Council for Education Policy, Research and Improvement Council for Education Policy, Research and Improvement Changing Directions Project Lumina Foundation & WICHE Grant SHEEO/NCES March 31, 2004 Washington, DC

About the Grant Florida is one of five states in the first round Changing Direction – will focus on how legislators and other policymakers can improve financial aid and financing policy practice to help more high school students go to college and succeed. Overall objective – Develop new models and define best practices for integrating tuition, financial aid and appropriations policies in ways that encourage student participation and degree completion.

Trends in Student Financial Aid and College Pricing 1 st comprehensive look at all sources of student aid – Context for future aid/tuition/funding deliberations – State aid <10% of total $4billion received by Florida students of this aid, 20% is strictly need- based – Among the 10 largest states, Florida is ranked 9 th in need- based aid awarded and number 1 in non need-based aid Source: NASSGAP2001 Survey

Focus Units of analysis: – Sectors, not individual institutions. – Financial aid programs, not individual awards. – Report data in both current and constant dollars, to promote accurate interpretation of trends, controlling for the variable purchasing power of the dollar over time Comparisons nationally and to peer states

Purpose A comprehensive accounting of student financial aid trends in Florida. Complete inventory of direct aid to students, from all sources, at all types of institutions: – 2-year and 4-year – Public and independent – nonprofit and for-profit. 5 – year look to span periods of growth and decline in state and national economies.

Contracting Legislature requested the Council to address this area – Issues identified tie directly to the impetus of the Lumina/WICHE Grant.

University Contracts UF/FSU proposed a 5-year contract between the Legislature and them during the 2003 Session In response, the 2003 Legislature directed CEPRI to study the feasibility of 5-year contracts between the State and public universities

From Concept to Innovation A contractual approach could provide the opportunity to: – Have a cohesive plan for the university system – Define the mission of each university – Ensure regional and state priorities are being met – Directly link performance with funding

Recommendations Regarding Performance Expectations Individual university contracts would have some measures in common; others would vary according to mission. Performance Expectations would address: – Priorities of the State – Assisting students to stay on track and reduce time to degree – Student access and graduation – Containing student costs – Feedback from students and employers – Maintaining accreditation

Recommendations Regarding Incentives and Penalties Within the Legislative framework: Ability to set tuition should be the reward for performance. This authority must be tied to maintaining access to quality education for all high-performing students regardless of financial status Development of plans for corrective action are required when performance standards are not met Authority to set fees is lost if performance does not meet standards on critical measures in one year The Board of Governors provides annual review and control over tuition and access through the contract negotiated with the university

The Taxpayers Share: Florida Tuition & Tax Revenue in Comparison to Top 5 Public Universities

Per Capita Degree Production vs. Student Cost: Florida vs. Ten States with Highest Tuition * Bachelor’s Degrees per 100K Population, Public and Private Institutions

Tuition Policy as a Tool for Providing Access Reducing Time to Degree – Block Tuition Schedule to Encourage Larger Course Loads – Use of Tuition Revenues to Expand Course Availability Use of Tuition Revenues for Need Based Aid Expand Cooperative Education Opportunities Improved Counseling and Career Planning

Tuition Is Not the Main Cost of College Three years of 10% increases is a 3.4% increase in total cost 4 Year Cost

Additional Cost of Extra 1 ½ Years to Degree with No Fee Increase

Conclusion Contract approach would close the gap between mission, performance, and funding Contract could be a vehicle for defining state goals and encouraging universities to meet them Council strongly believes this approach should be embraced and utilized

We Must Do Better Moving Florida’s State University System to the next level in quality and accessibility A collaborative effort spearheaded by the Florida Council of 100 with pro bono support from McKinsey & Company, and CEPRI Again, a direct tie to the Lumina priorities

The Flow of Funding for Florida’s Higher Education System Recommendations Increase funding of need-based aid from $80 million to $243 million by to ensure availability of funds for students in financial need. Increase the total cost of attending college by 3% per year for the next 5 years, by increasing tuition and fees at 13.9% per year to reach national average tuition and fee levels.

Recommendations (cont.) Make the Bright Futures Scholarship Program a true merit program. In , increase the minimum SAT requirements for – Academic Scholars: 1270 to 1330 – Bright Futures Medallion Scholars: 970 to Increase the financial aid available to students attending Florida’s private schools to $120 million from today’s level of $80 million. Increase the Education and General (E&G) budget (appropriations plus tuition) per State University System full- time-equivalent (FTE) student to $17,008. Accrue approximately $101 million in funds each year beginning in to ensure that all of Florida’s existing pre- paid college tuition contracts sold are honored, and re-price new contracts appropriately.

What’s Next for Second year of Florida’s involvement in Changing Direction Student Progression Cohort Analysis – Council has followed Florida high school graduates to determine the factor(s) that mattered the most to degree attainment – The Lumina/WICHE support will allow for an update to the cohort analysis with subsequent inclusion of financial aid variables in the Council’s Web Analysis Tool – Follow up on action taken related to above studies Studies and Web Tool available at