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Before the House Higher Education Study Committee Representative Cliff Rosenberger Chair

Testimony of Bruce Johnson, President INTER-UNIVERSITY COUNCIL OF OHIO September 19, 2013. Before the House Higher Education Study Committee Representative Cliff Rosenberger Chair. The Big Goal – Closing the Degree Gap The Lumina Foundation.

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Before the House Higher Education Study Committee Representative Cliff Rosenberger Chair

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  1. Testimony of Bruce Johnson, President INTER-UNIVERSITY COUNCIL OF OHIO September 19, 2013 Before the House Higher Education Study CommitteeRepresentative Cliff RosenbergerChair

  2. The Big Goal – Closing the Degree GapThe Lumina Foundation The Big Goal – Closing the Degree GapThe Lumina Foundation

  3. This is a graph provided by the Lumina foundation. It predicts a significant gap between the number of degrees being produced in Ohio and the number needed. • To win the competition for jobs, Ohio must close the existing “gap” between new and evolving employer needs and workforce knowledge and skills. A substantial majority of new jobs being created (more than 60 percent by 2020) will require postsecondary education credentials. • Ohio has a nearly one million graduates “gap” between the number of college-educated adults we currently have and the number we are going to need to meet projected demand. • As reported in the Cleveland Plain Dealer on Tuesday, September 17, 2013, an analysis released by the Pew Charitable Trusts found that a college degree, along with marriage, offers the surest path to economic mobility. The Gap Won’t Close Unless Some Things Change

  4. Actual and projected numbers for enrollment in all postsecondary degree-granting institutions, by age group: Fall 1996, fall 2010, and fall 2021Source: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS)

  5. This is a graph provided by the National Center for Education Statistics and depicts enrollment by age of student. • The National Center for Education Statistics reports there are more than 21 million post-secondary students enrolled in degree-granting institutions in the U.S., and almost eight million of them, or 38%, are older than 25. • Enrollment in postsecondary degree-granting institutions of students who are 25 to 34 years old: • Increased 45% between 1996 and 2010; and • Is projected to increase 20% between 2010 and 2021. • Enrollment in postsecondary degree-granting institutions of students who are 35 years old and over: • Increased 32% between 1996 and 2010; and • Is projected to increase 25% between 2010 and 2021. • Enrollment in postsecondary degree-granting institutions of students who are 18 to 24 years old: • Increased 52% between 1996 and 2010; and • Is projected to increase 10% between 2010 and 2021. Closing the Gap – Why Focus on Non-Traditional Students?

  6. PATHWAYSTOSUCCESS INTEGRATINGLEARNINGWITHLIFEAND WORK TOINCREASENATIONALCOLLEGECOMPLETION A REPORTTOTHEU.S.CONGRESS ANDSECRETARY OFEDUCATION ADVISORY COMMITTEEON STUDENTFINANCIALASSISTANCE WASHINGTONDC FEBRUARY2012

  7. Pathways to Success – Understanding the Challenge • Basedonthe2011Education ataGlancereportfromtheOrganizationforEconomicCooperationandDevelopment(OECD),college attainmentrates foryoungadults intheU.S.haveremained relatively stagnantataround 40% inthe recentpast. • As a result, the U.S. has been falling in rank among the share of degreed adults age 25 to 34 among developed nations (OECD 2011). • In addition, a 2010 Brookings Institution report, State of MetropolitanAmerica,notesthat thebachelor’sdegree attainmentrateofAmerican24-to34-year-oldsis nowlowerthanthatof35-to44-year-olds. • Stagnantor fallingdegreeattainmentrates,particularlyamongyoungAmericans,threatenthenation’soverallglobal competitivenessandfurtherexacerbateinequalityin income distribution. • For non-traditional students, financial barriers to higher education are a primary cause of part-time and delayed enrollment. • According to a 1996 analysis from the National CenterforEducationStatistics,only31%ofnontraditionalundergraduateswitha bachelor’s degree objective attained a degree within 5years as opposed to 54%of traditional undergraduates. • In addition, 38%of nontraditional undergraduates left school in their first year as opposed to 16%of traditional undergraduates.

  8. Maintain state funding for public colleges and universities and implement innovations in state funding for institutions and students to improve degree completion rates. • Implement aid programs that encourage academic preparation and focused study. • Fund student support services to provide personalized guidance and academic support necessary for success. • Reassess the structure of financial aid systems and programs for the nontraditional student. • Focus financial aid on needy students who wish to obtain their degree and on institutions that serve nontraditional students well. • Create a new grant program for middle-income working students which would ease the burden of debt for many nontraditional students who are debating to enroll and complete their degree. • Maintain the Pell maximum would help ensure student success. • Decentralize aid programs. States may provide need-based aid to institutions based on the percentage of needy students they enroll and allow the institutions the flexibility to use professional judgment in awarding aid. Pathways to Success - Conclusions

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  10. Public FTE Enrollment, Educational Appropriations and Total Educational Revenue per FTE, Ohio – Fiscal 1986-2011Source: SHEEO

