Financial aid cuts produce ripple effect in higher education funding

Don Bennett, HECB executive director, and Rachelle Sharpe, director of student financial assistance, told House Higher Education Committee members Thursday that cuts to financial aid programs are placing higher education beyond the financial reach of thousands of students. The cuts also represent a drain in an important potential funding source for higher education. If fewer students enroll because they can’t get financial aid, institutions lose significant tuition revenue.

Current and proposed cuts in financial aid, in combination with continuing reductions in direct state support, have stalled progress on increasing degree production, a primary goal of the state’s Strategic Master Plan for Higher Education, Bennett said.

He added it will likely take 20 years for the state to recover from the deep budget cuts to higher education dealt out over the last three years, and much longer if additional deep cuts are made in the coming biennium. He spoke at the end of two days of testimony from the state’s public two- and four-year institutions on the effect of the continuing budget cuts.

Bennett emphasized that cuts in financial aid to students have a direct impact on overall institutional funding. For example, the $25 million cut to the State Need Grant program in the 2011 supplemental budget approved in February represents, in reality, an additional cut of that magnitude in state support for the two- and four-year public colleges and universities.

The institutions will have to come up with the money to cover this year’s SNG commitments to students from their operating budgets, Bennett said. Retained tuition revenue may be used for part of this, but in some instances institutional operating reserves may be driven down to unacceptable levels and funding for other necessary programs and services marginalized.

Reducing financial aid at a time when tuition is being raised sharply puts many more students at the margins of affordability, said Rachelle Sharpe. Far too many students, faced with what they consider unacceptable levels of debt, simply opt out. This failed potential puts a drag on the effort to increase degree production.

The Governor’s proposed 2011-13 budget provides an additional $91 million for the State Need Grant program in the next biennium, Sharpe said. But this simply holds harmless from tuition increases the existing number of students now being served by SNG. It doesn’t take into account the many thousands of additional students who have enrolled in higher education during the recession and who qualify for financial aid. Meeting this additional need would require another $125 million for the State Need Grant program in the coming biennium.

More than 70,000 students are helped annually by State Need Grants, which accounts for 95 percent of all state financial aid distributed. In each of the last two academic years, the program has not been able to serve 20,000 students who are enrolled and qualify for a grant. This compares with fewer than 2,000 un-served students just three years ago.

These 70,000 students who receive State Need Grants represent nearly a quarter of all students enrolled in Washington’s public higher education institutions. Funding for the second largest need-based aid program, State Work Study, also has been cut severely and is halved in the Governor’s 2011-13 budget proposal. It is estimated nearly 7,000 students would be affected by this reduction. For many of these students, the extra money earned through SWS jobs is critical to their continued participation in higher education.

Monday marks 10th week of session

Monday marks the start of the 10^th week of the 2011 legislative session. The state revenue forecast is due on Thursday, March 17. Work on the 2011-13 budget is continuing in both houses.  The revenue forecast is expected to command a fair amount of attention relative to that budget work.

Monday, March 14, 2011

8 a.m. - House Higher Education Committee

Public hearings for several bills will be held:  SB 5463, establishing minimum standards for common student identifiers, and SSB 5664, changing the name of Lake Washington Technical College to Lake Washington Institute of Technology. 

The HECB will provide testimony in support of SSB 5484HECB to develop a biennial progress for the Spokane area Health Science Service Authority. Future reporting would be done by the HSSA’s board.

Tuesday, March 15, 2011

10 a.m. - Senate Higher Education and Workforce Development

Public hearings for four bills related to higher education will be held.

 -  SHB 1089 re; instructional materials provided in a specialized format

 -  SHB 1522 regarding academic credit for prior learning

 -  SB 5868 tuition and fees for students with excess credits or prior degrees

The HECB will provide testimony in support of HB 1586, which would grant the research university branch campuses the ability to offer doctoral degrees subject to approval by the HECB.

3:30 p.m. - House Ways and Means Committee
A work session on higher education funding will be held. Those who have been invited to present include the HECB, the State Board for Community & Technical Colleges, and the Council of Presidents. The purpose of the session is to provide additional perspective to House members on the effect of budget cuts to higher education.

Wednesday, March 16, 2011

8 a.m. - House Higher Education Committee

A public hearing will be held on SSB 5749, which closes enrollment in the current program and creates a substitute GET 2 program effective August 1, 2011. The bill would change the GET payout by applying a formula based on the average increase in resident undergraduate tuition at all higher education institutions weighted by the number of FTE resident undergraduate students. It would shorten the period of unit usage from 10 to six years, change the terms for citizen members of the GET governing board from indefinite to four years, and require other changes.

Other bills set for consideration are ESB 5764, creating Innovate Washington, which includes the Washington Clean Energy Partnership; SB 5516, allowing advance payments for equipment maintenance services; and 2SSB 5636, concerning the University Center of North Puget Sound.

