Need- and Merit-Based Aid: Working Together to Achieve Student Success

1. Presented by: Demarée K. Michelau Policy Associate, Policy Analysis and Research Western Interstate Commission for Higher Education (WICHE) October 22, 2007 Need- and Merit-Based Aid: Working Together to Achieve Student Success

2. The Western Interstate Commission for Higher Education (WICHE) What WICHE does: Works with its 15 member states (AK, AZ, CA, CO, HI, ID, MT, ND, NM, NV, OR, SD, UT, WA, WY) to promote access and excellence in higher education for all citizens of the West How WICHE accomplishes this: By promoting innovation and efficiency through interstate collaboration Why WICHE does this: To advance the region’s economic, social, and civic life

3. The Organization • Chartered by Congress as an interstate compact in 1953 • Each state has three Commissioners, appointed by the governor for four-year terms • Location of office: Boulder, Colorado

4. Policy Analysis and Research Unit • Works closely with policymakers and education leaders in each WICHE state • Fosters opportunities for discussion of issues and policy options • Provides members with quantitative and qualitative information and analyses to support decision-making • Identifies emerging issues • Tracks trends, particularly those of importance to the West

5. Changing Direction: Integrating Higher Education Financial Aid and Financing Policy • Five-year project funded by Lumina Foundation for Education • An integrated, multi-dimensional approach to aligning appropriations, tuition, and financial aid policies and practices • Venue for policymakers and educators to critically examine strengths and weaknesses of public policies • Partners: • National Conference of State Legislatures (NCSL) • State Higher Education Executive Officers (SHEEO) • American Council on Education’s Center for Policy Analysis (ACE)

6. Changing Direction: Goals and Objectives Primary Goal: To structure financial aid and financing policies and practices tomaximize participation, access, and success for all students • Objective 1: To equip policymakers and higher education leaders from all sectors to address more effectively the integration of key public policy issues to achieve, as effectively as possible, goals of access to quality higher education • Objective 2: To expand upon the community of well-informed policy leaders on higher education issues • Objective 3: To promote linkages among state, federal, and private-sector institutional policies and programs in order to more powerfully achieve participation and success in higher education for a diverse student clientele • Objective 4: To improve regional and national collaboration toward these ends

7. Changing Direction’s Accomplishments • Increased state capacity on the issues • Enhanced understanding of the issues by key policymakers and policy shapers • Developed new policy • Added to the knowledge base by filling gaps in the research • Maintained high visibility for the project’s goals

8. Direct Services: State Technical Assistance Cohort 1 • AZ, CT, FL, MO, OR Cohort 2 • HI, ID, LA, OK, TN Cohort 3 • CA, KY, NM, WA

9. Meetings and Policy Forums In total, 44 states participated in at least one of the following: • National Policy Forum • Multistate Policy Forums • Technical Assistance Workshops • Leadership Institutes • Members of governing boards • Governors’ education policy advisors • State legislators • State legislative staff

10. Publications • Integrating Higher Education Appropriations, Tuition, and Financial Aid Policy: Case Studies from the Changing Direction Technical Assistance States (Pending) • Thinking Outside the Box: Policy Strategies for Readiness, Access, and Success (March 2007) • Strategies for Improving Student Success in Postsecondary Education (January 2007) • Exchanges - Sharpening the Dialogue: Engaging Policymakers in the Alignment of Appropriations, Tuition, and Financial Aid (December 2006) • Policy Insights – What State Policymakers Should Know About Federal Higher Education Policy (September 2006) • State Financial Aid: Policies to Enhance Articulation and Transfer (March 2005) • Linking Tuition and Financial Aid Policy: The Gubernatorial Perspective (October 2004) • Exchanges – Changing Direction: A National Policy Forum (September 2004)

11. Publications • Informing Public Policy: Financial Aid and Student Persistence (August 2003) • Integrating Financial Aid and Financing Policies: Case Studies from Five States (August 2003) • Linking Tuition and Financial Aid Policy: The State Legislative Perspective (August 2003) • Policy Insights – Financial Aid and Student Persistence (October 2003) • Policy Insights – Financing in Sync (October 2003) • Tuition and Fees Policies in the Nation’s Public Community Colleges (September 2003) • Policies in Sync: Appropriations, Financial Aid, and Financing for Higher Education (April 2003) • Exchanges – What is Changing Direction? A Project Overview (May 2003)

12. State Grant Aid and Its Effects on Students’ College Choices • Authors: Patricia M. McDonough, Shannon M. Calderone, and William C. Purdy • Goal: To explore how existing state financial aid policies affect student choice (which college to attend, where to attend college, and whether to attend college at all) • Expectations: • No new data, but a description of the state policy and analyses and findings already available • Observations on how state financial aid policies can and should influence student choice • Suggestions or guidelines that policymakers might consider when evaluating their own state policies to influence student choice

