Background Information on Affordability Issues February 9, 2007

Tuition and Fees

Indiana Public Institution Full-Time Hoosier Undergraduate Tuition and Required Fees Effective Fall Average 10-yr Annual Rate Increase Rate Increase INDIANA UNIVERSITY Bloomington$3, %$7, % East$2, %$5, % Kokomo$2, %$5, % Northwest$2, %$5, % South Bend$2, %$5, % Southeast$2, %$5, % IUPUI$3, %$6, % PURDUE UNIVERSITY West Lafayette$3, %$7, % Calumet$2, %$5, % North Central$2, %$5, % IUPU Ft. Wayne$3, %$6, % Consumer Price Index (CPI - fiscal year, est.) % %

Indiana Public Institution Full-Time Hoosier Undergraduate Tuition and Required Fees Effective Fall Average 10-yr Annual Rate Increase Rate Increase Indiana State University$3, %$6, % Univ. of Southern Indiana$2, %$4, % Ball State University$3, %$6, % Vincennes University (Fr/Soph)$2, %$3, % Ivy Tech Community College of Ind.$1, %$2, % Consumer Price Index (CPI - fiscal year, est.) % % Source: Indiana Commission for Higher Education.

Ten-Year Weighted Average, First-Time Entry Source for National and Midwest: College Board, 2006 Trends in College Pricing Avg. Annual rateΔ%rateIncrease National 2-year$1, %$2,1825.1% 4-year$2, %$5,4926.9% Midwest 2-year$2, %$3,3553.6% 4-year$3, %$6,5955.9% Indiana 2-year$1, %$2,7193.5% 4-year$3, %$6,0477.2%

T&F as % of Median Family Income Source: U.S. Census Bureau, U.S. Dept. of HHS

State Appropriations for Higher Education

Higher Education Operating Appropriations University Operating University Line Items Debt Service SSACI Programs Other Programs OPERATING TOTAL $497,343$18,946$34,488$24,301$5,220$580, $743,321$15,650$64,018$42,868$12,185$878, $824,587$25,365$79,401$60,491$13,603$1,003, $1,025,422$37,903$104,776$103,733$18,657$1,290, $1,138,602$37,691$110,240$188,243$15,472$1,490, $1,185,266$37,094$131,149$218,431$16,367$1,588,307 CHANGES THROUGH to %-1.6%19.0%16.0%5.8%6.6% to %-2.1%25.2%110.6%-12.3%23.1% to %46.2%65.2%261.1%20.3%58.3% to %137.0%104.9%409.5%34.3%80.9% to %95.8%280.3%798.9%213.6%173.7% $ in thousands

Total Expenditures and State Share

Total Expenditures Sources: State Budget Agency As-Passed Books, Institutional Biennial Budget Requests Income I Δ% IUB$287.0$340.6$431.1$565.1$ % IUPUI Health$94.4$110.4$128.8$144.4$ % IUPUI Gen Acad$104.5$122.1$157.1$215.2$ % PU WL$312.2$362.0$462.5$614.7$ % ISU$91.4$99.8$111.9$131.4$ % USI$24.1$34.9$50.5$65.6$ % BSU$151.0$173.0$200.4$228.9$ % VU$38.4$42.9$45.7$56.9$ % ITCCI$87.6$108.2$148.4$226.9$ % TOTAL$1,357.8$1,599.1$1,981.8$2,564.8$2, % CPI43.0% HEPI67.8%

State Operating Appropriations Source: State Budget Agency As-Passed Books. In millions of dollars Δ% IUB$146.7$159.0$181.4$195.3$ % IUPUI Health$77.8$84.7$96.3$100.3$ % IUPUI Gen Acad$59.8$63.1$80.7$ % PU WL$178.4$191.9$224.9$240.2$ % ISU$63.5$68.0$76.7$78.9$ % USI$14.1$19.9$28.8$33.7$ % BSU$96.8$105.1$117.6$124.9$ % VU$22.1$27.0$29.8$35.9$ % ITCCI$55.7$69.4$93.0$128.5$ % TOTAL$807.1$902.1$1,063.9$1,176.1$1, % CPI43.0% HEPI67.8%

Gross Unrestricted Fees Source: Institutional Biennial Budget Requests, Income I Δ% IUB$140.3$181.6$249.7$369.8$ % IUPUI Health$16.6$25.7$32.5$44.1$ % IUPUI Gen Acad$44.7$59.0$76.5$124.8$ % PU WL$133.8$170.1$237.7$374.6$ % ISU$27.9$31.8$35.3$52.4$ % USI$10.1$15.0$21.7$31.9$ % BSU$54.2$67.9$82.8$104.1$ % VU$16.3$16.0$15.9$21.0$ % ITCCI$31.9$38.8$55.5$98.3$ % TOTAL$550.7$697.0$918.0$1,388.7$1, % CPI43.0% HEPI67.8%

FTE and HEPI Adjusted Revenues and Expenditures, to

Change in State and Family Share of Education Expenditures FY1995 to FY2005 Source: Indiana Commission for Higher Education.

