Transcript Slide 1

OpportunityTexas™
nd
College Access, Success, & the 82
Legislature
RAISE Texas Summit
Federal Reserve Bank of Dallas
November 2, 2011
Don Baylor, Jr. ([email protected])
Senior Policy Analyst, Economic Opportunity
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“Balancing” the 2012-13 State Budget
Cuts to 2012-13 Budget:
$7 billion
General
Revenue
Shortfall
of $23
billion
(at least $5.3 b to PreK-12)
Medicaid “I.O.U”: $5 billion
Accounting tricks: $3 billion
Federal EduJobs: $831 million
(after use of
Rainy Day Fund
for 2011, plus
other 2011
revenue not in
January
estimate)
GR-Dedicated Balances: $4.9 billion
Revised 2012-13 estimate: $1.2 billion
Nontax revenue: $125 million (net)
Cuts to 2011 Budget: $1.4 billion
The Texas State Budget for 2012-13
Biennial Total: $175 billion
(6% below 2010-11; 15% below current services)
Federally funded = shown in white;
other areas are General Revenue,
GR-Dedicated, & “Other” State Funds.
Prisons 3%
Highways 8%
HHS
13%
HHS 18%
Higher
Education 13%
Federal 32%
PreK-12
6%
PreK-12,
16%
Highway 4%
Other
7%
Property tax
cut 8%
Other federal 4%
Source: Legislative Budget Board, HB 1 and HB 4, May 2011.
Includes $2.3 billion delayed Foundation School Program payment.
Public School Grants Eliminated from
State Budget for 2012-13
Pre-Kindergarten Early Start ● High School
Completion/ Success ● Science Lab Funding ● Texas
Reading, Math and Science Initiatives ● Tuition Credit
Program (Early High School Graduation) ● Extended
Year Programs ● Teen Parenting Program ● Middle
School Physical Education and Fitness Programs ●
LEP Student Success Initiative ● Disciplinary
Alternative Education Programs (Safe Schools) ● Rural
School Technology ● School-Based Prevention
Services ●
School Improvement/Parental Involvement AVANCE ●
Arts Education ● Science and Math Outreach ●
One Community One Child
College Access & Completion Areas
of Focus
Financial
Aid
Career & Skills
Development
College Savings
&
(Grants, Loans,
Work-Study)
Postsecondary
Access
Financial Prep
Developmental
Education
Reform
K-16 Financial
Education &
Capability
& Success
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College Access & Completion
Program and Policy Recommendations
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Financial Aid
Index state funding for need-based grant aid to student population growth
Create and fund an early commitment financial aid program for economically
disadvantaged elementary and high school students
College Savings
Improve outreach and marketing of the Texas Save & Match program and 529 plans
Connect financial education to a college savings product
Support and promote VITA programs that connect low-income families with college
savings products
Financial Planning & Screening
Integrate college financial preparation into the financial aid curriculum in public schools
Promote awareness and Access to planning and screening tools such as the FAFSA4Caster
and Net Price Calculators
Integrate FAFSA preparation activities at public schools, colleges and VITA sites
Developmental Education
Improve developmental education assessment policies at community colleges
Reform the design and delivery of developmental education courses to better target
student needs
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Higher Education Partners
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Higher Educational Attainment
Drives Better Employment and…
Unemployment Rate Lower for Texans
with Higher Educational Attainment 2010
13.0%
9.0%
7.5%
4.4%
Less than high
school
High school
Some college
Bachelor's or
higher
Source: CPPP Analysis, Economic Policy Institute analysis of Current Population Survey data, 2011
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…More Income
Median Hourly Wages Higher for by
Texans with Educational Attainment
(2010)
$23.40
$9.86
Less than high
school
$12.29
High school
$14.05
Some college
Bachelor's or
higher
Source: CPPP Analysis, Economic Policy Institute analysis of Current Population Survey data, 2011
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Children are nearly three times more likely to emerge
from poverty as adults if they complete college.
