STATE ISSUES

1. STATE ISSUES NASSGAP Spring Conference June 2005 Washington DC

2. ALABAMA, ALASKAARKANSAS, ARIZONA Nothing submitted

3. CALIFORNIA - I The state budget outlook for Cal Grant awards for 2005-06 is promising. Funding levels in the May revision of the Governor’s proposed budget would provide $774.7 million to fund 191,500 new and renewal Cal Grant Entitlement and Competitive awards. Those awards will cover the full systemwide fees for recipients at the University of California and the California State University and $8,322 for new recipients at independent institutions and private career colleges. The latter amount restores the new award to the level set in 2004-05 which represented a 14 percent reduction from prior years. A total of $723.7 million for Cal Grant funding would come from the state General Fund and $51 million from theStudent Loan Operating Fund.

4. CALIFORNIA - II The issue of how to set and adjust the maximum Cal Grant award for students at non-public institutions was the subject of a special Student Aid Commission study this year that resulted in a recommendation to establish a new statutory policy. The proposed cost-neutral policy would set the award level at the estimated average General Fund cost of educating a student at a public four-year institution (approximately $10,568 for 2005-06). Legislation to establish such a policy has been introduced but under current budget circumstances would likely include a phase-in that would probably not start until after the 2005-06 award year.

5. COLORADO &CONNECTICUT • Nothing submitted

6. DELAWARE - I Delaware continues to maintain healthy economic times. The most recent revenue forecast for FY06 shows an increase of about $200 million over the initial forecast in June 2004. There will be one more meeting of the Delaware Economic and Financial Advisory Council (DEFAC) in June before the final FY06 budget is passed.

7. DELAWARE -II In the Governor's recommended budget we had increases for our Teacher Corps Scholarship program (math, science, special education in a content area) from $50.0 in current budget to $250.0 for FY06. Unfortunately we don't have nearly enough applicants for those funds. There was no recommended increase to our $250. request for the state grant program. There was an additional $75. added to our Critical Need Scholarship Program (teacher reimbursement) per our request.

8. DELAWARE - III Legislation: • A bill currently pending that would put into Delaware Code the P-20 Council established by the governor through a previous executive order in August, 2003. • A bill currently pending that would allow Delawareans to subtract up to $5,000 from the federal adjusted gross income for contributions made into the Delaware College Investment Plan for the purpose of State personal income taxes.

9. DELAWARE - IV A bill currently pending that would create the Delaware Student Excellence Equals Degree (SEED) Program. The goal of this Act is to encourage Delaware students to stay in school, avoid contact with the criminal justice system, excel academically, and have access to higher education regardless of a family's financial circumstances. Specifically, this program provides a tuition scholarship for eligible students enrolling on a full time basis in pursuit of an associate's degree at Delaware Technical and Community College directly after graduating from high school. The program will be effective for students graduating in the 2005-2006 school year.

10. DISTRICT OF COLUMBIA • Nothing submitted

11. FLORIDA - I • The Florida Department of Education, Office of Student Financial Assistance, Scholarship and Grants Office is successfully expending 2004-05 academic year appropriations. • In addition, the 2005 Florida Legislative Session made very minor modifications to existing programs and created no new programs for the 2005-06 academic year.

12. FLORIDA - II • The funding for the 2005-06 academic year has been approved by Governor Bush and awards an approximate 13% increase to student financial aid for a total budget of $527 million. • Florida Legislature sets tuition and fees for publicly funded institutions and has approved a 5% increase for tuition and fees.

13. FLORIDA - III • The minor statutory recommendations to current law included • (1) program enhancements for our military students participating in the Operation Iraqi Freedom, and • (2) recognition of the Advanced International Certification of Education (AICE), an acceleration curriculum, to meet high school eligibility criteria in our merit scholarship program.

14. GEORGIA - I • No major legislative changes for 2005. • GSFC is in the process of doing research on how much Pell funding goes to students receiving the HOPE Scholarship and grant. • Georgia's HOPE scholarship and grant programs are not need-based, yet they provide substantial financial aid to needy students.

15. GEORGIA - II • In 2002, 56,879 students who received Pell awards also received HOPE in the total dollar amount of $87,812,253. This sum was about 27.19% of all HOPE dollars awarded. • In 2003, 67,453 students who received Pell awards received HOPE in the total dollar amount of $102,742,105. This constituted 28.39% of the total HOPE dollars awarded. • In 2004 some 74,083 students who received Pell awards also received HOPE awards totaling $117,625,717. In 2004, this sum constituted 29.01% of all HOPE awards ($405,463,233).

16. GEORGIA - III • HOPE awards to Pell eligible students almost matches the Pell total, and has the practical effect of almost doubling Pell. • Pell awards in 2002 to HOPE eligible students totaled $94,998,142; in 2003, $120,471,968; and, in 2004, $135,244,068.

