California Governor Jerry Brown, a Democrat, warned the University of California Board of Regents Thursday, that the university system is going to need to look to internal savings to finance improvements, The Los Angeles Times reported. Brown spoke at a meeting at which the board approved a tuition freeze (consistent with the governor's thinking), but also a request to the state for $120 million beyond what he has proposed in his state budget plan. "The big, bad state is not going to bail you out at a rate that is different from what we are doing," Brown said. And he said that the university can't rely on its reputation for "quality and greatness" to get around budget realities.
"Remember that students, unfortunately, are the default financiers of higher education in America," he said. "We are going to have reshape the way things are done.... We are going to have to get into concrete trade-offs of how do you live within your means."
Carnegie Mellon University has announced a $67 million gift from the investor David A. Tepper. The funds will be used for a quad that officials plan as an "academic hub" for the business school and other programs.
University of California students need another tuition freeze in the coming year, and a more rational approach to tuition than the past mix of freezes and large percentage increases, Janet Napolitano said Wednesday, The Los Angeles Times reported. Napolitano -- the new president of the university system -- made the proposal to the university's Board of Regents. Over the long run, she said, the university must strive to keep costs to students and families under control. "I want tuition to be as low as possible, and I want it to be as predictable as possible," she said. Napolitano said that she wanted to work "to bring clarity to, and reduce volatility in, the tuition-setting process." She also said she wanted to increase the number of transfer students from the state's community colleges.
Today the Senate is holding a hearing on student aid and college access with a focus on simplification, in advance of the upcoming reauthorization of the Higher Education Act. Focusing on streamlining federal student aid and making the various programs more flexible is a well-reasoned approach in a fiscal environment where increases in federal funding for the programs appear unlikely. Here are three recommendations policy makers can apply immediately to simplify programs and increase college access:
1. Better align financial aid applications with college admissions by using prior-prior year
Each year a student is enrolled in postsecondary education, he or she must submit a FAFSA to be considered for federal student aid (grants, loans, work-study). Under the current structure, the FAFSA becomes available Jan. 1 and requires tax information from the prior year (PY). However, most students and families haven’t even filed their taxes by then, making it difficult to complete the form in totality. This delay can cause an unfavorable chain reaction: a delay in submitting the FAFSA due to lack of tax information can result in a delayed financial aid award letter, which in some cases could lead to a reduced amount of financial aid, at least when it comes to aid that is awarded on a first-come, first-served basis.
The use of prior-prior year (PPY) income on the FAFSA would have multiple benefits for students and families. These benefits include the ability to: file the FAFSA earlier, often at the time they are applying to college; make better use of the current IRS data retrieval tool, which allows automatic population of a student’s tax return data; receive notification of a financial aid package earlier; and streamline the college-going process by applying for financial aid the same time they are applying for admissions.
This would be welcome news for students who need financial aid the most -- who also happen to be the most likely to miss current financial aid deadlines and overestimate college costs, according to a study by researchers at the University of Illinois at Chicago and an Illinois financial aid official.
The best part? The U.S. secretary of education was already given the authority to implement PPY over five years ago, so Congressional action is not needed to implement this idea.
While there are some concerns about using PPY as a proxy for current financial strength, it is important to remember that prior year information is also a proxy. The National Association of Student Financial Aid Administrators recently released a study on the impact of using PPY data and found that for most of the lowest-income students, using PPY versus PY did not greatly impact the amount of Pell that a student received.
2. Implement an early Pell notification, or “Pell Promise”
Low-income students often decide at an early age that college is too costly and therefore just “not for them.” Enrollment data underscore this pattern, with 52 percent of low-income high school graduates enrolling in postsecondary education compared to 82 percent of high-income graduates, according to the National Center for Education Statistics. Even for low-income students who do go on to college, many are self-selecting out of competitive or elite schools that would have been less expensive than where they ultimately attend. (This issue of "undermatching" has recently attracted significant attention from President Obama, as well as the first lady.)
One recent study of a sample of high school valedictorians found that only 50 percent of those from low-income backgrounds even applied to a selective university, compared to roughly 80 percent of the valedictorians from upper-middle and high-income families. Unfortunately, when a student decides early on that higher education is not an option, it impacts their high school coursework choices and college enrollment behaviors.
A “Pell Promise” -- a commitment of funds from the federal government as early as the ninth grade -- would make low-income students aware of their Pell grant eligibility in much the same way that the Social Security Administration disseminates information to citizens about the amount of social security they can expect in retirement.
