OPBlog: Higher Ed Junction
On Thursday, the U.S. Supreme Court upheld University of Texas at Austin’s race-conscious admissions policy in its second consideration of a Fisher v. University of Texas appeal. As a reminder, the case stemmed from a lawsuit by Abigail Fisher, a white applicant to UT Austin who claimed she was unfairly rejected due to the university’s affirmative action admissions program. Since our last update, when the Supreme Court ordered the U.S. Court of Appeals for the Fifth Circuit to reconsider the case, the appellate court affirmed their decision in favor of UT, and Fisher again appealed that court’s decision to the Supreme Court. For additional background on this case, please see our previous two posts, found here and here.
The case was decided by an unusual 4-3 margin due to Justice Kagan’s recusal and the recent death of Justice Scalia. According to the NY Times, Justice Kennedy, who had never before voted to uphold an affirmative action plan, wrote for the majority that “…it remains an enduring challenge to our nation’s education system to reconcile the pursuit of diversity with the constitutional promise of equal treatment and dignity.”
This decision marks the end of the Fisher case, but the debate over affirmative action in higher education carries on.
Stay tuned to the OPBlog for updates.
Last week, the Economic and Revenue Forecast Council (ERFC) released its June revenue forecast, which increased projected General Fund-State (GF-S) collections by $294 million for the current 2015-17 biennium and by $126 million for the upcoming 2017-19 biennium. This is an improvement over the February forecast, which had predicted slower revenue growth in both biennia (see our blog post here). As a reminder, there will be at least three more revenue forecasts between now and when the legislature sets the 2017-19 budget.
Here is a quick summary of the total projected GF-S revenue for each biennia:
- $37.431 billion for the 2015-17 biennium, 11.2 percent more than 2013-15.
- $40.252 billion for the 2017-19 biennium, 7.5 percent more than 2015-17.
- $43.575 billion for the 2019-21 biennium, 8.3 percent more than 2017-19.
Behind the numbers:
- The forecast attributed the increase to strong sales of large commercial properties and rising home prices.
- Other positives included growth in housing permits and increases in inflation, which typically result in greater retail sales, business taxes, and property taxes.
- Slight decreases in U.S. and Washington state personal income forecasts continue to have a negative effect on the revenue forecast.
According to a press release from the Governor’s Office of Financial Management, “With the latest forecast, the state is now projected to have nearly $1.5 billion in total reserves at the end of the current biennium and more than $1.4 billion at the end of the 2017–19 biennium. Those reserve figures, however, do not take into account the multibillion obligation the state faces in the next biennium to meet its constitutional obligation to fully fund basic education.”
As a result, state agencies, including the UW, have received instructions to severely limit requests for new programs or policy initiatives in their requests for state funding in the 2017-19 biennium.
Stay tuned to the OPBlog for updates on revenue forecasts.
The estimated annual cost of attendance for first-year UW undergraduates is now available for the 2016-17 academic year. Cost of attendance shows estimated expenses by campus for:
- Student fees
- Room & board
- Books, personal, & transportation
Cost of attendance (COA) is defined by the Higher Education Act. It is a statutory term that typically refers to the estimated cost for a full-time student to attend an institution of higher education for a standard nine-month academic year.
After accounting for grant and scholarship aid, UW students (particularly resident undergraduates) often pay far less than the estimated COA. In 2014-15 (the most recent year for which net price data is available), the published price for resident undergraduates at Seattle was $27,112, whereas the net price for first-time, resident undergraduates at Seattle was $9,744.
We will annually update the COA information on our website.
OPB has posted a report on higher education trends from the past year to the Briefs tab of our website.
Based on The Chronicle of Higher Education’s Trends Report, the brief summarizes the ten trends outlined by The Chronicle and highlights relevant examples from Washington state. The brief also outlines a selection of additional higher education trends which we have observed.
OPB has posted two summaries concerning the 2016 legislative session to the Briefs tab of our website:
The 2016 Bill Summary lists the bills OPB tracked during session that were passed by the legislature. Links to veto messages are provided for bills that were vetoed or partially vetoed by the Governor. Of the nearly 600 bills that OPB tracked in the 2016 legislative session, 54 passed into law.
The 2016 Fiscal Note Summary lists the fiscal notes—evaluations of the fiscal impact of a bill proposal—that OPB completed on behalf of the UW (with the help of subject matter experts across the University) during the 2016 session. All fiscal notes are requested by the Office of Financial Management (OFM) in Olympia to guide legislative decision-making. This session, OPB completed 63 fiscal notes.
The Lincoln Project, the American Academy of Arts and Sciences’ study of public research universities (PRUs), has recently come out with its fifth and final report, which examines the challenges facing PRUs and recommends strategies for addressing them. The recommendations are threefold:
- Address Financial Challenges:
The sharp reduction in state funding for PRUs—down 30 percent since the year 2000—has been particularly harmful because it has forced public universities to raise tuition. This directly affects access for low-income students—one of the key responsibilities of public higher education. For this reason, the authors highlight financial aid for low-income, in-state undergraduate students as the most important program that institutions can provide. The UW’s Husky Promise program, which provides free tuition to resident undergraduates with financial need, is an example of this type of financial aid.
To cope with diminished state funding, the report also recommends:
- Regional alliances with other PRUs, allowing the schools to combine programs;
- Focusing fundraising on unrestricted donations, allowing universities to put the money towards core educational programs;
- State-led creation of PRU long-term funding plans, allowing universities to more securely plan for their future; and
- Advocating for additional federal research support.