17. HAWAII & IDAHO • Nothing Submitted

18. ILLINOIS - I ISAC has been working with the Tax Assistance Program in Chicago to add FAFSA completion to the tax preparation services offered. TAP is one of the largest free tax preparation services in the country and assisted more than 8,000 families in 2004. ISAC staff initially provided FAFSA completion assistance every Saturday in February alongside tax preparation services. Staff then began working with TAP in April 2004 to develop a training plan, training materials, and schedule training sessions. FAFSA completion training has now been provided for every one of the more that 1,700 tax preparation volunteers in the program. In addition, approximately 55 financial aid site leaders have also been trained. Site leaders received additional in-depth training on the financial aid process and will answer questions that are not tax-related. In addition, ISAC staff assisted TAP during the 2005 tax filing season by providing coverage for their "financial aid hotline" and by visiting 21 taxprepartion sites on a rotating basis.

19. ILLINOIS - II The data regarding FAFSA completion for he 2005 tax season has been compiled and the results are encouraging. Nearly 1,200 FAFSAs were completed with the assistance of TAP volunteers. In ZIP codes where a TAP site exists, there was an increase of 17% in FAFSA data sent to ISAC between January 2nd and March 31st as compared to both the 2003-04 and 2004-05 academic years. This is in contrast to an overall decline of 1% in applications statewide. ISAC staff have already met with TAP staff to begin planning for the 2006 tax season.

20. INDIANA - I Indiana elected a new Governor in November; Mitch Daniels, President Bush's former OBM Director. Governor Daniels ran on balanced-budget and economic development platform and both he and the state's biennium budget process started to work on the state’s budget in earnest the day after his inauguration. Indiana’s biennial budget process ended on time the last week of April. Lawmakers had to make difficult budget decisions thus funding for many state programs and their administrative budgets were flat lined, cut or increased modestly. Fortunately the legislature increased appropriations for need-based student aid grant program and the agency is very grateful for their actions in this regard.

21. INDIANA - II State grant award funding levels for 2006-07 AY will depend in large part on changes the federal government may make to the FAFSA (or the methodology that is used to determine need) that could decrease EFCs/PCs and thus increase demand for state aid(for example, raising the auto zero EFC from $15,000 to $25,000).

22. IOWA - I In Iowa there was much Legislative discussion about whether funds from Iowa's largest state grant program - the Iowa Tuition Grant - should be provided to students at for-profit proprietary colleges and universities. Final language stipulates that 10% of the appropriation be provided to students attending for-profit proprietary institutions in Iowa.

23. IOWA - II The Legislature directed the Commission to develop "recommendations for a policy regarding the protection of educational consumers for inclusion in the definition of accredited private institution." The recommendations are to be based on a study that includes the following: * Percentage of students enrolled at each institution who have high school equivalency diplomas; * Percentage of non-traditional students enrolled at each institution; and * The institutional cohort default rate.

24. IOWA - III The State of Iowa Scholarship Program's appropriation was removed from the Code. The merit-based Scholarship Program has been funded since 1965. Because Scholars have been designated and awards announced to nearly 1,500 students for the 2005-06 academic year, awards will be provided from a state grant reserve fund established to assist with program shortfalls.

25. KANSAS & KENTUCKY • Nothing submitted

26. LOUISIANA - I • 2005 – Legislative Fiscal Session • “Sin” Tax to increase teacher pay • Board of Regents Tuition Bill • 93% of SREB Average • 5% set aside for Institutional Need Based Aid Programs • How will TOPS be affected?

27. LOUISIANA - II • TOPS Tech Early Start Award • TOPS = Taylor Opportunity Program? • WICHE Study • Appropriations • Tuition • Financial Aid

28. LOUISIANA - III • LOSFA may seek Voluntary Flexible Agreement if current funding model for guarantors is not addressed in Reauthorization (or prior). • START Saving Program • Implemented equity options in 2004 • 62% have remained with fixed rate option • Assets have grown to $75M

29. LOUISIANA - IV • WILL THE STATE LOSE THE SAINTS???

30. MAINE - I • The State Legislature provided FAME with a slight increase when they passed the budget on April 1, 2005. The Governor is now proposing a 5% decrease across the board on all State Programs as a result of the potential base closings recently announced.

31. MAINE - II • Using additional funds from the College Savings Plan, FAME is starting a new grant program which will supplement our current Maine State Grant Program. Almost 2 million dollars is being provided towards this new program. • The first graduating class for the GEAR UP program will be eligible for scholarships in AY 05-06. Over 100 students will be receiving scholarships from this program. Approximately 70 % of eligible students filed a FAFSA that were participants in this program.

32. MARYLAND - I Funding for Maryland’s financial aid programs will increase by 12.2% in FY 2006, from $83 million to $93.1 million. With the exception of a small increase in the Delegate Scholarship program, this funding increase has occurred in Maryland’s need-based aid programs. Approximately $14 million has been allocated to need-based aid programs to assist full-time, part-time and graduate students. This funding increase has been funded partially through the phase out of the HOPE Scholarship programs and partially from additional general funds. Maryland began phasing out the HOPE Scholarship program in FY 2005. The program will be completely phased out beginning with FY 2008.