13. The End Product Data are limited on the effect of financial aid on students’ choices, but: • Need-based aid: Programs that help the neediest students afford college • Merit-based aid: Programs that in part help keep the “best and brightest” at home; in part encourage students to perform to their highest potential; and in part to address legitimate middle-class college-cost concerns. And, it doesn’t hurt that they are politically popular. • Blended-aid: Programs that blend the best attributes of both approaches • Indiana • Oklahoma

14. Indiana’s 21st Century Scholars Program: Purpose • Help more students continue their education • Reduce the high school dropout rate • Prepare students for the workforce • Decrease the use of drugs and alcohol among middle and high school students • Improve individual economic productivity and the quality of life for all Indiana residents • Increase opportunities for low-income students to attend college

15. Indiana’s 21st Century Scholars Program: History • Created through legislation in 1990 • First funds distributed to over 5,000 students in 1990-91 • Average scholarship awarded in 1999-2000 was $1,350 Source: McDonough, Patricia M., Shannon M. Calderone, and William C. Purdy. State Grant Aid and Its Effects on Students’ College Choices. Boulder, CO: Western Interstate Commission for Higher Education, 2007.

16. Indiana’s 21st Century Scholars Program: Enrollment Requirements Income guidelines as stated on the 2005-2006 Twenty-first Century Scholars Application Household SizeMaximum Annual Income 2 $23,736 3 $29,767 4 $35,798 5 $41,829 6 $47,860 (For each additional person in the household, add $6,031) NOTE: Income guidelines are equivalent to the free and reduced lunch program schedule Source: Presentation by Stan Jones, Commissioner for Higher Education, Indiana Commission for Higher Education, 2006.

17. Indiana’s 21st Century Scholars Program: Scholarship Eligibility • Be a resident of Indiana • Be a U.S. citizen • Be enrolled in the 7th or 8th grade at an Indiana school accredited by the Indiana Department of Education • Meet income requirements or be a ward of the court (foster child) • Make a commitment to fulfill the Scholars Pledge

18. Indiana’s 21st Century Scholars Program: Scholars Pledge • I will graduate with an Indiana High School Diploma from a charter school, freeway, or other Indiana school accredited by the Indiana Department of Education through Performance-Based Accreditation. • I will achieve a cumulative high school GPA of at least 2.0 on a 4.0 scale. • I will not use illegal drugs or alcohol, or commit a crime. • I will apply for admission to an eligible Indiana college, university, or proprietary school as a high school senior. • I will apply on time for state and federal financial aid. • I understand that I must be an Indiana resident, a U.S. citizen or eligible non-citizen. Enroll as a full-time student at an eligible Indiana college or proprietary institution and meet all other financial aid requirements at the institution I attend. Students must also file an error free FAFSA.

19. Indiana’s 21st Century Scholars Program: Award • Scholars receive the cost of four years of college tuition at any participating public college or university in the state • If a student attends a private college, the state awards an amount comparable to that of a public institution • If a student attends a proprietary school, the state awards a tuition scholarship equal to that of Ivy Tech Community College of Indiana Source: DRAFT Presentation from the Indiana Commission for Higher Education Website (http://www.che.state.in.us/Powerpoint/2007/Twenty-First%20Century%20Scholars%20are--final.ppt#4).

20. Indiana’s 21st Century Scholars Program: The Results A recent study conducted by the Indiana Education Policy Center indicates: • 9th grade students participating as 21st Century Scholars were significantly more likely than non-Scholars to enroll in college • Of the 2,202 students in the study, nearly 80% enrolled in an Indiana college within one year of high school graduation Source: Presentation by Stan Jones, Commissioner for Higher Education, Indiana Commission for Higher Education, 2006.

21. Indiana’s 21st Century Scholars Program: The Results Demographic snapshot of Scholars • 56 percent Female • 44 percent Male • 68 percent Caucasian • 26 percent African American (African Americans represent 9 percent of the state’s population; 8.9 percent of Indiana’s college enrollment) • 2 percent Native American, Native Hawaiian, or other • 2 percent Hispanic • 1 percent Asian • 1 percent Multi-racial Source: DRAFT Presentation from the Indiana Commission for Higher Education Website (http://www.che.state.in.us/Powerpoint/2007/Twenty-First%20Century%20Scholars%20are--final.ppt#5).

22. Indiana’s 21st Century Scholars Program: The Results • 58 percent first-generation college students • 49 percent single-parent family • Median family income was $29,000 (median family income of students not eligible for state aid was $80,000) Source: DRAFT Presentation from the Indiana Commission for Higher Education Website (http://www.che.state.in.us/Powerpoint/2007/Twenty-First%20Century%20Scholars%20are--final.ppt#6).

