House passes amended GET bill and accelerated degree legislation

The House on Thursday passed an amended version of a Senate bill that one House member called a reaffirmation of the fiscal soundness of the state’s Guaranteed Education Tuition (GET)  college savings program.

Action on the GET legislation was one of at least three House votes on higher education-related Senate bills this week, as the Legislature moves toward a Tuesday deadline for consideration of non-budget-related bills from the opposite house.  

The House-passed version of the GET bill, SSB 5749, adjusts the term lengths of some members of the GET governing committee, requires the committee to adopt “an actuarially sound and prudently predictable reserving strategy”  to meet the GET account’s long-term obligations, and further establishes a role for the state Actuary in that process.

The version passed earlier by the Senate would make more significant changes in the program by establishing a less-generous GET-payout formula for future enrollees in the program. That proposed “GET 2” program was spurred by concern earlier in the legislative session that rising tuition costs might leave the program with insufficient resources to meet future obligations to GET contract holders.

However, a recent report prepared by the state Actuary affirmed the fiscal soundness of the existing program. It noted that future program solvency might be negatively impacted by declines in the willingness of people to invest money in the proposed GET 2 program.   

GET allows families to save on future college tuition expenses. By purchasing 100 GET “units” today, a family can cover a full year of resident undergraduate tuition and state-mandated fees at the state’s highest-priced public university in the future.

Rep. Larry Seaquist, chair of the House Higher Education Committee, said passage of the House version of the bill was essentially a confirmation that the GET program “is a good investment for our citizens, and when they buy GET credits they are going to be able to send their kids to college.”  The House passed the measure on a 90-2 vote with five excused.

The Senate will now have to decide if it concurs with the amendments passed in the House.

Another Senate bill that was amended and passed in the House Thursday would require the Caseload Forecast Council to provide a forecast of the number of students eligible for the College Bound Scholarship program, and the number expected to attend a higher education institution. 

The forecast will help in future budget preparation.  The College Bound Scholarship program guarantees tuition and fees not covered by other state financial aid programs to low-income students who sign up for the program in the 7^th or 8^th grade, enroll in a postsecondary program and meet other requirements. The first College Bound students will start graduating from high school in 2012.

The version of SB 5304 passed by the Senate also would require a caseload forecast for the State Need Grant program.    

On Wednesday, the House passed SSB 5442, which permits the state’s public baccalaureate institutions to develop accelerated baccalaureate degree programs that allow academically qualified students to obtain baccalaureate degrees in three years without attending summer classes or enrolling in more than a full-time class load. 

The legislation states that the three-year path is not intended to set a new standard for all students, and it would not diminish the quality or value of a standard baccalaureate degree.  However, it is intended to accommodate students eager to complete a degree in the shortest time possible in order to enter the job market, and to improve graduation rates.

The bill requires institutions to submit accelerated degree programs to the HECB for approval. 

Senate bill would grant tuition flexibility linked to stronger accountability requirements

A new bill that would give public four-year institutions six years of expanded tuition-setting authority for resident undergraduate students was heard in the Senate Ways & Means Committee on Wednesday.

SB 5915 also would require the HECB to collaborate with institutions and other higher education entities to create a baccalaureate degree incentive program to award institutions that make progress on various performance measures, such as bachelor’s degree production. Actual awards would depend on funds being available for that purpose.

The expanded tuition authority in SB 5915 would be linked to a requirement that the institutions enter into negotiated performance contracts with the HECB and the Office of Financial Management. Those contracts would specify performance outcomes in a number of areas, including degree completion, low-income student retention and completion, resident student degree completion and expected degree production in high demand and critical state need areas.

Failure to complete a contract or to achieve the outcomes established in the contracts would prevent an institution from raising tuition in the next biennium above specified levels without legislative approval.

In addition, institutions that chose to raise tuition above those specified levels (11 percent per year at the UW, WSU and WWU, and 9 percent per year at CWU, EWU and The Evergreen State College) would be required to mitigate the impact on students with annual incomes below 125 percent of median family income. Currently, that is $94,000 per year for a family of four.

Students who meet the income requirement could receive several forms of financial aid from the institutions, including set-aside tuition revenue, tuition waivers, or money provided through institutional financial aid programs.

At the public hearing, SB 5915 was generally supported by the state’s four-year institutions and by Washington business representatives who participated in a Higher Education Funding Task Force convened last year by Gov. Chris Gregoire. Among other things, the task force recommended giving institutions greater tuition-setting authority as a way to preserve educational quality in a time of significant cuts to state higher education funding. 

