Roads, Rubber and Hits

1
Roads, Rubber and Hits

• a Perspective on the Current State of Higher
  Education and the Public Fisc
• Presentation in Abstentia
• by Jonathan Brown
• President, AICCU and
• Chair, Ed Fund Board of Directors
• May 24,2004

2
Budget problems abound

• In California the Administration has proposed to
  reduce the number of spaces for the public sector
  and to drastically reduce the maximum award for
  students in the independent sector.
• There have been outside proposals to eliminated
  the state guarantee agency model.

3

• The final California budget will recognize the
  contributions of higher education
• The proposed reductions in student aid will be
  substantially restored but,
• Fees in the public sector will be higher.
• Funding growth in future years will be slowed.
• That is a trend that is likely to be repeated in
  many states.

4

• At the same time the Administration is pursing a
  comprehensive review of state policies and
  programs. Among the proposals that have been
  discussed
• Forcing all direct loan schools back into FFEL
• Eliminating the state guarantee agency model.
• I believe that, when these proposals are
  considered, they will be rejected, as they should
  be.

5

• Ed Fund has amassed a phenomenal record of
  accomplishments.
• Grown the fund balance to significant levels -
  more than 15 fold since its founding.
• Provided more than 50 million of benefits to the
  state and students in the last 3 years
• Increased guarantees to almost 7 billion
  annually.
• Lowered the default rate significantly.

6
For California,the imperative is clearmaintain
our leadership in higher education or lose

• The states five sectors of growth depend on an
  educated workforce.
• Computers
• Biotechnology
• Professional Services
• Foreign Trade
• Entertainment

7
Some thoughts for all of us...

• Higher Education no longer has a free ride. We
  need to be able to explain both our finances and
  our processes more clearly.
• Things like Sarbanes-Oxley and Student Right to
  Know are part of a much larger movement. Ignore
  them at your peril.

8

• We need to think about how to present ourselves
  to all our publics.
• Higher Educational Institutions need to think
  about new kinds of collaborations among
  themselves and with others.
• But providers to higher education are under the
  same kind of mandate.

9
Concluding Thoughts

• In the coming years, public higher education will
  become less funded from government.
• Student Aid is likely to become more important
  (Colorado, the California Entitlement).