WIA

Financing Higher Education for Adult Learners

March 18, 2010 Ruthie Liberman, Vice President of Public Policy Crittenton Women’s Union 617) 259-2933 [email protected]

The WorkforceSolutions Group

Mass Public Higher Ed – who can afford it?

 Mass ranks 44 out of 50 for affordable tuition & fees for 4-year public colleges; 38 th for 2 year colleges  Mass ranks 32 of 50 states in total grant dollars per population age 18-24  1988-2008 Mass Grant funding declined by 53%

Isn’t Community Practically Free?

Earners in lowest 20% income bracket must pay 63% of income for net cost of community college 80% 70% 60% 50% 40% 30% 20% 10% 0%

Percentage of Income Required by Earners in the Lowest 20% Income Level to Attend Public Two and Four Year Colleges (2007-2008) 63% 49% 74% 55%

MA National Average Public Two Year College Public Four Year College

Type of Institution

Workers who study – additional challenges

• Top reason for dropping out of college – too hard to work and go to school at same time >50% college drop-outs have incomes < $35,000.

• Fed & State financial aid formulas designed for traditional students • Most grant and federal loans favor those who study half-time or more

More Financial Aid Shortfalls

for adult learners • Most aid restricted to credit-bearing or degree programs (not certificate programs) • Pell Grant is capped at 18 semesters • Mass Grant not available to those less than part time • Neither Pell nor Mass Grant can be used for living expenses.

• Most low-income students have unmet needs after Pell and Mass Grant

Educational Rewards Grant

• Created in 2006 to aid low-income students, especially part-time students, seeking education leading to jobs in high-demand occupations • $1.5M allocation is now expended. No grants awarded next academic year without a new appropriation • Unlike other grants up to 30% may be used for living expenses such as transportation and childcare • Students receive between $200 and $3000 for high demand fields including healthcare, engineering, computer specialists, construction/production; life science technician; administrative support; and personal care and service (for a full list see www.osfa.mass.edu/edrewards ) • Grants can be used for tuition, fees, and books for degree and certificate programs

Who do the grants serve?

• Dislocated workers or individuals whose income is at or below 200% of the federal poverty level • 666 students received the grant over the since fall 2007 • 86% were female – Applicants studied 47 different majors at more than 45 MA institutions (mostly for-profit vocational schools) – 70% of the grants were awarded in health professions (medical assistant, nursing, LPN, radiology technician, dental assistant, etc.) – Nearly 80% of recipients used the grant for a certificate program

Future Improvements to ERG

• Worker’s Pathways to SS calls for Supports for Success Pilot – $1.5M pilot to offset the costs to community college of providing intensive supports to ERG recipients.

– Supports include intensive advising and counseling, college and career success courses, private work study opportunities, child care and transportation, case management.

• Limit grant to public higher education – 71% grants awarded to students at for-profit vocational schools • Raise income limit above 200% FPL

WA State Opportunity Grant

• The Opportunity Grant program created in 2006 assists low-income students enroll in college for training in high-wage, high-demand career pathways (jobs with minimum wage of $13.00). Goal is to reach tipping point & beyond • Available at 34 WA State community and technical colleges or 8 approved private career colleges • Students receive funds for tuition and fees and up to $1,000 additional for books, supplies, or tools for up to 45 credits • Colleges are awarded $1,500 per grant recipient to promote student success. Most colleges hire a Opportunity Grant Coordinator to coordinate services such as student success classes, tutoring, counseling, retention strategies, and emergency childcare, transportation, and other emergent student costs.

Opportunity Grant Outcomes

• OG recipients had a higher retention/completion rate of 81% as compared to 73% of all Pell grant recipients enrolled in same programs • Even bigger gap between OG and those with no aid

Pell Grants

• Largest federal needs based program • Foundation for financial aid packages • ARRA provided good increases Pre-ARRA 2008-2009=$4,731 2009-2010=$5,355 2010-2011= $5,555 • Obama proposes 2011-2012=$5,710 & move appropriation to mandatory side of budget

SAFRA/ American Graduation Initiative

• Ends the federal subsidies of private loans and shifts all student loans to the Federal Direct Loan program. Savings estimated at $87B over 10 years would be applied to broad range of programs and policies, including: – Pell grant and Perkins loans program increases – Significant new funds for community college success initiatives – Early childhood education – School infrastructure • Pell grant maximum awards would be increased and tied to the Consumer price index • May be taken up in same budget reconciliation bill as health care reform. Intense opposition from lending industry may significantly weaken or kill the measure.