opportunitytexas™ college access, success, & the 82 nd legislature raise texas summit federal...

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OpportunityTexas™ College Access, Success, & the 82nd Legislature

RAISE Texas SummitFederal Reserve Bank of Dallas

November 2, 2011 Don Baylor, Jr. ([email protected])

Senior Policy Analyst, Economic Opportunity

mailto:[email protected]

“Balancing” the 2012-13 State Budget

Medicaid “I.O.U”: $5 billion

General Revenue

Shortfall of $23

billion

(after use of Rainy Day Fund

for 2011, plus other 2011

revenue not in January

estimate)

Cuts to 2012-13 Budget:

$7 billion

(at least $5.3 b to PreK-12)

Cuts to 2011 Budget: $1.4 billion

Nontax revenue: $125 million (net)

GR-Dedicated Balances: $4.9 billion

Federal EduJobs: $831 million

Accounting tricks: $3 billion

Revised 2012-13 estimate: $1.2 billion

The Texas State Budget for 2012-13Biennial Total: $175 billion

(6% below 2010-11; 15% below current services)

Federally funded = shown in white;

other areas are General Revenue,

GR-Dedicated, & “Other” State Funds.

Other7% Property tax

cut 8%

PreK-12, 16%

HHS 18%PreK-12

6%Highway 4%

Other federal 4%

Higher Ed-ucation

13%

Highways 8%

Prisons 3%HHS 13%

Source: Legislative Budget Board, HB 1 and HB 4, May 2011. Includes $2.3 billion delayed Foundation School

Program payment.

Public School Grants Eliminated from State Budget for 2012-13

Pre-Kindergarten Early Start ● High School Completion/ Success ● Science Lab Funding ●

Texas Reading, Math and Science Initiatives ● Tuition Credit Program (Early High School

Graduation) ● Extended Year Programs ● Teen Parenting Program ● Middle School Physical

Education and Fitness Programs ● LEP Student Success Initiative ● Disciplinary Alternative

Education Programs (Safe Schools) ● Rural School Technology ● School-Based Prevention

Services ●

School Improvement/Parental Involvement AVANCE ● Arts Education ● Science and Math

Outreach ●

One Community One Child

2011 RAISE Texas Summit 6

College Access & Completion Areas of Focus

Postsecondary

Access

& Success

College Savings &

Financial Prep

Career & Skills

Development

Financial Aid

(Grants, Loans, Work-

Study)

Developmental

Education Reform

K-16 Financial

Education & Capability


College Access & Completion Program and Policy Recommendations

Financial Aid Index state funding for need-based grant aid to student population growth Create and fund an early commitment financial aid program for economically

disadvantaged elementary and high school studentsCollege Savings

Improve outreach and marketing of the Texas Save & Match program and 529 plans

Connect financial education to a college savings product Support and promote VITA programs that connect low-income families with

college savings productsFinancial Planning & Screening

Integrate college financial preparation into the financial aid curriculum in public schools

Promote awareness and Access to planning and screening tools such as the FAFSA4Caster and Net Price Calculators

Integrate FAFSA preparation activities at public schools, colleges and VITA sitesDevelopmental Education

Improve developmental education assessment policies at community colleges Reform the design and delivery of developmental education courses to better

target student needs

8

Higher Education Partners

2011 RAISE Texas Summit


Higher Educational Attainment Drives Better Employment and…

Less

than

hig

h sc

hool

Hig

h sc

hool

Som

e co

llege

Bache

lor's

or h

ighe

r

13.0%9.0% 7.5%

4.4%

Unemployment Rate Lower for Texans with Higher Educational

Attainment - 2010

Source: CPPP Analysis, Economic Policy Institute analysis of Current Population Survey data, 2011

10

…More Income

$9.86 $12.29 $14.05 $23.40

Median Hourly Wages Higher for by

Texans with Educational At-tainment (2010)

Source: CPPP Analysis, Economic Policy Institute analysis of Current Population Survey data, 2011


11

Children are nearly three times more likely to emerge from poverty as adults if they complete college.