Fall Headcount Enrollment in Indiana Postsecondary Institutions Total 346,378 Public 266,790 Private* 79,588 Source: Annual Editions of Report of Enrollment in Indiana Colleges and Universities, prepared for the Indiana Association of Collegiate Registrars and Admissions Officers. Independent Colleges of Indiana. Commission for Higher Education Student Information System. *Awaiting update

Financial Aid

Sources of Aid Grants –Federal, State, Institutional, Private Loans –Federal, Private, Subsidized, Unsubsidized, PLUS Work Study

Federal Grants The maximum Pell Grant for is $4,050 The average Pell Grant was $2,230 The median expected family contribution (EFC) of Pell Grant recipients in was $53; for non-recipients, EFC was $8,282 The median family income of Pell recipients in was $15,098; for non-recipients, median family income was $49,475 On average, the maximum Pell award in 2003 covered 68% of COA at CCs, 41% at public 4-year institutions, and 16% at private, not- for-profit 4-year institutions Pell Grant recipients who completed a degree in borrowed a median of $17,430, or $2,000 more than the median for all undergrads 2003 Status Report on the Pell Grant Program, American Council on Education; College Board

State Grants Primary grant program is Higher Education Award/Freedom of Choice (Frank O’Bannon Award) Other large programs are 21 st Century Scholars and Children of Disabled Vets, et al. Mean awards for were*: –$3,303 for all students –$3,089 for public 4-year students –$5,515 for independent, not-for-profit 4-yr students –$1,270 for public 2-year students The SSACI budget is increasing much faster than any other portion of the state’s higher education budget – nearly 800% since 1985 compared to 140% for university operating *Source: SSACI annual report

Institutional Grants Merit-based and need-based –Over the past decade, the percentage of full- time undergrads at 4-year colleges receiving institutional aid increased –Over the same period, there was a notable increase in the percentage of undergrads in the highest income quartile who received institutional aid, especially between and * What Colleges Contribute: Institutional Aid to Full-Time Undergraduates Attending 4-Year Colleges and Universities, National Center for Education Statistics, 2003

Institutional Grant Aid to Resident Undergraduates ($76.5M) Source: Indiana’s postsecondary institutions

Institutional Grant Aid to Non- Resident Undergraduates ($51.4M) Source: Indiana’s postsecondary institutions

Loans Subsidized Stafford Loans Perkins Loans Other Repayable Loans Unsubsidized Stafford Loans PLUS (Parent) Private Lenders

Borrowing: Average Student Loan Debt of Graduating Resident UGs Who Borrowed Source: 2004 Institutional Performance Indicators Submission

Private and federal student loan volume, and % Increase 86% Increase Note: Private sector loans do not include state sponsored non-federal loans; constant dollars calculated using Consumer Price Index. Source: College Board, Trends in Student Aid.

Conclusions

Good News and Bad News State appropriations for higher education are increasing, but not fast enough counteract inflation and enrollment growth The inflation-adjusted value of today’s maximum Pell grant is below its value in State grants increased with tuition and fees up to FY03, but are now stalled and falling far behind actual T&F at some institutions

Good News and Bad News Institutional grant aid continues to increase, but much is directed toward upper-middle- and high- income students The net price (cost of attendance minus all grant aid and loans) was still far in excess of the expected family contribution for most low-income students and many middle-income students* *What Students Pay for College: Change in Net Price and College Attendance Between and , National Center for Education Statistics, 2002

Effects on Students Longer time to degree as students work more hours More loans, including more private (non-federal) loans parent loans and credit card debt Low-income students are increasingly shifting to 2-year institutions* Financial barriers are estimated to prevent 48% of qualified high school graduates from attending 4- yr colleges and 22% from attending 2-yr colleges** *”Pell Grant Students in Undergraduate Enrollments by Institutional Type and Control, to ,” Postsecondary Education Opportunity, December 2003 ** Empty Promises: The Myth of College Access in America, A Report of the Advisory Committee on Student Financial Assistance, 2002

Bachelor’s Degree Attainment by Age 24 by Family Income Quartile, 2005 Bottom Quartile12.3% Second Quartile16.6% Third Quartile27.9% Top Quartile72.6% Note: National representation. Source: “Family Income and Higher Education Opportunity, 1970 to 2005.” Postsecondary Education Opportunity, December 2006.

2004 Taskforce: Points of Consensus Public Process of Setting Tuition and Fees Tuition and Fee Guidelines – Set fees for 2 years at a time Financial Aid: Continue to Support SSACI and Institutional Aid to SSACI Eligible Students Four Year Degree Completion Incentives Part-Time Grant Program Should be Improved Ensure More Students Graduate with Core 40 Degree Increase Undergraduate Enrollment at Community College

Recent Actions Related to Recommendations from the 2004 Taskforce on College Affordability Indiana’s colleges instituted a process of notifying the public of proposed tuition and fee increases and holding public hearings Indiana’s colleges set tuition for two years at a time (in-line with the state’s biennial budget) Indiana made the Core 40 curriculum the default high school curriculum for all students Indiana aligned its financial aid policy with Indiana’s Core 40 curriculum CHE proposed an incentive to increase time-to-degree Community college system has been expanded statewide