HECB review would be required prior to proposed Everett center changes

Two companion bills that passed the House and Senate recently could lead to expanded higher education opportunities in the north Puget Sound area, and provide a new administrator for the region’s existing university center – but only after the HECB makes a determination about the need for the changes.

Under 2SSB 5636 and E2SHB 1792, administration of the University Center of North Puget Sound would be transferred from Everett Community College, where the center is physically located, to Washington State University.  The Senate version of the bill, which was passed by a 39 to 9 vote, has been scheduled for an 8 a.m. hearing Wednesday, March 16, in the House Higher Education Committee.

The bills, which address the long-range goal of expanded access to baccalaureate and graduate education in the North Snohomish, Island, and Skagit county region, are based on criteria identified in System Design legislation passed by the Legislature in 2010. Assigning the responsibility for developing the center to a research university such as WSU would appear to strengthen the chance of success for the initiative.

The proposed legislation would require WSU and Everett Community College to collaborate with community leaders and other institutions that offer programs at the center to serve the varied interests of students in the region.

Amendments to the bills would make the legislation contingent upon a needs assessment by the HECB, which is required under the System Design legislation. That law requires that major expansions of the higher education system first undergo an HECB review to determine if there is demonstrated student demand for the expansion.

A coordinating and planning council would be established to develop a plan for meeting the region’s higher education needs. Among other things, the plan would address employer needs for skilled workers in high demand areas, with a special emphasis on undergraduate and graduate engineering programs, including aeronautical engineering.  Rep. Hans Dunshee of Snohomish and Rep. Mike Hope of Lake Stevens, two sponsors of the House version of the bill, co-authored an op-ed piece in last Saturday’s (Everett) Herald that argued for establishing an aeronautical program in Everett.

Improving access to higher education in the north Puget Sound region is an issue with a long history.  In 1997, the Legislature established a consortium of higher education institutions to work on improving educational opportunities in the region, and in 2005 Everett Community College was given management responsibilities over the new center.

Today the center offers on-line and in-class courses from WSU, Western Washington University, Central Washington University, Eastern Washington University, The Evergreen State College, Hope International University, St. Martin’s University and University of Washington – Bothell.

CWU student suggests recent supplemental budget decision reflects a changing view of tuition

In an op-ed piece published in today’s Seattle Times, Central Washington University student Logan Bahr argues that lawmakers’ recent decision to offset General Fund reductions in the State Need Grant program with tuition revenue is, in effect, treating tuition as just another revenue stream for state government.  Because students must cover at least some tuition increases by borrowing more, “the state is indirectly closing its budget gap with student debt,” Bahr says.

House passes Education Council bill as Governor urges action on new cabinet agency

The House this week passed ESHB 1849 to create a new 23-member Washington State Education Council tasked with recommending changes in the governance structure for early learning through postsecondary education.

Meanwhile, Gov. Chris Gregoire made a fresh pitch for her proposal to absorb a number of state-level education agencies into a single Department of Education with authority over early learning through postsecondary education,

At a news conference, the Governor said she believes progress has been made in the Legislature to transform the state’s education governance system to better respond to today’s intense global competition for jobs.  Joined by legislative representatives and others, the Governor said much more work needs to be done.

HB 1973, which would implement the Governor’s education department proposal, was introduced late and so far has not had a committee hearing.  A Senate bill, SSB 5639, would implement some of the Governor’s ideas but would not include state-level higher education responsibilities under the new education department.

That substitute Senate bill was passed out of the Early Learning & K-12 Education Committee and is now in  Senate Ways & Means. Sen. Rosemary McAuliffe of Bothell, prime sponsor of the bill and chair of the Early Learning & K-12 Education Committee, said the measure is necessary to implement the budget and therefore not subject to Monday’s deadline for moving bills out of their houses of origin.  

Thus far, the education governance bill that has moved the farthest in the Legislative process is ESHB 1849, whose prime sponsor is Rep. Kathy Haigh of Shelton. Under her original bill, the council would have been tasked with developing a transition plan to enable the state Superintendent of Public Instruction to exercise supervision over all matters of public education, including postsecondary education. The HECB raised concerns over the bill’s assumption that the end result of the council’s work should be an education system supervised the Superintendent of Public Instruction.  

Under the substitute bill passed by the House, the Superintendent’s future role would not be assumed. Instead, the education council would “develop recommendations for restructuring state entities with responsibilities for early learning, K-12 education, and postsecondary education.” The council would submit a preliminary progress report to the Governor and Legislature by January 2012, and final recommendations by the following December.

The substitute bill also addresses concerns expressed earlier about the council’s composition. Among other things, the Superintendent of Public Instruction would no longer serve as the permanent chair of the council; instead, the Superintendent would perform that role until the council could select its own chair and vice chair.