While not technically a promised income, Social Security statements allow individuals to plan for an eventual retirement. A Pell promise would assure low-income students that a specific amount of funds would be available to them upon successful completion of high school and incentivize early college-going behaviors and patterns. Early studies from similar state-based programs, such as the 21st Century Scholars Program in Indiana, have shown that when students and parents know there are funds available to them for higher education, there are noticeable increases in college preparatory coursework and college going rates.
Identifying low-income students early would not be difficult given IRS data and other federal and state means-tested benefit programs. This change would also be easy to implement since the Higher Education Opportunity Act (HEOA) already authorized a similar demonstration program, although funds were never appropriated to fulfill the program.
3. Provide flexibility in the Pell Grant program through a “Pell Well” of funds.
The current system of Pell Grant delivery is based on the traditional spring/fall calendar and the traditional student. A student may wish to move through their program at an accelerated pace by taking courses each summer, yet under the current Pell Grant rules, that student would run out of Pell eligibility and be forced into loans to cover academic costs or defer additional enrollment until the next year. This structure is outdated and confusing to families, particularly as nontraditional students and innovative programs with nonstandard academic calendars proliferate.
To increase flexibility and encourage students to complete at a quicker pace, lawmakers could implement a Pell Well system, whereby a student’s lifetime Pell Grant eligibility would be calculated when the student initially applies for aid. The student would then be able to draw funds from their well of Pell Grant at their own pace, not to exceed a certain amount per payment period.
This is different than how Pell eligibility is currently calculated, which is based on telling students annually how much they qualify for in Pell funds and then trying to explain future Pell eligibility as a percentage of full time enrollment. Students and parents understand dollars, not percentages, and they increasingly require predictability and flexibility. Such a change would both simplify and streamline the program, and incentivize continuous enrollment and higher retention and graduation rates.
As Congress considers various proposals through HEA hearings, and as grant makers and college access advocates continue to think of ways to reimagine student aid, we should remember that manageable and realistic changes like these could have a huge impact on college access and success.
Justin Draeger is president and CEO of the National Association of Student Financial Aid Administrators.
Submitted by Ry Rivard on November 13, 2013 - 3:00am
The University System of Georgia Board of Regents voted on Tuesday to merge Kennesaw State University and Southern Polytechnic State University. The merger, announced on Nov. 1 as a foregone conclusion by the board, is now a sure thing. The merging itself will play out over the next several years and students will not attend the new institution, which will keep the Kennesaw name, until 2015.
The Georgia system has already merged eight institutions in an effort to, among other things, save money. So far, countless hours have been spent on the mergers, and historic institutions’ names have been wiped off the map. And, so far, the 31-campus system has saved only about 0.1 percent -- an estimated $7.5 million -- of its $7.4 billion operating budget.
Harvard University recently announced an 11.3 percent return on its endowment, which was valued at $32.7 billion on June 30. That's the largest endowment in higher education. The university also recently announced a $6.5 billion fund-raising campaign -- the largest ever in higher education. But an interview released by the university Friday with its chief financial officer, Dan Shore, he focused on financial pressures on the university. He said that the university has a $34 million deficit. And while that's small in the context of the university's $4.2 billion budget, he said that "the path toward our ability to thrive in the future requires that we not wait until the deficit gets even bigger before we start to act, because then it will require us to be in a much more reactive position." He also noted uncertainty about federal support, on which Harvard relies for research.
In language that is similar to that used at many less wealthy colleges, Shore also said that Harvard can't simply add expenses. "The campaign helps, but, fundamentally, we can no longer live in a world where things continue simply to be additive," Shore said. "The next new and exciting thing that we think it’s important to do can’t simply be layered on top of all of the other things that we’ve been doing. It’s just not a sustainable model. And I think the entire higher education industry is feeling the need to move away from that way of doing business."
Howard University has ended its relationship with a consulting firm through which Robert Tarola served as chief financial officer, The Washington Postreported. The university said that Tarola left by "mutual agreement." Many deans and other faculty members have criticized Tarola, questioning his plans to put the university on better financial ground. Last month Sidney Ribeau announced he was leaving the Howard presidency.
The University of Michigan on Thursday formally announced the launch of a $4 billion fund-raising campaign -- the largest ever for a public university. Michigan has already raised $1.7 billion. The top priority for the campaign (at $1 billion) is student aid.