Integrating Higher Education Financing and Financial Aid Policy

1. Western Interstate Commission for Higher Education Changing Direction: Integrating Higher Education Financing and Financial Aid Policy NASSGAP Annual Meeting Cheryl D. BlancoDirector of Policy and Information cblanco@wiche.eduIndianapolis, INOctober 13, 2003

2. The problem • The project • The states • The publications • The future

3. The Problem: • Demand for higher ed • Declining or stable state allocations • Shared responsibility for financing • Access and opportunity with success

4. Policymaking remains fragmented • Financing and financial aid issues are dealt with as discreet items • Few – if any – states consider these policies as an integrated whole • Tuition is more than an affordability tool • Financial aid needs more than budget dust • Appropriations is a key access instrument

5. Jones’ Finance in Sync: Aligning Fiscal Policy with State Objectives • Funding is the dominant policy tool used to affect higher education institutions and the outcomes they produce • But it is seldom wielded effectively • Focuses on means without attention to the ends • Focused on institutions as recipients to the exclusion of other beneficiaries • Policies are so diffuse that the cumulative affects are negated

6. Identifies the distinct elements of financing policy • Describes alternative forms of these elements • Illustrates the alignment of these policies in the context of alternative state priorities

7. Flow of Funds

8. State-level financing must focus on 4 components: • Appropriations made directly to institutions for support of general operations • Tuition and fee policy • State student financial aid policy • Institutional student financial aid policy

9. While the prescription is straightforward—formulate policy in the four areas (within the context of federal policy) in concert rather than independently—it is seldom followed. These policies are typically made independently. On occasion, appropriations and tuition decisions are made simultaneously. Or tuition and student aid decisions. But very rarely are all these (appropriations, tuition, and student aid) considered as a package. And in most states, institutional financial aid is treated as something above, and separate from, those decisions more directly under the state’s purview. (Jones, Finance in Sync, 2003)

10. Why? • Different actors • Little or no integration of decisions • Different objectives

11. Results: • Taxpayers pay more than their fair share • Students find higher education unaffordable and opt out • Institutions fail to acquire the resources they need to fulfill their missions

12. We need new strategies • We need a new direction • We need support

13. The Project – Phase 1 • Structuring financial aid and financing policies and practices tomaximize participation, access, and success for all students. • Goal: better, more informed decision-making on issues surrounding financial aid and financing in higher education. • An integrated approach to restructuring appropriations, tuition, and financial aid policies and practices • Partners: ACE, SHEEO, NCSL

14. Venue for policymakers and educators to critically examine strengths and weaknesses of public policies • Develop new models by looking at emerging trends, their potential impact on higher education, and the policy implications related to issues of financial aid, finance, cost of education, and access.

15. How can policymakers more effectively integrate tuition, financial aid, and appropriations policies in ways that promote student participation and completion? • What kind of information and research is needed to strengthen policies and ensure their continuing effectiveness?

16. How well do the policies and practices of the student financing system serve the needs of different population groups?

17. Phase 1: Discovery and Development • Begin shaping a conceptual framework • Conduct a state financial aid, tuition, and appropriations policy inventory • Conduct a data inventory • Survey state legislators on their perceptions of effective financial aid, tuition, appropriations policies and practices • Establish a national advisory board on research issues and developing a research agenda, • Commission research papers • Identify states for case studies

18. The States: • Cohort of 5 • Arizona • Connecticut • Florida • Missouri • Oregon

19. State Activities in Phase 1: • Convene education, government and business leaders • Draft a plan for coordinating policies and decision-making processes • Develop recommendations on modifications to policy for next legislative session • Examine factors contributing to the growth in costs of higher ed • Review student aid programs and impact on retention, performance, and completion

20. State Accomplishments • Engaged key leadership at the board level, within the governor’s office, and among legislators • Developed new policy • Sustained a discussion and laid the ground for further work • Commissioned special studies

21. The Publications • Policies in Sync: Appropriations, Tuition, and Financial Aid for Higher Education • Integrating Financial Aid and Financing Policies: Case Studies from Five States • Linking Tuition and Financial Aid Policy: The State Legislative Perspective • Informing Public Policy: Financial Aid and Student Persistence • Tuition and Fees Policies in the Nation’s Public Community Colleges

22. More publications: • Exchanges bulletin with state profiles • Policy Insight report by Dennis Jones • Policy Insight report by Don Heller www.wiche.edu/Policy/Changing_Direction/Pubs.htm

23. What the project is not: • About control • A silver bullet • More money from the legislature • System and governance reform

24. The Future: Changing Direction Phase 2 • New cohort of technical assistance states • National policy forum • Leadership institutes for legislators, regents and board members, and governors’ ed policy advisors • Research Advisory Board • State Roundtables • Commissioned papers • Multi-state policy forum • Monitor state and national policy developments

25. Additional focus: Revenue Constraints • What do current weak fiscal conditions and projections mean for access, especially for low-income and underrepresented populations? • What do they mean for financial aid and financing policies for higher education? • What are some effective state strategies to work within constrained revenues and controlled expenditures that will result in greater access to higher education? • How does state funding for higher education interrelate to finding for other state priorities and to other federal priorities? How have these relationships changed over time? What will the priorities likely be in the future? • How do constrained revenues and expenditures affect access, delivery, and quality? • What is the role of boards and institutions in addressing constrained revenues and controlled expenditures to ensure increased access and high quality?

26. Additional focus issue: Retention • How do current financial aid and financing policies impact student retention at two- and four-year institutions? • What actions are states taking to create financial aid and financing policies that promote or erode student retention? • What actions are institutions taking to create policies that promote or erode student retention? • Which state policies appear to be most effective in increasing retention? • Which institutional policies appear to be most effective in increasing retention? • How can public policy incent institutions to work together to foster retention of rural, low-income and marginally-prepared students in college?

27. We can help you – • Call us for information • Visit our Web pages • Talk with your SHEEO if you’re interested in being part of the new state cohort • Consider holding a state roundtable • Call on our consultants

28. You can help – • What paper topics would you like to see? • What issues do you anticipate coming up in your next legislative session around financial aid?