VIII.VIII. Legislative Legislative AssignmentsAssignments

University ContractsUniversity Contracts Panel DiscussionPanel Discussion Staff ReportStaff Report Council DiscussionCouncil Discussion

Tuition, Financial Aid, and Tuition, Financial Aid, and AccessAccess

• Highest and best use of individual talent; Highest and best use of individual talent; maximize the productivity of a society maximize the productivity of a society

• Increase tax revenueIncrease tax revenue

• Minimize social costs that are correlated with Minimize social costs that are correlated with under-education (crime rates and under-education (crime rates and dependency)dependency)

• Informed and educated electorateInformed and educated electorate

• Increased entrepreneurismIncreased entrepreneurism

• Increased technological innovationIncreased technological innovation

Source: Education and the Common Good: Source: Education and the Common Good: Social Benefits of Higher Social Benefits of Higher Education in Kentucky Education in Kentucky by Amy L. Watts by Amy L. Watts

Social Benefits of Higher Social Benefits of Higher EducationEducation

Higher EducationHigher EducationFunding PoliciesFunding Policies

• Appropriations for General OperationsAppropriations for General Operations

• Tuition and Fee PoliciesTuition and Fee Policies

• State Financial Aid PoliciesState Financial Aid Policies

• Institutional Financial Aid PoliciesInstitutional Financial Aid Policies

• Federal Financial Aid PoliciesFederal Financial Aid Policies

Source: Financing in Sync: Aligning Fiscal Source: Financing in Sync: Aligning Fiscal Policy with State Objectives (Dennis Jones, Policy with State Objectives (Dennis Jones, 20032003))

Goals of Tuition and Goals of Tuition and Financial Aid PoliciesFinancial Aid Policies

TuitionTuition• AffordabilityAffordability• RevenueRevenue

– Access to courses and programsAccess to courses and programs– Efficiency and performanceEfficiency and performance– Quality and economic development missionQuality and economic development mission

• Support differential missions and costsSupport differential missions and costs

Financial AidFinancial Aid• AffordabilityAffordability• Reward performanceReward performance• Stem the “brain drain”Stem the “brain drain”

Source: Financing in Sync: Aligning Fiscal

Policy with State Objectives (Dennis

Jones, 2003)

When funding policies are not When funding policies are not aligned, the goals of higher aligned, the goals of higher education are not realized:education are not realized:

• ““Taxpayers pay more than their fair Taxpayers pay more than their fair share;share;

• Students find higher education Students find higher education becoming unaffordable and opt out; orbecoming unaffordable and opt out; or

• Institutions fail to acquire the resources Institutions fail to acquire the resources needed to adequately fulfill their needed to adequately fulfill their missions.”missions.”

Source: Financing in Sync: Aligning Fiscal Policy with Source: Financing in Sync: Aligning Fiscal Policy with State Objectives (Dennis Jones, 2003State Objectives (Dennis Jones, 2003))

National TrendsNational Trends

Tuition Philosophies of the States Tuition Philosophies of the States

Source: State Tuition, Fees, and Financial Source: State Tuition, Fees, and Financial Assistance Policies, 2002-03 (SHEEO)Assistance Policies, 2002-03 (SHEEO)

2002-032002-03 1996-971996-97

Tuition should be as low as Tuition should be as low as possiblepossible

30% 30% 28% 28%

Tuition should be moderateTuition should be moderate 13% 13% 28%28%

Tuition should be highTuition should be high 0%0% 4%4%

Tuition policy is guided at Tuition policy is guided at institutional-level or no institutional-level or no statewide policy existsstatewide policy exists

37%37% 23%23%

OtherOther 20%20% 17%17%

Primary Authority for Primary Authority for Establishing TuitionEstablishing Tuition

• LegislatureLegislature 44

• State Coordinating/ State Coordinating/ Governing AgencyGoverning Agency

1818

• System BoardsSystem Boards 1212

• Individual InstitutionsIndividual Institutions 1616

Source: State Tuition, Fees, and Financial Assistance Policies, 2002-03 (SHEEO)

The Emerging Problem of The Emerging Problem of Student DebtStudent Debt

• The amounts students will have to repay are a The amounts students will have to repay are a rising and significant proportion of potential rising and significant proportion of potential earnings. earnings.

• The current growth in borrowing has not The current growth in borrowing has not leveled off.leveled off.

