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SHEEO Professional Development Conference August 2005

Recession, Retrenchment and Recovery State Higher Education Funding & Student Financial Aid Sponsored by the Lumina Foundation for Education. SHEEO Professional Development Conference August 2005. The Problem. 5 recessions in 30 years

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SHEEO Professional Development Conference August 2005

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  1. Recession, Retrenchment and RecoveryState Higher Education Funding & Student Financial AidSponsored by the Lumina Foundation for Education SHEEO Professional Development Conference August 2005

  2. The Problem • 5 recessions in 30 years • Higher education resources stagnate or decline while enrollment increases

  3. + 11.8% + 6.2% + 8.5% 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. Educational Appropriations per FTE, U.S.,Fiscal 1980-2004, Constant 2004 Dollars Adjusted by SHEEO HECA Source: SHEEO SHEF

  4. The Complication • 2001 - Not just another recession • Serious questions about the values of our society and the strength of our commitment to educational opportunity.” David Breneman 2002

  5. The Opportunity As the economy improves, it is now time to plan for the next recession Symposium on Financing of Higher Education April 2004

  6. Project Partners • State Higher Education Executive Officers • National Association of State Student Aid Programs • Center for the Study of Education Policy – Illinois State University

  7. Project Goal To identify and disseminate successful state-level strategies and policy tools to protect students’ access to postsecondary education

  8. Project Methodology • Economic & Fiscal Analysis – higher ed appropriations, financial aid expenditures & financial access • Survey of SHEEOs & NASSGAP Members • Interviews with policy leaders in selected states

  9. Project Deliverables • Final report • Summary of analyses • Recommended strategies and policy options • State profiles • Database • Literature review and other study materials

  10. Recession • To what extent was funding restored to higher education after the four previous recessions? • Similarities and differences among states • Student financial aid trends • Financial access across recessions • Purchasing power of states’ grant programs

  11. Data Set • State Support: Grapevine • Student Financial Aid: Annual NASSGAP Reports • Enrollment: NCES • Tuition & Fees: Washington HECB GDP & GSP: BEA • Family Income: CPS • CPI: BLS

  12. Economic Cycles, Higher Ed Approps & Student Aid Preliminary Analysis

  13. Economic Cycles, Higher Ed Approps & Student Aid Preliminary Analysis

  14. Economic Cycles, Higher Ed Approps & Student Aid Recessions Preliminary Analysis

  15. Differences among states? Change in Approps & Aid Comparison of 1979-2003 Percent Changes in Total Appropriations to Percent Changes in Total State Student Aid Note: GA, LA, NC, & NV are not listed in order to make the graph more readable Illustration Only

  16. Differences among states? Change in Tuition & Aid Comparison of 1979-2003 Percent Changes in Total State Student Aid to Percent Changes in Average Four-Year Public Tuition Note: GA, LA, & NC are not listed in order to make the graph more readable Illustration Only

  17. Keeping Up with the State Economy?Higher Ed Approps - Washington Recessions Preliminary Analysis

  18. Keeping Up with the State Economy?Higher Ed Approps – New York Recessions Preliminary Analysis

  19. Investing in Students?Aid & Approps - Illinois Recessions Preliminary Analysis

  20. Balancing Tuition and Aid?Access-Cost Indicator • Balancing tuition & student aid • Policies that states influence • Public 2 and 4 Year Institutions Average Tuition & Fees – Aid per FTE Median Family Income

  21. Balancing Tuition and Aid?Midwest States Recessions Preliminary Analysis

  22. Balancing Tuition and Aid?Enrollment Growth States Enrollment Data from SHEEO SHEF 2005 Figure 4 Recessions Preliminary Analysis

  23. Balancing Tuition and Aid?High State Support States Recessions Preliminary Analysis

  24. Survey Objectives • Assess Recession Impact state higher education and student aid policies and priorities • Identify Successful Strategies to maintain financial access through future recessions.

  25. What’s important in the state? Preliminary Analysis

  26. Changed priorities for higher ed? Preliminary Analysis

  27. Where should new funds go? Preliminary Analysis

  28. What student aid program and policy changes have been made? • Changes in application deadlines • Changes in family contribution calc • Changes in income limits • Changes in length of eligibility • Access versus choice

  29. What strategies have been developed for financial access? • Partnerships with universities and K-12 in an information service to encourage access to higher education • Use of proceeds from College Savings Plansfor student loans • Increased emphasis on high school preparation

  30. Recovery • What long-term strategies have states developed to maintain financial access through economic cycles? • Preparation for economic downturns • Potential for states working together • Effect of economic factors on student aid policies and decisions

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