Because of the difficult budget challenges colleges and universities are facing, several business and institutional representatives urged the committee Wednesday to grant increased tuition flexibility starting in 2011, rather than waiting until 2013 as called for in the bill.

“At the UW, we need to do this now,” UW representative Margaret Shephard told the committee.  “Two years from now, we could look like a very different institution.”

Don Bennett, HECB executive director, also spoke in favor of the bill.  Providing more flexible tuition-setting authority during the six-year period from 2013 through 2019 is critical to enabling the institutions to weather the current funding crisis, he said. Bennett also noted the bill has a strong focus on accountability and gives the HECB an appropriate role in monitoring results.

Another provision in the bill, whose prime sponsor is Sen. Derek Kilmer of Gig Harbor, would allow four-year institutions to charge differential tuition rates for students participating in specific programs, campuses or courses. The State Board for Community and Technical Colleges would be authorized to pilot or institute differential tuition models at community and technical colleges.

Public four-year institutions also would be required to provide the HECB with data on such measures as bachelor’s degrees awarded, graduate and professional degrees awarded, graduation rates, and transfer rates. The data could be used to compare similar information gathered in other states. Having such comparable data is a goal of the National Governor’s Association’s Complete to Compete Initiative.  An article on the initiative was posted earlier in the HECB Legislative Report.

Ways & Means Committee moves budget billl to full House

The House Ways & Means Committee Wednesday night approved a proposed 2011-13 state budget of approximately $32 billion. SHB 1087 will now go to the full House for final consideration.

Prior to a vote Wednesday night on the budget bill, several amendments offered by majority Democrats were passed, while an alternative budget offered by Republicans was defeated. A more detailed review of the committee's actions was published today in the Kitsap Sun.

Senate Democrats are expected to release their version of a biennial budget next week.

House Ways & Means committee chair’s budget proposal would suspend financial aid programs

House budget writers Monday released a 2011-13 budget proposal that would raise tuition from 11 to 13 percent annually at public higher education institutions, suspend  all student financial aid programs except for State Need Grant, and cut higher education funding $482 million overall.

The House budget makes deeper cuts than those proposed by Gov. Chris Gregoire in December, before the Governor and others learned state government would be losing another $800 million in projected revenue due to the continuing effect of the recession on the state’s economy.

“It’s incumbent upon us to produce a budget that actually works, and we’ve done our best to do that,” said House Ways & Means Committee Chair Rep. Ross Hunter, who introduced the new proposal as a substitute to HB 1087. The bill is scheduled for executive action in the Ways & Means Committee on Wednesday.

The committee chair’s budget proposal would close a projected $5.05 billion revenue shortfall through the next biennium by implementing $4.4 billion in program reductions, and additional changes in the form of program transfers, privatization of liquor distribution, revenue source consolidations, and other actions.

In many cases, the proposed reductions represent a continuation of funding decisions made in December and February to address revenue shortfalls during the 2009-11 biennium. A summary of the proposed budget has been posted on the Legislative Evaluation & Program Accountability website.

Although the proposed House budget would reduce state General Fund appropriations for higher education by $482 million, about $379 million of that amount would be offset with additional tuition revenue. The budget proposes annual tuition increases of 13 percent at the UW, WSU and WWU, 11.5 percent at CWU, EWU and The Evergreen State College, and 11 percent at community and technical colleges.

 “You cannot avoid the fact that we have fundamentally changed the mix between state support and tuition, particularly in our research institutions and our other four-year institutions,” Hunter said.

Because of that, Hunter said, it will be necessary to adopt policy changes that reflect the new situation.  He said the options include proposals contained in SHB 1795 sponsored by Rep. Reuven Carlyle of Seattle and others. It would allow public baccalaureate institutions to set tuition rates for all students through the 2014-15 academic year. If a four-year institution raises tuition beyond thresholds provided in the bill, that institution would be required  to mitigate the effects on middle class students with incomes up to 125 percent of median family income.

The thresholds triggering this institutional aid requirement for low and middle income families are 11 percent for the UW, WSU and WWU, and 9 percent for CWU, EWU and The Evergreen State College.  In addition, public institutions are required to set aside 5 percent of tuition revenue for institutional financial aid, up from the current requirement to set aside 3 and one-half percent of tuition revenue for such aid.  Finally, public institutions are authorized to charge Running Start students a fee of up to 10 percent of tuition.

A more in depth discussion of SHB 1795 was posted earlier in the HECB Legislative Report.    

The House Ways & Means Committee chair’s budget proposal also would make further reductions in student financial aid programs. Although the proposal calls for adding $103 million to the State Need Grant program to mitigate the effects of tuition increases on low-income students, it would reduce awards for students at private schools to the amounts students at the regional institutions can receive, and would eliminate new awards for students at for-profit institutions.

