Nancy P' Goldschmidt, Associate Vice Provost Oregon Health

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Nancy P. Goldschmidt, Associate Vice
Provost Oregon Health Science University
David A. Longanecker, Executive Director
Western Interstate Commission on Higher
Education 24th Annual Student Financial Aid
Research Network ConferencePortland, OR June
21, 2007
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Why Change Was Necessary In Oregon

• The Standard Rationale Wasnt Working
• Linkage between state support of institutions,
  tuition, and financial aid was out of sync
• Support for Financial Aid was stagnant
• The New Concept fits Oregon well
• Process was as important as product
• Impetus came not from financial aid community,
  but from OUS and Governor
• Took their time, and included all stakeholders

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Oregon's grant program falls short of meeting
needs

• Community college tuition rose 99 in 10 yrs.
• OUS tuition represents 8.5 of MFI, double
  tuition paid 30 yrs ago.
• 600,000 Oregonians "16 years old or older" not in
  high school, never enrolled in postsecondary
• Eligible students not using the state grants.

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Source U.S. Census Bureau. 2005 American
Community Survey.
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Differences in College Attainment (Associate and
Higher) Between Young and Older Adults, 2000
Source Organization of Economic Cooperation and
Development, American Community Survey
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Oregon is going backwards Demand for skilled
workers cannot continue to outpace supply
Source Postsecondary Education OPPORTUNITY, July
2006 Issue calculates chance for college as high
school graduation rate times college continuation
rate by age 19.
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• Oregon's grant program falls short of meeting
  needs
• Eligibility threshold dropped below Pell
  eligibility
• Covers 11 of the Cost of Attendance
• Grant amount based on institution cost

Arbitrary - Not Compelling - Lacks Passion
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Affordability gap created by current financial
aid policy
enroll part-time
borrow
work
work
go part year
delay starting
Source Oregon Shared Responsibility Simulation,
created for the AAWG by Western Interstate
Commission for Higher Education, 2006
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(No Transcript)
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Oregon students are already working to afford
college.
Source U.S. Department of Education, National
Center for Education Statistics, 200304
National Postsecondary Student Aid Study
(NPSAS04).
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A better strategy for winning in the global market

• The governor's workforce agenda will build an
  economy that is strong and fair by investing in
  our most valuable asset Oregon's people.

Source US Census, American Community Survey, 2005
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What we did....

• AAWG built on broader set of discussions
• Changed paradigm for student financial aid
• Secured substantial new general fund support

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How we did it....

• Leadership
• Governor's Vision
• Appointed new Chair and reconstituted Board in
  Nov 2003
• Selected leadership for AAWG in Jan 2004
• Held first AAWG meeting in March 2004
• AAWG Membership
• Business and community leaders
• All education sectors at the table
• In-state resource experts/stakeholders
  (non-voting)
• Timing
• Did not happen over night

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• What leadership believed ...
• State's college financial aid system is
  insufficient, antiquated and opaque
• Personal resources should not be a barrier
• Global economy requires educated workforce
• Innovative change needed
• What leadership wanted..
• Expand student financial aid to middle-income
• Modernize delivery of grants and student loans
• Hold institutions accountable for student access
  and success

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How we did it...

• Encouraged different perspectives
• Used experts
• Identified principles
• Developed messages

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Design principles
Fairness All students invest in their own
futures, regardless of family income. Equity
Reduce disproportionate cost burden of a
college education Grant size based on "need"
not institution cost Reduce disparity between
independent and dependent students Choice
Grants follow the authorized students to
eligible Oregon institutions. Efficiency
Leverage the Pell Grant and educational tax
credits first. Encourage other philanthropic
partners.
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Design principles
Predictability Today's students can count on
being able to afford to go. Earning 1 over
threshold does not jeopardize eligibility Stabili
ty/Flexibility State grant adjusts to changes
in Pell Grant and income tax credit, attendance
cost, and Oregon minimum wage. State maintains
effort in support of public institutions to keep
public college cost increases down. Transparency
Helps families/students plan and understand
financial aid packaging before they set foot on
campus.
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• Policy Components
• of the
• Shared Responsibility Model