Without a College Degree

With a College Degree

0%10%20%30%40%50%60%70%80%90%

100%

45%

16%

23%

22%

18%

21%

9%

22%

5%19%

A College Degree Helps Poor Children Get Ahead (Children in Bottom Quartile)

Percent Adult Children with Income in Top Quintile

Percent Adult Children with Income in Fourth Quintile

Percent Adult Children with Income in Middle Quintile

Percent Adult Children with Income in Second Quintile

Source: Brookings Tabulations of PSID Data, Isaacs, Sawhill& Haskings, February 2008, Children in the Bottom Income Quartile



Financial Barriers to College AccessFamilies overestimate college costs

Uncertainty over financing college decreases a student’s likelihood of college enrollment

Grant aid funding lagging behind enrollment growth and student need

Low- and moderate-income students are less likely to be enrolled in college savings plans

FAFSA application is difficult to navigate1 in 5 Texas students do not complete the FAFSA

because they do not know how to apply1 in 5 Texas students do not apply for financial aid

because the process is too time-consuming58% of Texas students do not complete the FAFSA

because they believe they are ineligible for financial aid


Texas Grant Aid Investments Lag Behind Other States

Source: CPPP Analysis, National Center for Public Policy and Higher Education, Measuring Up 2008


2002-03 2004-05 2006-07 2008-09 2010-11 2012-13

$267 $325

$361 $430

$622106,000

Students Served $559

77,000 Students Served

TEXAS Grants Cut by 10% in 2012-13 (Nominal Dollars)

Mill

ions

($)

Source: CPPP Analysis, Texas Higher Education Coordinating Board & General Appropriations Act 2001-2011


Student Loans are Primary Source of “Financial Aid”

Loans Make Up the Majority of Financial Aid for Texas College Students

% of Students Receiving Aid

Income

<$60,000

Income >=

$60,000

% Loans

Basic Needy Student 72% 92% 8% 49% $1.979B

Needy Student Using Aid to Replace Family Contribution

28% 42% 58% 75%

$1.765B

Source: CPPP Analysis, Texas Higher Education Coordinating Board, 2009

Despite Federal & State Grants, Lower-Income Students Face Higher Unmet Need

0-100% 101-200% 201-300% 301-400% 401% +$0

$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000$9,000

$10,000

$0 $0 $0$0

4-year Institutions2-year Institutions

Income as Percent of Poverty Line

Source: CPPP Analysis of National Postsecondary Student Aid Study of 2008, NCES Powerstats.2011 RAISE Texas Summit


Source: CPPP Analysis, Texas Higher Education Coordinating Board, Report on Student Financial Aid in Texas Higher Education, FY 2009


0-200% 200% +0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Grants, 32%

Grants, 10%

Loans, 28%

Loans, 16%

EFC, 8% EFC, 74%

Unmet Need, 32%

Low-income families cover a higher percentage of college costs through financial aid, but…


Total Family Contribution

Source: CPPP Analysis of National Postsecondary Student Aid Study of 2008, NCES Powerstats.

Total Family

Contribution

Total Costs = $15,009 Total Costs = $17,708


0-200% 201% +0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

EFCEFC

Unmet Need


Total family contributions as a proportion of income are greater for low-income families compared to higher-income families

47% of annual income spent on college costs

17% of annual income spent on college costs

Source: CPPP Analysis of National Postsecondary Student Aid Study of 2008, NCES Powerstats.


2005 2006 2007 2008 2009 20100

200000

400000

600000

800000

1000000

1200000

1400000

1600000 184K12%

Enrollment at Texas Two-Year Public Institutions Grows at Twice the Rate of Four-Year Institutions

