Recession, Retrenchment and Recovery State Higher Education Funding & Student Financial Aid Sponsored by the Lumina Foundation for Education SHEEO Professional Development Workshop August 16, 2006

The Problem: National Trends since 1980 FTE enrollment in public institutions has grown by more than 40% since Enrollment growth since 2001 has already outstripped that of each of the previous two decades % + 6.2% + 8.5% Source: SHEEO SHEF Educational Appropriations per FTE, U.S., Fiscal , Constant 2004 Dollars Adjusted by SHEEO HECA

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

Project Goal To identify and disseminate successful state-level strategies and policy tools to protect student access to postsecondary education

Appropriations for higher education are affected by national recessions.

Recession and Recovery RecessionDecease in Appropriations per FTE Recovery states1.6 years states3.4 years states?

2001 Recession and Recovery Number of States Below 2001 approp/FTE Recovered to 2001 Level

Financial Access - the Balancing Act Aid-to-tuition Ratio (higher is better) Public Need-Based Aid per FTE Weighted Average Public Tuition Access-Cost Indicator (lower is better) Average Tuition & Fees – Aid per FTE 30 Percentile Family Income

NASSGAP/SHEEO Survey What impact has the recession of 2001 had on state higher education and student aid policies and priorities? What strategies have states used to maintain financial access?

Which Higher Education Issues Have Become Priorities Since FY2001? (by Annual Appropriations Change) Workforce Prep Seamless Transitions Affordability Enroll.Growth Minority Opportun. Limit Tuition Increas. Quality of Ed. Percentage Decrease Flat Increase

Preliminary Analysis What Are Your State’s Student Aid Priorities? (By Geographic Region) Resources for Low-Income Helping More Students New Initiative Increasing Max Award College Savings Covering Tuition Increases Expanding Merit-Based Percentage M-HEC New England SREB WICHE

Student Access Since FY Enrollment Shifts from Higher to Low-Cost Increased Selectivity Reduced Less Prepared Increased Enrollment of Low-Income More Going Out-of-State Education Viewed More as a Personal Benefit Institutional Aid Grown Faster than State Aid State Aid Increases Kept Pace with Costs More Starting at Community College Students Expected to Pay More Percentage Uncertain Disagree Agree

Selection of States Primary Selection Criteria Access-Cost Indicator Average Change Post 2001 Recession Change Aid-to-Tuition Ratio Average Change Post 2001 Recession Change

Selection of States Secondary Selection Measures Region Enrollment Size Participation Rates Population Educational Attainment Community College Enrollment Least Decrease in Appropriations per FTE

State Interviews 7 states 54 policymakers 30 questions Successful Attributes Arizona Kansas Illinois Massachusetts North Carolina Texas Washington

Defined Goals and Coherent Plan Develop a populist master plan Work inside and outside the capitol Repeat planning process every 4-5 years

Clear and Consistent Message Define issues clearly in simple terms Identify student need & what it will take to fund it Articulate the future clearly Repeat the message over and over

Student Aid Options That Meet State Goals Articulate goals clearly Include students at public & private institutions Focus on need-based aid, not merit aid Concentrate on one primary need-based aid program

Focus on Students Be an advocate Hold low-income students harmless on tuition increases Involve students in tuition revenue spending decisions

Commitment to Access and Affordability Strongly held values Constitutional or legislative provisions Strong state and campus leaders

Coordination All sectors speak with a unified voice Leadership by SHEEO and flagship president Personalities or structure can cause this to happen

Develop Champions Within the legislature Across party lines Among the general public/business community Maximize every opportunity for collaboration

Major Challenges Facing States Rapid Growth in Hispanic Student Enrollment Financial and Geographic Access Balancing Tuition and Financial Aid Competition for Scarce Resources

Tuition Trends Significant Increases Attempts to Deregulate Tuition Consideration of 4-Year Guarantees Tuition Set-Asides for SFA Increasing Reliance on the Tuition- Payer than the Tax-Payer to fund higher education

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