Transcript American Recovery and Reinvestment Act of 2009

American Recovery and
Reinvestment Act of 2009
What and What Next for Higher Education
Paul E. Lingenfelter, President
State Higher Education Executive Officers
Recessions have a lasting impact
on higher education
Enrollment grows faster
State and local funding
cannot keep pace with enrollment demand
Tuition and fees grow faster
Access to knowledge, skills, and training
becomes increasingly expensive when
people need it most.
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Educational Appropriations per FTE (constant $)
Net Tuition Revenue per FTE (constant $)
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
$7,044
$7,003
$6,760
$6,438
$6,533
$6,994
$7,544
$10,000
$3,223
$3,302
$3,993
$3,936
$3,839
$3,673
10.0
$3,245
$3,233
$3,468
$12,000
$3,335
$3,337
$3,325
$3,293
$3,181
$3,098
$2,997
$2,824
$2,617
$2,536
$2,480
$2,431
$2,367
$2,304
$2,210
$2,113
$1,986
12.0
6.0
$6,000
2.0
$2,000
$-
Source: SHEEO SHEF Early Release
Dollars per FTE
$7,819
$7,814
$7,744
$7,558
$7,341
$7,109
$7,028
$6,801
$6,720
$6,975
$7,397
$7,608
$7,653
$7,767
$7,771
$7,635
$7,269
4.0
1985
$6,517
$6,477
8.0
1984
1983
Public FTE Enrollment
Recoveries have not been strong
enough to mitigate the cost shift
Total Educational Revenue per FTE, U.S. Public Sector
$8,000
$4,000
Public FTE Enrollment (millions)
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Current outlook predicts a dreary
forecast
• 47 states face budget shortfalls totaling $350
billion
(Center on Budget and Policy Priorities)
• Many states now cutting spending and draining all
reserves and resources
• Downturn and tighter budgets expected for next 25 years
• Early estimates show enrollment demand
continues to grow
• Higher education typically cut more than other
areas of state budgets
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American Recovery and
Reinvestment Act of 2009
$787 billion
($100+ billion for education/training/R&D)
Select items impacting higher education…
• State Fiscal Stabilization Fund
• Student financial assistance
• WIA programs
• State longitudinal data systems
• Research and development
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$53.6 billion to stabilize
state and local funding
State Fiscal Stabilization Fund
$40.1 billion
–
To restore state funding deficiencies for fiscal years
2009, 2010, 2011 to the greater of either FY2008 or
FY2009 funding levels in the state’s K-12 and higher
education funding formulas (higher education
institutions can use funds for education and general
expenditures to mitigate tuition increases and/or
modernize, renovate, or repair facilities used for
instruction, research or student housing)
$8.2 billion
–
Governors to spend on high priority needs (can
include public colleges and school districts)
$5.01 billion
–
Reserved for the Secretary of Education ($4.35 billion
for State Incentive Grants and $650 million for Innovation
Fund and $14 million for admin/oversight)
$268 million
–
To restore state funding deficiencies in education for
outlying areas
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Update on state fiscal stabilization
funds
• Governors must apply for stabilization
funds
• Application and guidance available on
U.S. Department of Education website
• 48 states, D.C., and Puerto Rico have
completed and submitted applications
• 40 states, D.C., and Puerto Rico have
been approved to receive funds
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Allocation plans of state fiscal
stabilization funds by state
Education Stabilization Funds (Minimum of 81.8%)
Percent of Funds Allocated to Higher Education
0-10%
CT, DC, IL,
MD, MI, ND,
NE, NH, NJ,
NM, NY, WI
11-20%
21-30%
31-40%
41-50%
51%+
ID, IN, ME,
NC, WA
CA, FL, GA,
HI, IA, KS,
MS, OR, PR,
RI, UT, WV
AL, MA, MN,
NV, SC, SD,
VA
AZ, CO, OH
AR, TN
On average, states are spending the majority of their Educational
Stabilization Funds to complete FY 2008-09 and on FY 2009-10 with less
than 10% available for FY 2010-11.
The notable exception is Alaska, which does not propose to spend these
funds in either FY09 or FY10.
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Allocation plans of state fiscal
stabilization funds by state
Other Government Services Funds (Maximum of 18.2%)
Percent of Funds Used for Specific Purposes
0-20%
21-40%
41-60%
61-80%
Public Safety
AR, IA, MA, ND,
OH, VA
PR
MD, WI
K-12 (Non-capital)
AR, CO, DC, ID,
ND, NJ, NY, SC
WV
MA, MN, PR, WI
Public IHEs (Noncapital)
AR, CO, IA, ND,
NJ, NY, WV
HI, IL, MD
MN, MS, OH
K-12 (Capital)
AR, MN, WV
IHEs (Capital)
MN, VA
Medicaid
Public Assistance
Transportation
Other
Undetermined
81-100%
AL, CA, GA, KS, NC,
NE, RI, SC, SD, WA
HI, IL, TN
AR
CT
ND
IA, MS, TN
MD, NM, OH
IA
IA, OH
ID
AR, CT, IA, ND,
NH, PR, WI
ID, OH, SC
CO, DC, MS, VA,
WV
AR, AL, WI
ID, IA, MA, TN, UT
CO, DC, VA
NY, UT
AK, AZ
FL, IN, ME, NH, NJ,
NM, NV, OR
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Tourniquet, not a transfusion
State stabilization funds will help us:
• Buy time
• Manage a short-term crisis
• Build a foundation for dealing with
some fundamental problems
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Post-stimulus: “Low-Gap” scenario
Gaps could approximate 4% of spending ($70 billion)
Source: NCHEMS using Don Boyd (Rockefeller Institute of Government), 2009.
