When the state is forced to cut higher education funding it often allows institutions to raise tuition sharply to make up for part of the cut. Sharp tuition increases create a need for higher financial aid appropriations – to mitigate the effect of the tuition increases for the state’s neediest students.
The HECB estimates another $120 million will be needed in the next biennium to provide State Need Grants to all eligible Washington students who want them, Don Bennett, HECB Executive Director, recently told the Senate Higher Education & Workforce Development Committee.
Under current eligibility rules, a family of four with one student in college can have an annual income of no more than $54,000.
The Governor’s proposed 2011-13 state budget includes $91.6 million to offset the impact of proposed tuition increases on students who receive State Need Grants (SNG). However, that additional allocation wouldn’t help eligible students who don’t receive any grant money. Last year, nearly 22,000 eligible students were not served by the SNG program because demand for the first-come, first-served grants exceeded available dollars.
Given the state’s fiscal crisis, many SNG-eligible students may face similarly grim prospects this year. With aid applications expected to rise another 22 percent, many lower-income students who would like to go to college with the help of SNG may be forced to abandon or alter their academic plans.
Bennett discussed financial aid issues with the Senate committee while explaining the HECB’s higher education budget proposal for the 2011-13 biennium. Reviewing institutional budget proposals and making recommendations on operating and capital budgets to the Governor and Legislature are among the HECB’s statutory responsibilities.
In light of the state’s ongoing fiscal problems, the Board recommended a higher education budget amounting to about 10 percent of the state General Fund, or about $3.3 billion. The HECB proposal did not specify the amount that might come from tuition increases.
The proposal would provide about the same level of appropriation that was provided for the 2009-11 biennium before the cuts of the last two years. It is important to note that the proposed budget does not make up for the cuts of this biennium. It simply would allow institutions to operate at their current funded service levels.
“We don’t try to recover lost ground, we just try to hold the line where we are, to offer the same level of services that we are at the current depressed level,” Bennett said.
In an attempt to balance many competing state needs, the Governor offered a budget proposal that includes an even lower appropriation for higher education than the “survival level” budget proposed by the HECB. The Governor recommended a little over $3 billion for higher education, including $2.7 billion from state funds and $330,000 million from tuition increases.
Higher education’s share if the state General Fund has averaged about 12 percent since 1991. As the state’s fiscal crisis has worsened, tuition has provided an increasing share of operating revenue. Under the Governor’s proposal, only about 8.3 percent of the higher education budget would come from the General Fund. “It represents a low point in terms of the state’s commitment of resources,” Bennett said.
Reductions in state funding have placed a growing burden on students and financial aid programs. In recent presentations, the HECB has tried to emphasize the interconnected relationship between the levels of state appropriations, tuition and financial aid. As state appropriations decline and tuition costs rise, the need for student financial aid grows.
There is general agreement it is very unlikely state appropriations for higher education will increase in the coming biennium. The HECB’s 10 percent of General Fund proposal simply holds the line. And, as noted, the Governor’s proposed budget would not even come up to that level.
Still, to maintain perspective about what could be accomplished if funding levels were higher, the HECB developed three alternative funding scenarios based on higher education receiving incrementally greater shares of General Fund revenues: 11, 11.5 and 12 percent.
Each of these options would enable the state to serve 18,000 more students through the State Need Grant program. The HECB’s base recommendation would serve an additional 4,400. The Governor’s proposal would not expand the number of students being served.
In addition, the HECB’s alternate funding scenarios would enable institutions to increase annual degree production by 1,000, a central goal of the Strategic Master Plan.
Bennett said past and projected future budget cuts are having an impact on the effort to achieve the state goal of significantly increasing degree production, which has been deemed essential to providing enough educated workers to meet demand in the economy.