33. MARYLAND - II In addition to being able to accommodate more students in the programs, Maryland was able to implement a formula change within its largest need-based aid program to award community college students at a greater percentage of need, 45% versus 35%. During the recently concluded session, legislation also passed to establish the Distinguished Scholar Community College Transfer Scholarship.

34. MASSACHUSETTS & MICHIGAN • Nothing submitted

35. MINNESOTA - I Minnesota legislature is supposed to finish May 23rd but there is a high likelihood of a special session so we might not be finished by the time of the NASSGAP conference. This is the first year of operation during the legislative session with a Governor appointed Director. The House the Senate bills treat the State Grant very differently so at this point it is uncertain what changes are in store for the State Grant.

36. MINNESOTA - II The agency will be given many new projects by the legislature and by the Governor. • One is to set up an Accountability System for Higher Education. • Another is to develop plans for establishing a new University in Rochester, Minnesota. • A third is to propose a new way to fund higher education in the state.

37. MISSISSIPPI • Nothing submitted

38. MISSOURI - I • Staff reductions due to state budget cuts • Merging all of IT staff in state government into one agency, the office of administration. Currently each department has their own IT staff. The merging of IT staff will be effective beginning July 1, 2005

39. MISSOURI - II • The Department of Higher Education appointed a statewide task force to review the structure of existing state funded student aid programs. Report is due October 2005 • Consideration by the Legislature of merging the department of higher education with the department of elementary and secondary education • Governor appointed a statewide commission to study and propose a plan on how to restructure state government to be more efficient. Report is due to the governor early next year.

40. MONTANA • Nothing submitted

41. NEBRASKA - I • Nebraska started off 2005 by saying good-bye to our Governor and our Executive Director of the Coordinating Commission for Postsecondary Education (CCPE). • Governor Mike Johanns was nominated by President Bush and approved by the US Senate as the country's new Secretary of Agriculture. • Lt. Governor Dave Heineman was elevated to the position of Governor in January. • Dr. David Powers, who served as the Executive Director of the CCPE for 10 years, retired to Washington. • Dr. Marshall A. Hill, who came from Texas, was hired as our new Executive Director in February.

42. NEBRASKA - II The Legislature received good news in that the economy was performing much better than the previous three years. This allowed our funding request of an additional $1.2 million in each of the next two fiscal years for our state grant program to be approved. This is on top of the previously approved additional $500,000 from our state lottery program. The additional $1.7 million will go a long way this year in assisting Nebraska students.

43. NEVADA & NEW HAMPSHIRE • Nothing Submitted

44. NEW JERSEY - I For FY2006, Acting Governor Codey proposed a $9.3 million increase in funding to $211.9 million for the need-based Tuition Aid Grant Program. If approved by the Legislature, this funding will provide recipients with awards up to the full cost of tuition charged in academic year 2004-05. Recommended funding for the Part-Time TAG Program for County Colleges is $4.5 million, which is nearly a 6% increase.

45. NEW JERSEY - II Acting Governor Codey's budget also includes $8 million in funding for the NJ STARS Program, which provides merit awards to eligible students who graduate in the top 20% of their high school class and attend a NJ county college. This program, implemented in 2004-05, covers the cost of tuition and approved fees for up to 15 credits per term, after applying other federal and state grant and scholarship aid.

46. NEW JERSEY - III Among the new initiatives recommended is $3.5 million to implement a Loan Forgiveness for Mental Health Workers Program, which will assist mental health workers to pay off their student loans.

47. NEW MEXICO • Nothing submitted

48. NEW YORK - I Program Summary. For the 2005-06 academic year, the legislature maintained all current statutory provisions, which is estimated to provide more than 385,000 students with more than $900 million in need-based grants, ranging from $500 to $5,000 for dependent undergraduate students. The state budget also preserves language giving HESC the fiscal flexibility to defer up to 30 percent of payments into the second quarter of the following fiscal year (August 1st). As of now, full-time undergraduate tuitions at the 4-year units of the State and City Universities of New York are unchanged for the 2005-06 academic year.

49. NEW YORK - II New Scholarship and Loan Forgiveness Programs: • New York State Nursing Faculty Scholarship Program • New York State Nursing Faculty Loan Forgiveness Incentive Program • Regents Licensed Social Worker Loan Forgiveness Award Program

50. NEW YORK - III • HESC E-Commerce Initiatives: • “Anytime TAP on the Web” • HESC has processed over 229,000 applications for the 2005-06 academic year (84% electronic) • About half of all online TAP applicants have used the direct link from the online FAFSA to TAP on the Web. • The other half of online applicants have responded to either the email, postcard or the Web address included with the paper TAP application, signed onto the HESC Web site, created a PIN, and applied using Anytime TAP on the Web.