A College Degree Helps Poor Children Get Ahead
(Children in Bottom Quartile)
100%
80%
60%
5%
9%
18%
23%
Percent Adult Children with
Income in Top Quintile
22%
Percent Adult Children with
Income in Fourth Quintile
21%
40%
20%
19%
22%
45%
16%
0%
Without a College Degree
With a College Degree
Percent Adult Children with
Income in Middle Quintile
Percent Adult Children with
Income in Second Quintile
Percent Adult Children with
Income in Bottom Quintile
Source: Brookings Tabulations of PSID Data, Isaacs, Sawhill& Haskings, February 2008, Children in the Bottom Income Quartile
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Financial Barriers to College
Access
 Families overestimate college costs
 Uncertainty over financing college decreases a student’s
likelihood of college enrollment
 Grant aid funding lagging behind enrollment growth
and student need
 Low- and moderate-income students are less likely to be
enrolled in college savings plans
 FAFSA application is difficult to navigate
 1 in 5 Texas students do not complete the FAFSA because
they do not know how to apply
 1 in 5 Texas students do not apply for financial aid because
the process is too time-consuming
 58% of Texas students do not complete the FAFSA because
they believe they are ineligible for financial aid
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Texas Grant Aid Investments Lag Behind
Other States
Source: CPPP Analysis, National Center for Public Policy and Higher Education, Measuring Up 2008
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Millions ($)
TEXAS Grants Cut by 10% in 201213 (Nominal Dollars)
$430
$325
$361
$622
$559
106,000
Students Served 77,000
Students Served
$267
2002-03
2004-05
2006-07
2008-09
2010-11
2012-13
Source: CPPP Analysis, Texas Higher Education Coordinating Board & General Appropriations Act 2001-2011
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Student Loans are Primary Source
of “Financial Aid”
Loans Make Up the Majority of Financial Aid for Texas
College Students
% of Students
Receiving Aid
Income
<$60,000
Income >=
$60,000
% Loans
Basic Needy Student
72%
92%
8%
49%
$1.979B
Needy Student
Using Aid to Replace
Family Contribution
28%
42%
58%
75%
$1.765B
Source: CPPP Analysis, Texas Higher Education Coordinating Board, 2009
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Despite Federal & State Grants, Lower-Income
Students Face Higher Unmet Need
$10,000
$9,000
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
4-year Institutions
2-year Institutions
$0
0-100%
$0
101-200%
201-300%
301-400%
Income as Percent of Poverty Line
$0
$0
401% +
Source: CPPP Analysis of National Postsecondary Student Aid Study of 2008, NCES Powerstats
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Source: CPPP Analysis, Texas Higher Education Coordinating Board, Report on Student Financial Aid in Texas Higher Education, FY
2009
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Low-income families cover a higher percentage of
college costs through financial aid, but…
100%
90%
80%
Total Costs = $15,009
Unmet Need,
32%
Total Costs = $17,708
Total Family
Contribution
70%
60%
50%
40%
EFC, 8%
Total Family
Contribution
EFC, 74%
Loans, 28%
30%
20%
10%
Grants, 32%
Loans, 16%
Grants, 10%
0%
0-200%
200% +
Income as Percent of Poverty Line
Source: CPPP Analysis of National Postsecondary Student Aid Study of 2008, NCES Powerstats
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Total family contributions as a proportion of income are greater
for low-income families compared to higher-income families
100%
90%
80%
70%
60%
50%
40%
30%
20%
Unmet Need
10%
0%
47% of annual
income spent
on college costs
EFC
EFC
17% of annual
income spent
on college costs
0-200%
201% +
Income as Percent of Poverty Line
Source: CPPP Analysis of National Postsecondary Student Aid Study of 2008, NCES Powerstats
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Enrollment at Texas Two-Year Public Institutions
Grows at Twice the Rate of Four-Year Institutions
(2005-2010)
Two-Year Institutions
Four-Year Institutions
Independent
1600
1.5 M
1400
184K
12%
Thousands
1200
1.2 M
153K
13%
578K
38%
1000
800
501K
41%
600
400
200
743K