• Many have accumulated debt, particularly Many have accumulated debt, particularly through credit cards, that could make repaying through credit cards, that could make repaying loans more difficult than in the past. loans more difficult than in the past.

• Widespread consumer debt is substantial so Widespread consumer debt is substantial so students are receiving less help from their students are receiving less help from their parents.parents.

Source: Student Loan Debt: Problems & Prospects by Source: Student Loan Debt: Problems & Prospects by the Institute for Higher Education Policy, the Sallie the Institute for Higher Education Policy, the Sallie Mae Education Institute, and the Education Resources Mae Education Institute, and the Education Resources InstituteInstitute

Summary of National TrendsSummary of National Trends

• A shift of policies towards an emphasis A shift of policies towards an emphasis on institutional funding needs.on institutional funding needs.

• Increased deregulation of tuition Increased deregulation of tuition decisions by state legislatures.decisions by state legislatures.

• Student debt as a share of potential Student debt as a share of potential income continues to grow.income continues to grow.

Florida Tuition and FeesFlorida Tuition and Fees

$ per FTE of Research I Universities $ per FTE of Research I Universities

Florida vs. Top Funded SREB States Florida vs. Top Funded SREB States

Source: SREB 2000-2001 Funding Source: SREB 2000-2001 Funding ReportReport

0

5,000

10,000

15,000

20,000

25,000

Maryland Kentucky Delaware NorthCarolina

Georgia SREBAverage

Florida Floridawith

SREBAvg Fees

Floridawith

SREBTop

QuartileFees

State Support Tuition & Fee Revenue

Average Tuition, Fees, and Financial Aid per Average Tuition, Fees, and Financial Aid per FTE of 10 Large States and U.S.FTE of 10 Large States and U.S.

Sources: NCES Digest of Education Statistics 2001 and NASSGAP Annual Survey of Sources: NCES Digest of Education Statistics 2001 and NASSGAP Annual Survey of State Grant Programs 2000-01State Grant Programs 2000-01

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

P

ennsy

lvania

N

ew J

erse

y

O

hio

M

ichi

gan

Il

linois

N

ew Y

ork

T

exas

G

eorg

ia

C

alifo

rnia

F

lorid

a

United S

tate

s

State Need-Based Aid

State Non-Need Aid

Fees Paid by Student

Florida Florida Student Financial AidStudent Financial Aid

FLORIDA UNIVERSITY SYSTEMFLORIDA UNIVERSITY SYSTEM

Grants vs. loansGrants vs. loans

-

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1997-98 1998-99 1999-00 2000-01 2001-02

LOAN AID GRANT AID

Source: Trends in Student Aid and College Pricing in Florida 1997-98 to 2001-02Source: Trends in Student Aid and College Pricing in Florida 1997-98 to 2001-02

FLORIDA FLORIDA UNIVERSITY UNIVERSITY

SYSTEMSYSTEM

NEED NEED VERSUS VERSUS

NON-NEED NON-NEED PROGRAMSPROGRAMS-

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

1997-98

1998-99

1999-00

2000-01

2001-02

NEED-BASEDAID

NON NEED-BASED AID

Source: Trends in Student Aid and College Pricing in Florida 1997-98 to 2001-02Source: Trends in Student Aid and College Pricing in Florida 1997-98 to 2001-02

Percent of Undergrads Percent of Undergrads Receiving Need-Based Aid Receiving Need-Based Aid

(2000-01)(2000-01)

10 Largest 10 Largest StatesStates

Sources: NCES Digest of Education Statistics 2001 and NASSGAP Annual Survey of State Sources: NCES Digest of Education Statistics 2001 and NASSGAP Annual Survey of State Grant Programs 2000-01Grant Programs 2000-01

0% 10% 20% 30% 40%

New York

Pennsylvania

New Jersey

Illinois

Ohio

Florida

Michigan

California

Texas

Georgia

Problems with a Low Problems with a Low Tuition/High Merit Aid StrategyTuition/High Merit Aid Strategy

• Benefits students who would have gone to Benefits students who would have gone to college anywaycollege anyway

• Reduces the price of attendance for students Reduces the price of attendance for students who could have afforded to pay morewho could have afforded to pay more

• Shifts costs from students and parents to Shifts costs from students and parents to taxpayerstaxpayers

• Unlikely to substantially improve either Unlikely to substantially improve either participation or affordabilityparticipation or affordability