  11. This graph shows Ohio’s growth in tuition, it’s reduction in per student state support, and it’s overall enrollment growth. • In its latest compilation of State Higher Education Finance data, the State Higher Education Executive Officers organization reports that state and local per student support fell to $6,290 in 2011, the lowest level in 25 years. • The start of the 2012-2013 academic year will see a series of published tuition rate increases at public colleges and universities throughout the U.S., passed in response to state appropriations that were reduced or held flat. • Over the past decade, The College Board estimates that published in-state tuition rates at public colleges and universities across the country have increased at 5.6 percent beyond the rate of general inflation. Total Educational Revenue in Ohio is Decreasing Tuition Is Up and State Share of Support Is Down

  12. State Share of Instruction Per FTE by SectorFY2003-FY2012Source: Ohio Legislative Service Commission

  13. Percent Change by State in Educational Appropriations and Net Tuition Revenue per FTE by State, Fiscal 1996-2011

  14. Over the past 5 years, public university tuition rose less in Ohio than 48 other states. • Between the 2007-08 and 2012-13 school years, annual published tuition at four-year public colleges and universities in the US grew, on average, by $1,850, or 27 percent, in real terms. • After adjusting for inflation, average tuition increases since the 2007-08 school year at public four-year institutions nationwide have ranged from 2.2% (Maryland) to 78.4% (Arizona). • During that same period, average tuition at Ohio’s public four-year universities increased by just 2.8 percent, or $249, after adjusting for inflation. • For at least the last quarter-century, state and local funding for higher education has been dropping, and tuition has been increasing.  • This trend has meant that students have assumed much greater responsibility for paying for public higher education without those institutions receiving more money to fund quality improvements. • In 1987, public colleges and universities received 3.3 times as much in revenue from state and local governments as they did from students.  They now receive about 1.1 times as much from states and localities as from students. Source: Center on Budget and Policy Priorities. March 19, 2013 Report “Recent Deep State Higher Education Cuts May Harm Students and the Economy for Years to Come” Even Though Tuition Continues to Rise, It Rose Less in Ohio

  15. Illinois – Up to $10,000 for single filers / $20,000 for joint filers. • Indiana – 20 percent tax credit up to $5,000 in contributions per individual tax return per year. The maximum yearly credit is $1,000. • Michigan – Up to $5,000 for single filers / $10,000 for joint filers. • Ohio – Up to $2,000 per beneficiary. • Pennsylvania – Up to $12,000 per beneficiary per taxpayer (any state plan). • West Virginia – Full amount of contribution. • Kentucky – Does not provide tax advantages for investment in college savings plans. State Tax Advantage for 529 College Savings PlanSource: Peterson's Staff updated on Friday, January 25, 2013

  16. About 57% of students who earned bachelor’s degrees in 2010-11 from the public four-year colleges at which they began their studies graduated with debt. • The average debt per borrower was $23,800, up from $20,100 (in 2011 dollars) a decade earlier. • The percentage of 529 assets held in prepaid tuition plans declined from 81% in 1999 to 31% in 2002, to 14% in 2007, and to 12% in 2012. • Tax advantages in Ohio are relatively low and could be increased to provide incentive for savings. • The IUC supports Senate Bill 108 (Jones) which increases the maximum income tax deduction for college savings contributions to $10,000 annually for each beneficiary. Incentives to Save and Reduce Student Debt

  17. 85% of parents felt strongly that college was an investment in their child’s future, the highest proportion seen in the last five years. • The belief that students will earn more money with a college degree has remained consistently strong in 2013 (64% among all families), and more than half of families felt they would rather borrow to pay for college than not go at all. • Parents in 60% of families funded college through personal contributions in 2013. • However, only half as many families (28%) used money set aside in parents’ savings funds. • While parent income and other investments are shrinking as sources of funds to pay for college, reliance on 529 college savings plans appears to be shifting upward. • In 2013, contributions from 529 college savings plans covered 7% of the total costs of college. This is an increase from 2012 when 529 college savings covered 4% of costs, and is equal to the percentage of costs covered from these plans in 2010 (7%). Paying for a College Degree – The Importance of SavingSource: How America Pays for College 2013; Sallie Mae’s National Study of College Students and Parents

  18. Approximately 60% of 2012 college graduates who took part in paid internships received at least one job offer. • Among those interning for for-profit employers, 64% earned job offers compared to 38.3% of their unpaid peers. • Paid interns spent 42% of their time on professional duties (analysis and project management) and just 25% on clerical and non-essential functions. Co-op/Internship & Workforce Development Source: 2012 Student Survey, National Association of Colleges and Employers

  19. The IUC supports the big goal – 60% degree attainment by 2025. • Unfortunately, if we keep utilizing the same tools we will fail. • This failure will have devastating implications for Ohio’s economy and for Ohio families. • This committee is correct to focus on nontraditional students because more than half of the gap needs to be fill by those students. • This is a challenge that every university must address. • To remain competitive, Ohio public institutions of higher education must respond, adapt, and innovate. • New and flexible learning options, assessments, and creative student support services must be offered. • Support services to make the experience more efficient and learner friendly must be offered. • The increasing cost of attending public universities must be constrained. • Financial assistance and state support must be increased and targeted in a way to create more educational opportunities for more potential students. • The quality of instruction must be world-class. Improving quality is imperative. Conclusion

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