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Post-stimulus: “High-Gap” scenario
Gaps could approach 7% of spending ($120 billion)
Source: NCHEMS using Don Boyd (Rockefeller Institute of Government), 2009.
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Maryland
Maine
Vermont
New Jersey
Connecticut
New
Rhode Island
North Dakota
Wisconsin
Massachusett
Michigan
Wyoming
California
Ohio
Delaware
Kansas
Oregon
Virginia
New York
Minnesota
West Virginia
Pennsylvania
Illinois
Alaska
Nebraska
Montana
United States
Louisiana
Indiana
Hawaii
Oklahoma
New Mexico
Missouri
Kentucky
Iowa
South Dakota
Washington
Florida
South Carolina
Arkansas
Georgia
Colorado
Tennessee
North Carolina
Idaho
Utah
Arizona
Nevada
Alabama
Texas
Mississippi
Projected state & local budget surplus
(gap) as a percent of revenues, 2016
0
-12
Source: NCHEMS; Don Boyd (Rockefeller Institute of Government), 2009.
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Using the stimulus to prevent lasting
damage and create lasting value
And so tonight, I ask every American to commit to at least
one year or more of higher education or career training.
This can be community college or a four-year school;
vocational training or an apprenticeship. But whatever the
training may be, every American will need to get more than
a high school diploma…. By 2020, America will once again
have the highest proportion of college graduates in the
world.
President Barack Obama, February 24, 2009
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So, where do we stand in the world
today?
Other industrialized nations are educating their
young adult workers to record levels…
52%
51%
…while the U.S. stands still.
48%
40%
40%
40% 40%
33%
Canada
Japan
17%
18%
Korea
Ireland
Age 45-54 with associate degree or higher
Source: OECD (2007). Education at a glance.
U.S.
Age 25-34 with associate degree or higher
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To match leading nations 55% of U.S. adults
must attain some college degree by 2025, but…
60.0%
By 2025, the U.S. will fall 16 million degrees short
of this attainment rate if we fail to increase
college degree production above the current rate.
55.0%
50.0%
40.0%
41.9%
37.4%
30.0%
20.0%
10.0%
0.0%
Current Percentage of
Adults Age 25-64 with
College Degrees, 2005
Projected Percentage in
2025 with Current Annual
Degree Production
Source: National Center for Higher Education Management Systems (2007). Adding It Up. Boulder: NCHEMS.
Percentage Needed to
Reach Best-Performing
Countries
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Two essential steps…
The United States must:
– Continue to attract
talent from abroad
7 million more
degrees by 2025
– Increase degree
production
16 million more
degrees by 2025
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Additional degrees needed to become
the most educated country by 2020
• 1.3 million degrees Added through projected population growth
• 4.3 million degrees Resulting from increasing high school
graduation rates, college-going rates of recent high school
graduates, and postsecondary graduation rates
• 4.2 million degrees Added by having half of the 8.4 million young
U.S. adults (aged 25-34) with some college complete a degree
• 2.6 million degrees Added by having a third of the 8.8 million
slightly older U.S. adults (aged 35-44) with some college
complete a degree
• 3.4 million degrees Added by having fifteen percent of the 22.7
million adults (aged 25-44) who have completed high school,
but not attended college, complete a degree
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What will it take for the U.S. to lead the world
in postsecondary educational attainment?
• Improving high school graduation rates
(68% to 78%)
• Improving postsecondary enrollment rates
(55% to 65%)
• Improving postsecondary graduation rates
(2-yr: 30% to 40% and 4-yr: 60% to 70%)
• Encouraging and enabling adults with some
college or just a high school diploma to
complete a postsecondary credential
(10.4 million degrees from adults aged 25-44)
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…with no compromise on quality
• Students who complete high school must be
ready for college or employment without the need
for remedial instruction
• Students who complete postsecondary degrees
and certificates must have the knowledge and
skills necessary to be productive workers and
citizens
• Citizens must have the capacity, opportunity, and
motivation to improve continuously their
knowledge and skills throughout life
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What federal actions will make a
difference?
• Reinforce and repeat the President’s
articulation of the national imperative
• Fund appropriate federal initiatives
• Promote state leadership, creativity, and
commitment
• Provide information and ideas
• Assist states in identifying their needs and
mobilizing their own resources
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What state actions will make a
difference?
• Establish clear, concrete goals for higher
rates of educational attainment
• Promote, assist, and insist on institutional
practices that assure the assessment and
improvement of student learning
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What state actions will make a
difference?
• Establish budgetary policies and
practices that emphasize student
success, efficiency, and productivity
• Provide need-based student financial
assistance designed to grow in lock-step
with tuition and enrollment increases
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What state actions will make a
difference?
• Develop clear standards of “college
ready” and assessments of learning in
high school
• Improve both K-12 and postsecondary
teaching capacity
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What state actions will make a
difference?
• Promote practices that encourage
postsecondary participation and success
of working adult learners
• Encourage the implementation of
successful developmental education
strategies
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Increasing educational attainment
through a state/federal partnership
The federal government could provide state
grants to encourage states to designate or
create Citizen's Commissions on College
Access and Completion to:
• Establish state goals, strategies, and
metrics
• Involve all key constituents
• Implement and use a solid data system
• Analyze strategies, monitor results, and
continuously improve
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Increasing educational attainment
through a state/federal partnership
With these grants, the federal government
should:
• Give states flexibility in implementation
• Measure rigorously the results of
initiatives
• Structure the federal matches to decline
over time
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Contact information:
Paul Lingenfelter
President
SHEEO
(303) 541-1605
[email protected]
SHEEO, the national association of state-wide higher education executives, focuses
on public policy for higher education in the U.S. It was founded in 1954.
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