Tuesday, June 7, 2011

Governor signs four bills with far-reaching implications for state’s higher education system

Gov. Chris Gregoire on Monday signed legislation that could lead to a significant rebalancing of state higher education funding, alter the higher education governing structure, create new sources of student financial aid, and require a review later this year of purchase prices set under the state’s prepaid college tuition program.
In a statement after the bill signing, the Governor recalled the work of the Higher Education Funding Task Force, which she created last year to develop proposals to better fund colleges and universities at a time when state revenues were declining.  The bills signed during a ceremony in Seattle are the product of that effort, she said.
They include E2SHB 1795, the Higher Education Opportunity Act, which gives public baccalaureate institutions authority to set tuition rates for the next four academic years, and for another four years after that with some restrictions.  Institutions would be required to provide additional financial assistance to low- and middle-income students if they impose tuition hikes larger than those assumed in the state operating budget.
“Despite these tough economic times, our colleges and universities must have the resources to educate and train the next generation of engineers, scientists and workers,” the Governor’s statement said.  “Tuition flexibility will allow them to set their own tuition through 2019, so it is competitive with similar colleges and universities in other Global Challenge States.”
Tuition increases assumed in the state budget range from 11 to 16 percent.  Those assumed increases, coupled with a 24 percent reduction in state appropriations, mean that the trend in recent years toward a greater reliance on tuition to fund the state’s higher education system will continue.
On Monday, Washington State University became the first baccalaureate institution to take advantage of the new tuition flexibility. According to a university news release, the Board of Regents approved a proposal to raise tuition for resident undergraduates by 16 percent next year.
The Governor also signed E2SSB 5182, which creates a steering committee to propose duties for a new Council on Higher Education, which would replace the HECB on July 1, 2012.  The bill also establishes by July 1, 2012 a new Office of Student Financial Assistance to assume administrative duties now performed by the HECB related to state financial aid programs and the Guaranteed Education Tuition (GET) program.
Another bill signed by the Governor, ESHB 2088 (the Opportunity Scholarship Act), establishes two new public/private scholarship accounts for low- and middle-income students enrolled in high employer demand studies and other bachelor's degree programs in Washington.  A third public/private fund would support institutional proposals that increase bachelor’s degree production in high employer demand and other fields.
The Governor on Monday thanked Boeing and Microsoft, which announced they were pledging $50 million contributed over five years to the new Opportunity Scholarship program. Although the private contributions will help ease the burden of tuition increases on many students, they are not likely to come anywhere near meeting the need for financial aid among eligible low- and middle-income students.
The state budget approved by the Legislature and now awaiting action by the Governor includes an additional $107.3 million to offset expected tuition increases on the number of students already being served, but it does not include money to serve additional eligible students. Last year, approximately 22,000 eligible students did not receive State Need Grant assistance because the budgeted funds did not stretch far enough. 
Serving that many additional students in the next biennium would cost an additional $226 million, according to an HECB estimate.
The final higher education bill signed by the Governor was ESSB 5749, which concerns the state’s GET program. In light of the new tuition-setting authority granted in E2SHB 1795, the GET bill requires the program’s governing body to work with the state Actuary to assess whether changes are needed for GET units purchased on or after Sept. 1, 2011.
GET units are based on resident undergraduate tuition at the state’s most expensive public university—either the University of Washington or Washington State University.  One hundred GET units purchased today guarantees a student one year of tuition and state-mandated tuition in the future, no matter how much tuition rates have risen in the meantime.
A report during the legislative session from the state Actuary affirmed the financial soundness of the existing GET program. The additional assessment of GET unit pricing, payout value and the enrollment year schedule will help ensure the continued soundness of the program in the face of tuition changes resulting from enactment of E2SHB 1795. 

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