(2005-2010) Two-Year Institutions Four-Year Institutions Independent

1.2 M

1.5 M

Source: CPPP Analysis, Texas Higher Education Coordinating Board, 2011

21

Doing More With Less - 2012-13 Budget Texas Community Colleges

-5.8%

$3.56

$2.78

-21.8%

Annual

Appropriations per

Contact Hour 2010-

11 & 2012-13

Number of Contact

Hours

2010-11 & 2012-13

Instructional

Formula Funds

2010-11 & 2012-

13

-5.8% +20.4%

259M

312M$1.84M

$1.74M Source: CPPP Analysis, Texas Association of Community Colleges 82nd

Legislature Session Summary, July 20112011 RAISE Texas Summit


2012-13 Budget Financial Aid & Post-Secondary Training

-5.8%

$0

Jobs and Education for

Texans Grant Program

Skills

Development

Fund

State Financial Aid

Programs

-15% -40.1%

$48.5M

$81M$1B

$879M Source: CPPP Analysis, Texas Association of Community Colleges 82nd

Legislature Session Summary, July 2011

$15M

-100%


New Laws Strengthen Higher EducationSB 851 – Uniform deadline for financial aid applicationsHB 2910 – Establishes grant program for higher education

institutions to partner with non-profit institutions to improve degree completion rates

HB9 - Outcomes-Based Funding bases a portion of higher education funding on specific student success measures, including graduation/completion rates

HB 1244/SB1564 – Developmental Education Assessment and Curriculum Reforms

SB 162 – Developmental Education Plan for Underprepared Students


2011 Policy AccomplishmentsNew Laws Improve Texas’ financial capability and college

savings SB 290 (Watson)—expands mandatory financial literacy

into statewide K-8 curricula and assessment platformsHB 34 (Branch)—builds on current financial literacy

requirement (12th grade economics) to include:Instruction on paying for postsecondary education and

trainingInstruction on completing the FAFSACurricula to be finalized for 2013-2014 academic year


Policy Accomplishments(continued)HB 2594 (Truitt)—Payday and Auto Title Lending Reform Licensing

Bill creates Texas Financial Education Endowment to fund initiatives such as:“school and youth-based financial literacy and

capability”;“advertising, marketing, and public awareness

campaigns to improve the credit profiles and credit scores of consumers in this state”;

HB 399 (Castro)—requires universities to make available training on personal financial literacy (e.g. credit cards, loan repayment, retirement planning, budgeting, saving)

HB 3708 (Hochberg)—improves Save & Match program by eliminating college savings penalties (financial aid, public benefits)


Upcoming Work Engage New Stakeholders Monitor rulemaking for HB 3708

(Texas Save & Match) @ Texas Prepaid Higher Education Tuition Board

Participate in rulemaking for HB 2594 (Texas Financial Education Endowment) @ Texas Finance Commission

Pursue K-12 Financial Education Implementation @ Texas Education Agency (HB 34/SB 290)

CPPP to release review of Texas Financial Aid programs and policies

Perform Analysis of Local-Level Student Loan Data

Acquire and analyze local-level FAFSA completion figures

Develop College Readiness “Scorecard”


Payday and Auto Title Lending: Stop the Cycle of Debt (www.stoppaydayabuse.org)

State Revenue: Balanced Budget=Balanced Approach (www.texasforward.org)

Savings, Asset Building, & Financial Success (www.raisetexas.org)

Issues Affecting Low- and Moderate-Income Texans (www.cppp.org)

Creating Good Jobs, Increasing Income, & Promoting Savings (www.opportunitytexas.org)

Ways to Get Involved, Be Informed

http://www.stoppaydayabuse.org/

http://www.texasforward.org/

http://www.raisetexas.org/

http://www.cppp.org/

http://www.opportunitytexas.org/

Laura Rosen

OpportunityTexas Coordinator

[email protected]

www.opportunitytexas.org

www.facebook.com/OpportunityTexas

Don Baylor

Senior Policy Analyst, CPPP

[email protected]


Use of This PresentationThe Center for Public Policy Priorities encourages you to reproduce and distribute these slides,

which were developed for use in making public presentations.

If you reproduce these slides, please give appropriate credit to CPPP.

The data presented here may become outdated.

For the most recent information or to sign up for our free E-Mail Updates, visit www.cppp.org.

© CPPP

Center for Public Policy Priorities900 Lydia StreetAustin, TX 78702

P 512/320-0222 F 512/320-0227

http://www.cppp.org/

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