Nancy Cooley Academic Affairs Director SHEEO Professional Development August 15, 2002 STATE COUNCIL OF HIGHER EDUCATION FOR VIRGINIA ADVANCING VIRGINA.

Nancy CooleyAcademic Affairs Director

SHEEO Professional Development August 15, 2002

STATE COUNCIL OF HIGHER EDUCATION FOR VIRGINIA ADVANCING VIRGINA THROUGH HIGHER EDUCATION

Balancing Affordability and Access:Challenges and Opportunities

in Virginia

Mounting Pressures

• Virginia’s circumstances mirror those of most other states

- Declining state general fund revenue

- Increasing tuition and fees

- Growing enrollments

Differing Perspectives

Student/Parent: How much does/will it cost to attend college? How do we plan and save for college? How do we minimize the need for debt?

Institution: What sources of revenue are available as we develop/implement our strategic plan? How do we attract and retain students? How do we provide access?

State: What is state’s role in supporting pubic higher education? What is the appropriate “share of cost?” How do we plan for future investments in higher education?

Putting the Pieces Together

State Share

Student Share

State Share

Student Share

Financial Aid

Policy Pendulum

Tuition Policies– 1990 - 1994: Tuition and fees set independently by

institutional boards. Tuition and mandatory E&G fees increased by 50%, on average, statewide in four years

– 1994 – 1996: Governor and General Assembly cap tuition increases at 3% annually.

– 1996 – 1999: State policymakers “freeze” tuition– 2000: Governor requires institutions to “rollback” tuition

20% replacing tuition revenue with general fund support.– 2000-2002: State-mandated tuition freeze continued.– 2002-2004: Tuition setting authority returned to

institutional boards.

Policy Pendulum

Student/State Share of Cost– 1976 – 1990: Explicit policy that students should cover

a standard percentage of the cost of their education In-state undergrads at 4-year institutions paid 25% of

“cost,” with “cost” varying by institution based on mission

In-state community college students paid 20% Out-of-state students paid 75% of cost State paid remaining shares

– Policy abandoned during 1990s; reinstated as a “goal” in 2001.

Policy Pendulum

Student Financial Aid– High tuition/high aid philosophy– Few explicit policies dictating appropriate levels of student

aid until mid 1990s– 1996 - 2000: SCHEV recommended that the state provide

enough support to meet 50% of student “remaining need”– State funding directed almost exclusively to support need-

based aid for in-state, undergraduates. – 2001: SCHEV recommended that the state focus

additional appropriations on most financially needy students rather than meeting 50% of remaining need for all students

VA’s Current Policies

Student Financial Aid– SCHEV’s 2001 policy requires all students to assume a

greater level of “self-help” with the intention of directing limited state funds to most financially needy

– Policymakers have been slow to embrace because of perception that the new model encourages “student debt”

Student/State Share– 25% goal reinstated for in-state, undergrads at four-year

institutions; 20% at community colleges

VA’s Current Policies

Tuition Policy – – The “Kitchen Sink” Approach– Authority returned to institutional boards with strong

recommendation from the state not to exceed 9% annual increase (cap not binding)

– Proportion of out-of-state students not increase at institutions currently with >= 25% out-of-state students

– Boards also encouraged to look at a variety of factors when setting policy, including:

VA’s Current Policies

Tuition Policy (con’t) –– Consumer Price Index– In-state tuition charges at public peer institutions– Ability to maximize resources through tuition increases on

out-of-state students and graduate students– Capital costs not captured in the standard calculation of

“cost of education”– Options that would require a portion of additional tuition

revenue be set aside for institutional student aid– Impact of tuition increases on access and quality of

applicant pool

Current Environment

• Explicit/implicit goals:– Make a college education affordable for in-state,

undergraduate students – Promote access for in-state, undergraduate

students (Limit access to out-of-state students)– Limit student share of cost– Limit student debt burden– Ensure higher education is accountable for

investment of public funds

Affordable education?

• By most indicators, a public college education is more affordable for most Virginia families now than it was a decade ago.

Affordable education?

1993-94 State and Student Share of the Cost of

In-State Undergraduate Education

Student Share38%

State Share62%

Student ShareState Share

Average cost of education = $5,850 in actual dollars or $7,327 in constant 2003 dollars.

2002-03 State and Student Share of the Cost of

In-state Undergraduate Education

Student Share26%

State Share74% Student Share

State Share

Average cost of education in 2003 dollars = $7,941.

Affordable education?

Tuition and Fees

Rank Among All States1

Estimated1989-90 1993-94 2000-01 2001-02 2002-03

Major Public Universities 8th 5th 18th 18th 18th

University of VirginiaPublic Colleges and State Universities 2nd 2nd 11th 12th 12th

George Mason UniversityOld Dominion University

James Madison UniversityLongwood University

Radford UniversityPublic Community Colleges 28th 19th 41st 43rd 43rd

(1) Based on a survey conducted by the Washington State Higher Education Coordinating Board. Although not all public institutions are included in this survey, the averages and changes

over time at the same set of institutions offer consistency, and the large number of institutions included provides a close approximation to state averages.

Affordable education?

Average Public 4-Year Total Undergraduate Cost as a Percent of Per Capita Disposable Income

28.4%

30.6%

32.3%33.3%

34.4%35.3%

36.6%

38.6%

34.3%

28.2%

32.9%32.6%33.0%32.6%32.4%32.1%31.6%

30.2%

33.8%34.6%

37.3%38.4%

39.4%40.3%40.1%40.0%

25.0%

27.0%

29.0%

31.0%

33.0%

35.0%

37.0%

39.0%

41.0%

43.0%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Virginia

National

Current Pressures

At least 32,000 additional students expected in the next decade (10% growth between 1990 and 2000)

Declining state revenues– Average 3% general fund reduction to institutions' base

E&G budgets in FY02; 9% for FY03; 12% for FY04– Additional cuts expected– Higher education share of state budget at lowest point in a

decade.

Disparate financial aid policies

Current Pressures

• Public “memory” and/or “attention span” often reaches only a few years. Students and their families are impacted for a relatively short time.

• Virginia’s governor serves only one term (only state in the nation) and other policymakers often driven by 2-4 year terms.

• As a result, the only comparison of interest is the one of today. Long-term strategies tend to be less meaningful.

Realigning the Pieces

• How do we define “affordable”?

• Affordable for whom?

• Access at what level?

Realigning the Pieces

• SCHEV Affordability Study- Evaluate proposed changes to student

financial aid allocations using student level data

- Establish options for identifying a long-term tuition policy for the Commonwealth

- Develop a methodology for determining the appropriate state share of cost

Realigning the Pieces

Systemwide Strategic Plan

– Quality and Access Working Group– Input from 18 regional focus groups and

SCHEV constituent groups– Leadership from top-level Strategic Plan

Advisory Committee

Governor’s Higher Ed Summit

Planning and Capacity Committee

– Enrollment issues– Program and site duplication– Patchwork quilt approach

“Selling” the Story

Why this issue is important?– Students/Families - Ability to plan and save for a college

education

– State Policymakers – Ability to plan and invest in higher education and student financial aid

– Institutions – Ability to carry out long-term planning based on predictable sources of funding

SCHEV

James Monroe Building

101 North Fourteenth Street

Richmond, Virginia 23219

Tel: (804) 225–2600

Fax: (804) 225–2604

TDD: (804) 371–8017

Web: www.schev.edu

STATE COUNCIL OF HIGHER EDUCATION FOR VIRGINIA

A D V A N C I N G V I R G I N A T H R O U G H H I G H E R E D

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