23. Indiana’s 21st Century Scholars Program: The Results Following enrollment in the program, students and parents receive support through 16 regional service centers. In 2004-05: • 17,726 Scholars received tutoring, mentoring, academic counseling, and other support services • 2,946 Scholars participated in college visits • 5,026 Scholars completed Senior Exit Interviews • 924 Parents participated in college visits • 7,162 Parents received services from local support sites • 1,110 Parents participated in Regional Parent Conferences • 320 Parents attended the Annual State Parent Conference • 20 Parents graduated from the Parent Leadership Academy Source: Presentation by Stan Jones, Commissioner for Higher Education, Indiana Commission for Higher Education, 2006.

24. Indiana’s 21st Century Scholars Program: Final Notes Demographic and trend data are positive, and rigorous analysis supports it • The percentage of high school graduates moving from high school directly to college increased; Indiana was ranked 40th in 1986 and ninth in 2002 • Scholarship recipients were more likely than nonrecipients to attend all types of colleges and universities • In 2004, Indiana retained 86 percent of resident freshmen students enrolled in four-years institutions who had graduated from high school in the previous year Source: St. John, E.P., Droogsma Musoba, G., Simmons, A.B. and Chung, C. Meeting the Access Challenge: Indiana’s Twenty-first Century Scholars Program. Indianapolis: Lumina Foundation for Education New Agenda Series, 2002.

25. Oklahoma’s Promise–Oklahoma Higher Learning Access Program (OHLAP): Purpose • Increase the number of college graduates in Oklahoma • Encourage more students from families with limited income to aspire for college, academically prepare for college, and earn college degrees

26. Oklahoma’s Promise-OHLAP: History • Scholarship program began in 1992 with first funds awarded to 1996 high school graduates • In 1995, the primary administration moved to the Oklahoma State Regents for Higher Education; increase from the original 15-unit to 17-unit core • Infusion of GEAR UP funding occurred in 1999 • Income limit was raised from $32,000 to $50,000 in 2000 • In 2004, voters approved SQ 712 which dedicates 12 percent of gaming revenue (horse-racing and tribal facilities) for scholarships • In 2007, with the urging of Governor Brad Henry, the legislature passed a bill that created a dedicated funding source for the program

27. Oklahoma’s Promise-OHLAP: Enrollment Requirements • Students must enroll during the 8th, 9th, or 10th grade • Family income may not exceed $50,000 at the time of enrollment (income is not reconsidered at a later date)

28. Oklahoma’s Promise-OHLAP: Scholarship Eligibility • Complete 17-unit core curriculum based on college admission requirements • Graduate from a public or private high school (home-schooled students are not currently eligible) • 2.5 cumulative GPA in the required core • 2.5 cumulative GPA overall • Attend school regularly • Refrain from substance abuse • Refrain from criminal/delinquent acts

29. Oklahoma’s Promise-OHLAP: Award • Scholarship awards continue to grow as tuition rises • In 2005-06, the average award was over $2,100, an increase of $650 (almost 45 percent) since 2001-02 Source: Oklahoma’s Promise-OHLAP 2005-06 Year-End Report.

30. Oklahoma’s Promise-OHLAP: The Results Demographic and trend data are telling: • Scholarship recipients outperform their peers (82 percent of scholarship recipients went immediately to college compared to 59 percent of all high school graduates in 2004) • Women have a 10 percent higher rate of earning scholarships than men, although their ratio in the high schools is nearly equal • Racial/ethnic groups earning scholarships nearly represent their percentage in the overall population; American Indian students earn scholarships at a lower rate (about 6 percent) • Over 1,000 foster care students enrolled since fall 2003 Source: McDonough, Patricia M., Shannon M. Calderone, and William C. Purdy. State Grant Aid and Its Effects on Students’ College Choices. Boulder, CO: Western Interstate Commission for Higher Education, 2007.

31. Oklahoma’s Promise-OHLAP: Final Notes • The number of scholarship recipients has grown, but the costs have, too. By 2008-09, costs are projected to increase to $58.3 million (up from $25.6 million in 2005-06), and the number of recipients are projected to reach nearly 20,000 compared to 12,089 in 2005-06 • Social marketing campaign for college access was key

32. Closing Comments: • The dichotomy between merit-based and need-based aid may no longer be an effective way to think about state financial aid • While merit- and need-based aid financial aid have specific goals and purposes, blended aid programs are a promising strategy for states as they work to increase access and success for their neediest students. • There is always a need for more data.

33. For More Information: Demarée K Michelau Policy Associate, Policy Analysis and Research, WICHE 303.541.0223/dmichelau@wiche.edu WICHE: www.wiche.edu Changing Direction Project: http://wiche.edu/Policy/Changing_direction/index.htm