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Cost of Attendance - Tuition Fees - Books,
supplies tools - Modest living expenses
State Share- Fill the gap
Step 4
Step 3
Federal Share- Pell Grant tax Credits
Family Share- Income Assets
Step 2
Step 1
Student Share- Work, loans, savings, scholarships
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• Student share can be any combination of

Even students with no resources will be able to
work their way through college again, as
generations of students did before them.
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The new allocation model

• Replaces income eligibility cliff with slope
• Extends eligibility to middle-income students
• Allows community college students to work their
  way through college.
• Doubles average size of need-based grant
• Yields new enrollments
• Provides equity among grant recipients

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Once again, the "before"

Source Oregon Shared Responsibility Simulation,
created for the AAWG by Western Interstate
Commission for Higher Education, 2006
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SRM Public 4-year universities
Using "upside down thinking"
ELIGIBLE 4-YEAR INSTITUTION 2005-06 Recognized
Student Budget for Full-time Student Total
Recognized Price 14,859
Source Oregon Shared Responsibility Simulation,
created for the AAWG by Western Interstate
Commission for Higher Education, 2006. Chart
reflects fully funded model, pending legislative
approval.
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Demands/Supports Financial Aid Officers

• Philosophical
• Optimistic
• Uncomfortable breaking with traditions
• Turf issues
• No merit consideration
• Overly complicated and burdensome
• Flat grant easier to understand and administer
• Requires FAOs to know things they don't know

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Demands/Supports External Community

• Works with, not against, Oregon's culture
• Establishes a reciprocal responsibility
• Students should contribute substantially
• Messages and principles resonated with
  legislators
• Establishes state as last contributor
• Uses hydraulics based on economic indicators
• Viewed as "good buy"

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Demands/Supports Legislators

• What does it take to make college affordable?
• How much is enough money?
• Trust
• Communication

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Emerging Issues

• Using grant to urge students to attend
  institutions with excess capacity
• Predicting program cost
• Linking to high school diploma changes
• Ensuring student success

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Pell Grants Awarded at Oregon Institutions in
2003-04
Percent of Students
US Average 28
Note Percentage of the total unduplicated
12-month undergraduate enrollments in 2003-04 as
reported on the FISAP. Calculated as the number
of Pell grants divided by the 12-month enrollment
reported in the FISAP. Source The Institute for
College Access and Success. Economic Diversity of
Colleges. Retrieved on 08/01/2006, from
http//www.economicdiversity.org
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• 110 million in Governor's Budget for 2007-2009
• Compared to 2005-2007 spending level of 60
  million (funded at 78 million but under-spent).
• Biennial roll-up costs
• 142 million if pick-up rate remains the same
• 149 million if pick-up rate increases 5
• 223 million if all eligible FAFSA filers attend
  college

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• Endorsements
• Oregon State Board of Higher Education
• Oregon State Board of Education
• Oregon Student Assistance Commission
• Oregon Community College Association
• Oregon Student Association
• Presidents Council, Oregon Independent College
  Association
• Presidents Council, Oregon Community Colleges
• Presidents' Council, Oregon University System
• Senate Bill 334
• Introduced by Senator Kurt Schrader

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Summary

• The Standard Rationale Wasnt Working
• Linkage between state support of institutions,
  tuition, and financial aid was out of sync
• Support for Financial Aid was stagnant
• The New Concept fits Oregon well
• Process was as important as product
• Impetus came not from financial aid community,
  but from OUS and Governor
• Took their time, and included all stakeholders

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Behind the DeckExamples
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• Economic Model Updates
• Minimum Wage projected to be 8.10
• Pell Grant maximum increased to 4,700
• Public tuition/fees increased 3.4 per yr
• Student expenses increased 3.1 per yr
• Part-time work expectation at 25 hrs per wk

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Oregon Community Colleges Historical Enrollment
A long historical upward trend in community
college enrollments, peaking in 2001-02, has
reversed in subsequent years with reductions in
community college funding.  The most dramatic
(14.2) drop occurred in 2003-04 and enrollment
has not yet rebounded.  In 2002-02 community
colleges served 406,434 students.  In 2005-06
community colleges served 357,511students.
Source OCCWD October 2006
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Oregon Independent Colleges Historical Enrollment
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Projected Shared Responsibility Impact Full-time
Freshman
If presently a student at a private
institution, old grant is maintained.
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Projected Shared Responsibility Impact Part-time
Freshman