Source: Financing in Sync: Aligning Fiscal policy with State Source: Financing in Sync: Aligning Fiscal policy with State Objectives (Dennis Jones; 2003Objectives (Dennis Jones; 2003))

Florida AccessFlorida Access

Measuring Up 2002: The Measuring Up 2002: The State-by-State Report Card State-by-State Report Card

for Higher Educationfor Higher Education

Florida Affordability Florida Affordability Grade: Grade: D-D-

at community collegesat community colleges

Percent of income needed to pay Percent of income needed to pay for college expenses minus financial for college expenses minus financial aid: aid: (average of all income groups)(average of all income groups)

FloridaFlorida ““A” A” StatesStates

• at community collegesat community colleges 23%23% 16%16%

• at public 4-year at public 4-year colleges/universitiescolleges/universities

23%23% 18%18%

• at private 4-year at private 4-year colleges/universitiescolleges/universities

62%62% 32%32%

Family Ability to PayFamily Ability to Pay

STRATEGIES FOR STRATEGIES FOR AFFORDABILITYAFFORDABILITY

FloridaFlorida ““A” StatesA” States

State grant aid targeted to low-State grant aid targeted to low-income families as a percent of income families as a percent of

federal Pell Grant aidfederal Pell Grant aid16%16% 108%108%

Share of income that poorest families Share of income that poorest families need to pay for tuition at lowest priced need to pay for tuition at lowest priced

collegescolleges13%13% 8%8%

Average loan amount that all Average loan amount that all undergraduate students borrow each undergraduate students borrow each

yearyear$3,082$3,082 $2,928$2,928

Summary of Current Florida Summary of Current Florida PoliciesPolicies

• Current policies emphasize on low Current policies emphasize on low tuition and merit aidtuition and merit aid

• These policies produce a low ranking These policies produce a low ranking among states in success at providing among states in success at providing access... access...

– Despite low tuition, Bright Futures, Despite low tuition, Bright Futures, Prepaid Tuition program, etc.Prepaid Tuition program, etc.

• Current Florida tuition levels provide Current Florida tuition levels provide the state with an untapped and the state with an untapped and uncommitted revenue opportunityuncommitted revenue opportunity

Florida Florida Institutional DifferencesInstitutional Differences

Portion of University System FTE Portion of University System FTE Enrollment Included in Contract StudyEnrollment Included in Contract Study

Included in Study

Not Included in Study

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Source: Source: SUS Fact SUS Fact Book Book 2001-022001-02

Headcount Undergraduate Headcount Undergraduate Enrollment by AgeEnrollment by Age

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UF FSU USF UCF FIU SUS

17 to 20 21-24 25-33 34-44 45 and Older

Source: SUS Fact Book 2001-02Source: SUS Fact Book 2001-02

Percentage of Undergraduate Percentage of Undergraduate Headcount Enrollment Headcount Enrollment

That is Part TimeThat is Part Time

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

UF FSU USF UCF FIU SUS

Source: Source: SUS Fact SUS Fact

Book Book 2001-022001-02

Impact of Impact of Fee Fee

Increases Increases on on

the Cost the Cost of of

CollegeCollege

Source: UF annual student budget 2002-03 from UF Financial Aid Office website

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

4 YearCost with120 SCH

& NoAnnual

FeeIncreases

4 YearCost with120 SCH& 10%Annual

FeeIncreases

51/2 yearCost with132 SCH& No FeeIncreases

Personal/HealthInsurance

Clothing

Transportation

Computer

Meals

Housing

Books/Supplies

Tuition

Institutional DifferencesInstitutional Differences• Large variation in percent of enrollment that is Large variation in percent of enrollment that is

part time.part time.

• Large variation in percent of enrollment that is Large variation in percent of enrollment that is not traditional college age – more likely to not traditional college age – more likely to have family and other responsibilities.have family and other responsibilities.

• 76% of SUS FTE and 75% of Headcount 76% of SUS FTE and 75% of Headcount attend universities are included in the study.attend universities are included in the study.

Overall Summary of Tuition Overall Summary of Tuition and Financial Aid Policiesand Financial Aid Policies

• Current policies are inefficient in Current policies are inefficient in providing access providing access

• New policies need to balance tuition New policies need to balance tuition revenue and student costsrevenue and student costs

• Contract provisions may need to be Contract provisions may need to be different for each university different for each university

• Untapped tuition revenues provide an Untapped tuition revenues provide an opportunity for dramatic changeopportunity for dramatic change