minnesota) (22% response rate) THECB August 13, 2004 Philadelphia

  3. Florida • Financial aid fee for community colleges, technical centers, and universities since early 1980s that is indexed to tuition • Up to 5% for colleges and universities • Up to 10% for the technical centers • Majority of the aid provided is need based THECB August 13, 2004 Philadelphia

  4. Florida - continued • Prior to 1984, universities charged two financial aid fees • For distribution to own university students • For need-based distribution statewide • Late 1980s through early 1990s • Early 1990s • State policy targets charges to in-state undergraduates at 25% of cost of HE THECB August 13, 2004 Philadelphia

  5. Florida -continued • Florida Council of 100 recommendations • Indexing need-based aid to 19% of tuition revenues (January 2004) • Tying authority to increase tuition to performance on accountability measures related to maintaining access THECB August 13, 2004 Philadelphia

  6. Illinois • IBHE Committee to Study Affordability (1994) • High priority of making college affordable • Affordability includes institutional ability to control costs as well as student & family ability to pay • Affordability is inextricably linked to academic preparation and college academic progress THECB August 13, 2004 Philadelphia

  7. Illinois - continued • 1994 study – continued • Lack of financial resources should not be a barrier to higher education; aid should be need based and student focused • College education should be affordable & accessible to all students; students & their families should not be asked to assume a greater share of education costs than they are currently paying THECB August 13, 2004 Philadelphia

  8. Illinois - continued • “Final Report & Recommendations of the Committee on Affordability” (August 2003) • 20 recommendations • Enhancing academic preparation and progress • Assisting needy students • Keeping core costs affordable • Builds on the 1994 study • The Illinois Commitment – Goal 3 • No Illinois citizen will be denied an opportunity for a college education because of financial need. THECB August 13, 2004 Philadelphia

  9. Iowa • Intense tuition and financial aid study completed in mid-May (11 categories of tuition-related policies covered) • Tuition set-asides: 15% of gross tuition revenues continued • No less than half to undergraduates, of which no less than half is need based • Authority to use up to additional 10% for strategic enrollment goals, without restriction THECB August 13, 2004 Philadelphia

  10. Missouri • Bills introduced but not passed by the Missouri General Assembly in their recent session, which ended in May 2004 • HB 1674 (Smith)/SB 780 (Caskey) – would have frozen tuition rates from the time Missouri undergraduates enter college until they graduate THECB August 13, 2004 Philadelphia

  11. Ohio • 6% cap on in-state undergraduate instructional and general fees (FY 2004 and FY 2005) • Additional 3.9% per year permitted if revenues are used to fund scholarships for low-income students or to provide additional or improved technology services to students • OSU permitted 9% cap plus 3.9% add on • Miami University was permitted a pilot fee schedule similar to an independent university THECB August 13, 2004 Philadelphia

  12. Texas • Affordability Strategy in Closing the Gaps by 2015 (October 2000) • Providing grants & scholarships to cover tuition, fees, & books for every student with financial need • Setting tuition & fees in a manner that closes gaps in participation & success • Establishing incentives that increase affordability through academic & administrative efficiencies in the higher education system THECB August 13, 2004 Philadelphia

  13. Texas - continued • The amount of grants and scholarships must be increased. • Economically disadvantaged students should be considered a high priority for gift aid. • Colleges and universities should also monitor the cost of higher education as compared to what a family can pay based upon its effective family contribution. THECB August 13, 2004 Philadelphia

  14. Texas - continued • Tuition Deregulation (Fall 2003) • Boards of Regents given the authority to set “designated tuition” at any level to allow institutions of higher education to operate efficiently • 20% of amount above the then current cap of $46/SCH required to be set aside for financial aid • This is above the 15% required for “statutory tuition” THECB August 13, 2004 Philadelphia

  15. Utah • Regents’ policy on tuition and fees • Addresses marginal percentage increases rather than affordability • “First tier” rate increases – uniform for all institutions • “Second tier” rate increases – optional, to meet institutional needs, may be program specific • Identified factors that should be reviewed annually for “fairness and price competitiveness” THECB August 13, 2004 Philadelphia

  16. Utah - continued • Explicitly states the Board should consider requesting state appropriation increases for Utah Centennial Opportunity Program for Education when tuition is increased • Board usually requested an increase but the Legislature has not regularly appropriated increases THECB August 13, 2004 Philadelphia

  17. Virginia • Limited tuition increases through 3% cap for in-state students (1994) • Tuition freeze (1996) • 20% reduction in tuition (2000-2002) • Tuition increases (avg. 15% per year) to offset state budget cuts (2003-2004) • Tuition set-asides for financial aid (2002-2004 Biennium) THECB August 13, 2004 Philadelphia

  18. Virginia - continued • Joint Legislative Subcommittee on Higher Education Funding Guidelines approved cost-sharing policy for all in-state students (2004-2006 Biennium) • 67% general fund support • 33% tuition revenue THECB August 13, 2004 Philadelphia

  19. More Ideas • Tuition as a portion of median family or household income • E.G., VA: total charges to students (tuition, fees, room & board) = 36.6% of per capita disposable income • Inverse relationship between state appropriations for higher education and tuition rates (national Center for Public Policy and Higher Education, February 2002) THECB August 13, 2004 Philadelphia

  20. More Ideas - continued • Prepaid College Tuition Programs • College Savings Programs • Need-Based versus Merit-Based State Aid • Others? THECB August 13, 2004 Philadelphia

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