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Increasing College Access and Success: Investing in Human Capital. MAP Capital Investment Bonds Presentation to Higher Education Finance Commission September 23, 2010. Students-in-Need Do Not Complete College.

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Increasing college access and success investing in human capital l.jpg

Increasing College Access and Success: Investing in Human Capital

MAP Capital Investment Bonds

Presentation to Higher Education Finance Commission

September 23, 2010


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Students-in-Need Do Not Complete College Capital

Source: Goldberger, Susan, “Doing the Math: What It Means to Double the Number of Low-Income College Graduates,” Minding the Gap: Why Integrating High School with College Makes Sense and How to Do It, 2007.


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Current Illinois Need-Based Grant Program Helps Low-Income Students Attend School

  • Since 1967, Illinois has provided grant assistance for low-income students through the Monetary Award Program (MAP)

  • In FY 2009, 144,230 students received MAP grants totaling $384 million

    • 56,326 MAP grants totaling $57 million went to students attending community colleges, with an average award of $1,008 per student

  • Critical factor in aligning workforce of the future to changing economic opportunities

Source: ISAC Databook, 2009


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MAP Funding FY2011 Students Attend School

  • FY2011 MAP appropriation is $404 M (plus S/LEAP)

  • Additional MAP funds in FY2011 come primarily from IIA - $4.5 million.

  • MAP not impacted by 2% reserve requirement

  • MAP remains the 4th largest state need-based aid program in the country


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Distribution of MAP Dollars Students Attend School



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Good Investments Shouldn’t Lack for Capital Rise while Funding is Level

  • MAP successful in helping students afford college

  • Opportunity for state-funded expansion limited; need greatest in challenging economy

  • Evaluate how much MAP recipients pay in state income tax revenue v. other low income taxpayers

  • Findings: College has a good return on investment from individual and state tax perspective

  • Good investments should not lack for capital

  • ISAC Challenge: How to get capital for education

  • ISAC Solution: Use capital markets to invest in people


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Individual Return to Education: Lifetime Earnings Are Greater for Those with More Education

Source: Georgetown University Center on Education and the Workforce, Help Wanted: Projections of Jobs and Education Requirements through 2018, June 2010, Figure 5.6


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State Return to Education: Income Taxes Increase Greater for Those with More Education

Source: ISAC Analysis of Illinois Dept. of Revenue data


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Maintaining or Even Sustaining Illinois Greater for Those with More Education’ Need-Based Program Is At Risk

  • 42,000 students eligible for MAP and who wanted to attend community college did not receive grants due to lack of funds in FY 09; only 28% actually enrolled without the MAP support

  • Each year, more students apply for these limited dollars. So far in 2010, over 70,000 eligible community college students have been denied MAP since funds ran out

  • Unlikely State will have resources in short- and long-term necessitating new, innovative approach

Source: ISAC data collection and analysis


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MAP Human Capital Investment Bonds Greater for Those with More EducationA New Paradigm in Funding

  • $550 million in bonds over 5 years

  • 10-year bonds

  • 100,000 low-income community college students per year funded; up to 50,000 additional students per year

  • $1,000 average MAP award

  • More funds, available to more students


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MAP Cap Bonds Are a Sound Investment Greater for Those with More Education

  • Expands the number of low-income community college students receiving MAP by nearly 50,000

  • Repays bonds with Illinois Income Tax revenue received from these MAP recipients

  • Income Tax revenue exceeds debt service each year, with a minimum debt service coverage ratio of 1.85


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Source: Loop Capital Markets analysis for ISAC Greater for Those with More Education


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Appendix I Greater for Those with More Education

Other studies find similar returns to higher education investment as ISAC/DOR Analysis




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Displaced Workers’ Earnings Increase After Attending Community College

Percentage of Earnings Increase by Age and Gender

Source: “Do Displaced Workers Benefit from Community College Courses? Findings from Administrative Data and Directions for Future Research, Louis Jacobson, Robert LaLonde, Daniel Sullivan, Hudson Institute Center for Employment Policy, October, 2005 http://ssrn.com/abstract=1020996


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Analysis of Census Data Finds Positive Federal Income Tax Return to College Completion

“[I]t is worthwhile for the federal government to invest in federal student aid if the per-student cost is less than about $57,000.”

Source: Mark Kantrowitz, “The Financial Value of a Higher Education, NASFAA Journal of Student Financial Aid, Vol 37, No1, 2007

Net Present Value of College Degree and Federal Income Tax, 2005


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Appendix II Return to College Completion

Details on MAP Program


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MAP Eligible Awards Return to College Completion


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MAP Eligibles by Region Return to College Completion


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MAP Recipients by Region Return to College Completion





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