49%
566K
46%
0
2005
2006
2007
2008
2009
2010
Source: CPPP Analysis, Texas Higher Education Coordinating Board, 2011
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Doing More With Less - 2012-13 Budget
Texas Community Colleges
Instructional
Formula Funds
2010-11 & 2012-13
Number of Contact
Hours
2010-11 & 2012-13
312M
$1.84M
Annual
Appropriations per
Contact Hour 2010-11
& 2012-13
$3.56
-5.8%
-5.8%
+20.4%
$1.74M
259M
Source: CPPP Analysis, Texas Association of Community Colleges
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-21.8%
$2.78
82nd
Legislature Session Summary, July 2011
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2012-13 Budget
Financial Aid & Post-Secondary Training
State
Financial Aid
Programs
Skills
Development
Fund
$1B
Jobs and
Education for
Texans Grant
Program
$81M
$15M
-40.1%
-100%
-5.8%
-15%
$879M
$48.5M
Source: CPPP Analysis, Texas Association of Community Colleges
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$0
82nd
Legislature Session Summary, July 2011
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New Laws Strengthen Higher Education
 SB 851 – Uniform deadline for financial aid applications
 HB 2910 – Establishes grant program for higher education
institutions to partner with non-profit institutions to
improve degree completion rates
 HB9 - Outcomes-Based Funding bases a portion of higher
education funding on specific student success measures,
including graduation/completion rates
 HB 1244/SB1564 – Developmental Education Assessment
and Curriculum Reforms
 SB 162 – Developmental Education Plan for
Underprepared Students
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2011 Policy
Accomplishments
New Laws Improve Texas’ financial capability and college
savings
 SB 290 (Watson)—expands mandatory financial literacy
into statewide K-8 curricula and assessment platforms
 HB 34 (Branch)—builds on current financial literacy
requirement (12th grade economics) to include:
 Instruction on paying for postsecondary education and
training
 Instruction on completing the FAFSA
 Curricula to be finalized for 2013-2014 academic year
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Policy Accomplishments
(continued)
 HB 2594 (Truitt)—Payday and Auto Title Lending Reform Licensing
Bill creates Texas Financial Education Endowment to fund initiatives
such as:
 “school and youth-based financial literacy and capability”;
 “advertising, marketing, and public awareness campaigns to
improve the credit profiles and credit scores of consumers in this
state”;
 HB 399 (Castro)—requires universities to make available training on
personal financial literacy (e.g. credit cards, loan repayment,
retirement planning, budgeting, saving)
 HB 3708 (Hochberg)—improves Save & Match program by
eliminating college savings penalties (financial aid, public benefits)
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Upcoming Work
 Engage New Stakeholders
 Monitor rulemaking for HB 3708 (Texas
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
Save & Match) @ Texas Prepaid Higher
Education Tuition Board
Participate in rulemaking for HB 2594
(Texas Financial Education
Endowment) @ Texas Finance
Commission
Pursue K-12 Financial Education
Implementation @ Texas Education
Agency (HB 34/SB 290)
CPPP to release review of Texas Financial
Aid programs and policies
Perform Analysis of Local-Level Student
Loan Data
Acquire and analyze local-level FAFSA
completion figures
Develop College Readiness “Scorecard”
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Ways to Get Involved, Be Informed
 Payday and Auto Title Lending: Stop
the Cycle of Debt
(www.stoppaydayabuse.org)
 State Revenue: Balanced
Budget=Balanced Approach
(www.texasforward.org)
 Savings, Asset Building, & Financial
Success (www.raisetexas.org)
 Issues Affecting Low- and ModerateIncome Texans (www.cppp.org)
 Creating Good Jobs, Increasing
Income, & Promoting Savings
(www.opportunitytexas.org)
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Laura Rosen
OpportunityTexas Coordinator
[email protected]
Don Baylor
Senior Policy Analyst, CPPP
[email protected]
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