In addition, the budget proposal would:

• Suspend the State Work Study program, which provides both state support and employer matching funds to low-income students who work in jobs related to their academic or career interests.
• Suspend new awards under the Health Professionals Conditional Scholarship Program, which provides scholarships or loan forgiveness for health professionals who agree to work in rural or underserved areas of the state.
• Suspend funding for future awards under the Washington Scholars and Washington Award for Vocational Excellence programs.
• Suspend the Educational Opportunity Grants (EOG) program. The EOG provides grants to financially needy, placebound Washington residents as an incentive to complete their first bachelor’s degree. About $5.2 million in savings would be transferred to the State Need Grant program.
• Suspend other small grant programs, including the College Assistance Migrant Program, the Community Scholarship Matching Grant program, Western Interstate Commission for Higher Education student exchange, the Foster Care Endowed Scholarship, and the Child Care matching grant.   

At a public hearing on the budget proposal Monday, Sam Shaddox, a University of Washington law student and the student member on the HECB, said continuing to provide adequate funding for Washington’s public higher education system is important because the state currently produces insufficient numbers of educated workers to meet demand.  As a result, businesses have to import educated workers from outside Washington.

Bill would establish new legislative council to advise HECB on Strategic Master Plan

Under a bill just introduced in the House, a new Higher Education Performance Advisory Council would advise the HECB on development of the state’s Strategic Master Plan for Higher Education, and would examine system changes designed to improve governance structures and increase efficiencies in educational delivery and administration.

In addition, the council, which would continue to exist under the bill until July 1, 2015, would identify and prioritize public higher education objectives that provide the greatest benefits and that require public funding. 

The HECB, which is responsible for developing a 10-year strategic master plan and updates every four years, would consider the council’s recommendations for inclusion in the plan.

HB 2049 is the most recent of a number of education governance bills introduced during the 2011 legislative session. Other proposals call for eliminating or merging state-level education entities in various ways, or for developing further recommendations on education governance.  

The prime sponsor of HB 2049 is Rep. Hans Zeiger of Puyallup.  Other sponsors include House Higher Education Committee Chair Larry Seaquist of Gig Harbor, ranking minority member Larry Haler of Richland, and committee members Reuven Carlyle of Seattle and Susan Fagan of Pullman.

The Higher Education Performance Advisory Council would consist of four members each from the House and Senate, a HECB representative, and a representative of the State Board for Community and Technical Colleges.

House Ways & Means offers changes in GET bill following Actuary's report

After a report from the state Actuary affirmed the fiscal soundness of the Guaranteed Education Tuition (GET) program, the House Ways & Means Committee last Thursday recommended passage of an amended bill that would leave intact the current basis for determining future payouts under the college savings program.

The new version of SB 5749 endorsed by Ways & Means would require GET’s governing body to adopt an “actuarially sound and prudently predictable” payout factor sufficient to cover the program’s long term obligations.  It also gives the state Actuary a defined role in that process.   

Responding to concern that escalating tuition rates at higher education institutions might someday force the state to cover some of the cost of tuition payments guaranteed under the GET program, the Senate in early March passed a different version of SB 5749. It would implement a less-generous GET-payout formula for future enrollees in the program.  

However, Thursday’s report from the state Actuary estimated a less-than 1 percent chance the existing GET program would require help from state resources to meet its financial obligations over the next 50 years.

Both the current GET program and the proposed “GET 2” alternative passed by the Senate could withstand unfavorable tuition and investment growth for many years if the program prices future GET units with a long-term tuition growth assumption of 9.5 percent, according to the report.  However, the report noted that GET’s program solvency could also be negatively impacted by declines in “consumer confidence,” or the willingness of people to invest money in a new GET program in the future. 

GET, the state’s 529 pre-paid tuition college savings program, allows families to save on their future college tuition expenses.  By purchasing 100 GET “units” today, a family can cover a full year of resident undergraduate tuition and state-mandated fees at the state’s highest-priced public university in the future. GET investments are tax free if used for qualified higher education expenses.

The GET 2 proposal supported by Senate Majority Leader Lisa Brown of Spokane would base payouts on units purchased in future GET accounts on the average increase in tuition, weighted by the number of students, at all public higher education institutions in Washington, rather than at the highest-priced institution.

In earlier testimony, Brown said the GET 2 proposal would allow the state to continue providing an excellent opportunity for Washington families to invest in higher education for their family members, but would also ensure that the program remains fiscally sound in the future.