The bill approved by the House also requires the council to identify any state programs or initiatives that do not contribute to making the public education system more student focused and able to provide seamless service delivery. Another amendment requires the council to identify state policies or data collection that would improve education system accountability. 

House passes bill endorsing online university operation in state

The House has passed SHB 1822, which declares the Legislature’s intent to partner with the online Western Governor’s University (WGU) as a competency-based degree-granting institution in Washington, and to recognize WGU as a Washington institution that is self-supporting and does not receive state funding.

On Tuesday, the bill was referred to the Senate Higher Education & Workforce Development Committee. A companion measure, SSB 5136, is in the Senate Rules Committee.

The substitute House bill gives the HECB the option to recognize and endorse online, competency-based education as an important component of the state’s higher education system. The HECB would be authorized to eliminate unnecessary barriers to allowing WGU to deliver its programs in Washington.

WGU is an online, private institution created in the mid-1990s by 19 U.S. governors, including former Washington Gov. Mike Lowry.

The House bill’s prime sponsor, Rep. Phyllis Gutierrez Kenney of Seattle, told her colleagues last Saturday the bill’s purpose is to help meet the demand for educated workers by providing additional access to postsecondary education, especially for place bound workers and others who find it difficult to access traditional higher education institutions.

“WGU is not a substitute for what we have now, but rather would add another access for quality education in our state,” Gutierrez said.

One of the bill’s critics Saturday was Rep. Chris Reykdal of Tumwater. He pointed out that the term “competency-based” was not defined in the bill, and that WGU-Washington would be the only private baccalaureate institution recognized in statute. He called that “very unusual.”

In earlier public hearings on the bill, some concern was expressed about whether WGU-Washington students would receive financial aid. The concern stems partly from the fact that 22,000 State Need Grant-eligible students are not receiving the grants this year because of a shortage of funds. WGU-Washington students would not be immediately eligible for financial aid. WGU-Washington would first have to become separately accredited and then would have to apply to participate in the State Need Grant program. 

The final vote on SHB 1822 was 70 in favor, 26 against, and two not voting or absent.

The bill requires the HECB to work with WGU-Washington to create data-sharing processes to assess its performance and the extent to which it helps the state achieve Strategic Master Plan Goals in higher education.

For an earlier report on SHB 1822 and SSB 5136, click here.

HECB request bills continue to advance in Legislature

Efforts continue in the Legislature on bills requested by the HECB to expand doctoral opportunities at branch campuses, to promote efficiency by eliminating certain HECB responsibilities related to local economic development entities, and to make changes in two targeted workforce scholarship programs.

HB 1586 authorizes the University of Washington and Washington State University to develop doctoral programs at their branch campuses, subject to HECB approval of specific degree programs. Currently, branch campuses are authorized to provide only baccalaureate and master’s programs. The bill, currently in House Rules Committee, was advanced one step closer to the House floor Feb. 25, when it was moved to the second step most bills go through while in Rules—moving from the Rules “review” list to the “consideration” list of bills.

A companion measure, SB 5315, was advanced to the Senate Rules Committee earlier in February. A more detailed look at these bills was posted previously in the Legislative Report.

HB 1424 and a companion measure SB 5483, would make certain changes in the Health Professional Loan Repayment and Scholarship Program and in the Future Teachers Conditional Scholarship and Loan Repayment Program. The programs encourage teaching and health professionals to work in parts of the state where workforce shortages exist in those fields. Scholarship recipients who fail to complete service commitments they made in exchange for the scholarships are required to make repayments to the state.

The legislation is intended to create more consistent repayment requirements between the two workforce scholarship programs, and to improve administration and operational aspects of the programs.

HB 1424 passed the House on a 94-0 vote on Feb. 14, and is now before the Senate Higher Education & Workforce Development Committee.  SB 5483 is in the Senate Rules Committee.

Two other companion bills, HB 1425 and SB 5484, concern HECB responsibilities under the Health Sciences and Services Authority (HSSA) program. Legislation passed in 2007 authorized creation of HSSAs to promote bioscience-based economic development and to advance new therapies and procedures for fighting disease and promoting public health.  One HSSA has been established in Spokane.

Current law authorizes the HECB to approve or reject applications for designation as an authority, to adopt implementation rules, to develop evaluation and performance measures that gauge the effectiveness of the publicly-funded authorities, and to report to the Legislature on the program. The HECB subsequently hired an outside consultant to evaluate the Spokane program because it lacked staff with expertise in that subject area.

Under the new legislation, the HECB would no longer be required to report to the Legislature each biennium.  The elimination of the reporting requirement is expected to save $66,000 next biennium.  HECB suggests the Spokane HSSA could use established evaluation criteria to do their own measurements of program effectiveness.

HB 1425 passed the House on a 98-0 vote Friday. SB 5484 has been advanced from the Senate Rules Committee to the Senate floor calendar.