The Financing of Higher Education EPPL 676 Week #3 Overview of Current Financial Condition

New Financial Times Decreases in State support Shift from grants to loans Increasing need for education for jobs Changing student demographics Increased student enrollments Shifting patterns for faculty base

Overview of Financial Aid System

Shift to loans Growth in volume of loans and amounts ◦ Ease of borrowing ◦ Funding lifestyle, not just tuition Rational for Loans Varies ◦ Increase underrepresented ◦ Loans better on cost/benefit—to students ◦ An easier Political sell

Shift to Loans Absence of Oversight Infighting among policy makers ◦ Erosion of consensus ◦ Shift from parents to students Incremental Shift

Changes in Enrollment NCES Digest, 2007

Thought Questions If college enrollments are on the increase, how will institutions meet demand? How can states finance public education with competing demands? Obama wants to increase college graduation rates to over 50%--almost double for some states. Ideas for how this will happen?

Increases in Enrollment Fall 2000-Fall 2005 NCES Digest, 2007

Thought Questions How do the trends in enrollment patterns differ by states? Why do you think there is the huge increase in some states? If you are a college leader in a high increase state—how might you prepare?

COLLEGE ENROLLMENT RATES: Actual and trend rates of high school completers who were enrolled in college the October immediately following high school completion, by race/ethnicity: 1972–2006

Education Desegregation Prop 209—California (1996) ◦ Prohibit consideration of race, sex, ethnicity Proposal 2—Michigan (2006) ◦ No preferential treatment Texas 10% Plan ◦ College acceptance for top 10% of class

Thought Questions Enrollment rates for students of color are below whites. How might colleges address this pattern in light of removal of affirmative action plans? What links to K-12 can occur to help in recruiting students of color? CCs enroll the highest percentages of students of color—links to them?

Sources of total revenue of public degree-granting institutions: 2004–05 NCES Digest, 2007

Sources of total revenue of private not- for-profit degree-granting institutions: 2004–05 NCES Digest, 2007

Shifts in enrollment by income Table 1. Percentage distribution of full-time, full-year dependent undergraduates according to type of institution, by family income: 1989–90 and 1999–2000 Family income Public Private 2-year4-yearnot-for-profitfor-profit 4-yearless-than-4-year 1989–90 Total Lowest quarter Lower middle quarter Upper middle quarter Highest quarter –2000 Total19.4* * Lowest quarter24.7* *5.0* Lower middle quarter * Upper middle quarter * Highest quarter *Represents statistically significant change from 1989–90. NOTE: Detail may not sum to totals because of rounding. SOURCE: U.S. Department of Education, NCES, 1989–90 and 1999–2000 National Postsecondary Student Aid Studies (NPSAS:90 and NPSAS:2000).

Thought Questions What trends do you notice in the ten year span for the data? How do these trends differ by institutional type? What do these trends indicate for planning?

Patterns of Finance--Johnstone Total Resources ◦ Shifts in last 10 years? ◦ Vision of higher education? Productivity ◦ Measure learning? ◦ Faculty productivity? Sharing of burden of costs ◦ Parents/students ◦ State/public

Radical Changes Tuition Aid Revenues Learning Technology

Future Questions Paradigm Shift Partnerships Value of degrees Mission creep Profitability Giving