- Form Public-Private Partnerships:
In the authors’ view, there is a natural alliance between PRUs and businesses. PRUs are critical to the business community: they educate workers and provide research upon which businesses and corporations build their enterprises. Universities also rely on businesses for funding assistance and for employment opportunities for their graduates. The report recommends that businesses provide research funds, well-paid internships, scholarships, and other support mechanisms for universities and their students. Universities, in turn, should provide easier access to their research and actively work towards partnering with businesses. The UW has a variety of public-private partnerships, including its Global Innovation Exchange (GIX), a partnership with Microsoft and Tsinghua University in Beijing.
- Serve Students:
- Simplify financial aid: Filling out a FAFSA is a complicated process which can impede access to higher education. Simplifying the loan application procedure would help ensure that a larger proportion of students who are interested in higher education get access to the funds they need to pursue their goals.
- Track student performance: Thanks to improved data analysis tools, universities have an enhanced ability to help students graduate. The report highlights Georgia State University (GSU) as a particularly successful example. GSU uses an algorithm to pinpoint students at risk of failing or dropping out, enabling the university’s advising services to intervene on a one-to-one basis. According to the report, these interventions have increased graduation rates by 20 percent, reduced time to graduation, and eliminated graduation rate differences between racial, ethnic, and socioeconomic groups.
- Improve transfer pathways: The report recommends that four-year institutions work with community colleges to simplify the transfer procedure. Doing so can make higher education more affordable and accessible and can help transfer students graduate with a four-year degree on time and with as little debt as possible.
Two overarching themes of the Lincoln Project’s report are partnerships and accessibility. Public universities will need both in order to continue fulfilling their dual missions of conducting top-level research and providing high-quality, affordable higher education.
On April 18, Governor Inslee signed the final compromise operating budget after vetoing several sections. One of the Governor’s vetoes reversed a plan to convert activities conducted by the Office of Financial Management (OFM) into a “central service.” As a result of the veto, the UW will no longer be billed approximately $2.03 million from tuition operating fee revenue to cover those services.
The rising costs of college are a popular subject for everyone from presidential candidates to media outlets. Parents and students blanche as published tuition prices climb ever higher. But the published price – often referred to as the “sticker price” for colleges – offers a misleading picture of the cost of higher education. OPB has updated our brief to reflect the newest available data on published price vs. net price. Highlights include:
- Sector-wide data on increases in published price and net price for public and private four-year colleges
- A description of how declining state investment in higher education has spurred tuition increases
- A table of the top 25 research universities’ net price for resident undergraduates receiving grant or scholarship aid
Our updated brief is accessible here.
The 2016 Legislature concluded its business having passed supplemental operating and capital budgets before the scheduled close of the 30-day special session. Please see the OPB brief for a detailed overview of the final compromise budgets.
While the compromise operating budget includes $3.513 million in additional biennial funding to “true up” the tuition backfill associated with 2ESB 5954, the increase is partially offset by more than $2 million in new, ongoing, biennial charges for services provided by the Office of Financial Management.
The compromise capital budget does not include any changes for the UW.
Over the past few months, income share agreements (ISAs) have received significant attention from political candidates, higher education advocates, and news sources. A new OPB brief takes a closer look at ISAs by:
- Exploring differences between and the history of privately funded ISAs and publicly funded ISAs (such as Pay It Forward).
- Comparing ISAs to federal income-based repayment (IBR) plans in terms of overall structure, years to repayment, monthly payments, and total cost over time.
- Identifying remaining issues regarding ISAs and their implementation.
- Offering alternatives like improving federal loan repayment options.
Please contact Jed Bradley if you have any questions.
The House and Senate did not come to an agreement on a 2016 supplemental budget by the end of the 60-day regular session, which was slated to end March 10. Several news outlets reported the tense ending, which featured Governor Inslee vetoing 27 bills (see examples here, here, and here). The Governor convened a 30-day special session, which began immediately.
On Friday, leadership in the Senate Ways & Means Committee released a new proposal for a 2016 supplemental operating budget (PSSB 6667). Last month, OPB released a brief comparing the Governor’s proposal, House proposal, and the Senate’s original proposal. That brief outlines the major components of each budget.
Like the Senate’s original proposal, this offer proposes $3.513 million in additional biennial funding to “true up” the tuition backfill associated with 2ESB 5954. However, both Senate proposals would almost entirely negate this additional backfill funding by converting activities conducted by the Office of Financial Management (OFM) into a central service charged to state agencies. Over the biennium, the UW would be charged $1.252 million from its state general fund appropriation and $2.042 million from tuition operating fee revenue for these OFM central services, a total of $3.294 million.
This proposal differs from the original Senate proposal in that it:
- Does not cut WWAMI: The original proposal included a cut of $1.2 million
- Does not fund a proviso for youth suicide prevention at UW’s Forefront: The original proposal allocated $97,000 in FY17 to fund 2SSB 6243, but that bill did not pass the House.
- Shifts $18 million in cost savings from College Bound (CB) program to State Need Grant (SNG): The original proposal shifted only $14 million, effectively cutting SNG by $4.5 million.
During a press conference responding to this release, leadership in the House emphasized continuing negotiations toward a compromised budget and gave no indication that they would release a public budget offer.
Stay tuned to the OPBlog for updates on proposed budgets.
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