Funding Texas Higher Education

1 Funding Texas Higher EducationPresentation for theHouse Appropriations Subcommittee on EducationFebruary 19, 2009 Funding Texas Higher EducationState FundingFinancial Aid2 THECBS tate Funding for Texas Higher Education3 THECBA lthough Texas has made substantial investments in Higher Education , students are paying a larger share of the cost22%40%24%14%27%13%25%35%StateStudent sInstitutionsFederal GovFY 2003FY 2008 Public Universities4 THECBS tatewide averages mask fundamental differences among the institutions Institutions differ in their missions, level of research, focus on teaching reliance on state Funding ability to raise external Funding capacity to use tuition and fees to make up Funding shortfalls5 THECBT here are big differences among institutions with different missions18%25%38%19%16%16%9%59%StateStud entsInstitutionsFederal GovUT -AustinA&M International Total Operating Sources:$2,124,875,764 Total Operating Sources:$87,781,498FY 20086 THECBT here are differences among universities with similar missions26%35%18%21%39%8%18%35%StateStud entsInstitutionsFederal GovUT-El PasoUniversity of North Texas Total Operating Sources:$300,818,977 Total Operating Sources.

2 $486,523,099FY 20087 THECBA lthough Texas has made substantial investments in community colleges, students and local taxpayers are paying a larger share of the cost20%31%25%24%23%22%29%26%StateStudent sLocal TaxesInstitutionalFY 2003FY 2008 Community Colleges8 THECBFY 2008 Although Texas makes a substantial investment in health-related institutions, most of their Funding comes from sources other than the state1%12%18%52%18%11%StateStudentsInsti tutionsFederal GovHosp., Clinics, Prof. Fees1%FY 200549%1%12%18%20%Health-Related Institutions9 THECB$4,331 $4,191 $4,030 $4,195 $4,030 $3,916 $4,226 $4,869 $5,228 $5,486 $5,820 $5,989 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 200320042005200620072008 Public UniversitiesFormula FundingTuition & Mandatory FeesIncreased costs are being paid by students instead of general revenueNOTE.

3 In Constant Dollars, CPI-U (Per Full-time Enrolled Student)10 THECBS tate support is below national average$7,057$6,595$5,641$5,640$5,493$5, 353$5,301$4,945$4,454$4,352$0$1,000$2,00 0$3,000$4,000$5,000$6,000$7,000$8,000 North CarolinaNew YorkFloridaNationCaliforniaPennsylvaniaT exasIllinoisMichiganOhioPer Full Time Student EquivalentState Appropriations for General Operating ExpensesFY 2006 Source: State Higher Education Executive Officers11 THECBT exas 4-year institutions meet or exceed the national average for tuition, while community colleges remain relatively inexpensive2007-08 Tuition & Required Fees ( Texas vs. National Average)Source: Washington Higher Education Coordinating Board, 2007-2008 Tuition and Fee Rates: A NationalComparison, March Household IncomeTexasNational$47,548$50,740 Source.

4 Census Bureau, 200712 THECBD espite increases in faculty salaries, Texas universities still lag behind the national average NationalSalaries(AllRanks)10-State AverageTexasFY 2003$69,565$62,671FY 2008$79,596$74,076%increase14%18% Texas universities have added 1,175 full-time equivalent faculty memberssince FY 2003 a 10 percent increase13 THECBF ormula Funding Recommendations14 THECB Formulas equitably allocate -not budget -available funds among institutions Appropriations are made on a lump-sum basis, rather than by line item Except for a few items like debt service and benefit pay, institutions may spend their appropriated funds for any legal purpose without regard to the method by which the amount of Funding was are used for allocating -not budgeting -a base amount of funds15 THECBF ormula Funding Recommendations for Universities16 THECBC oordinating Board Recommendations for Universities Significantly increase base formula Funding by $300 million Phase-in of completedcredit hours over 4 years.

5 Contingent on a minimum increase in base formula Funding to ensure that no institution receives less Funding than 2008-09 (estimated at $20 million over the current House base of $ million) Convert teaching supplement to performancebased Funding Increase Funding of infrastructureto cover actual costs for educational and general space17 THECBP erformance FundingAllocated to institutions for degrees awarded based on three-year average: Rewards all degrees and certificates regardless of timeframe achieved or where student originated Encourages institutions to bolster retention and advising programs to assure educational outcomes Funded via formula Funding appropriationsRecommended Appropriation for 2010-11: General Academic Teaching Institutions: $178 million Community and Technical Colleges.

6 $100 million18 THECBR ecommendations for Universities (Increaseover 2008-2009 biennium)RecommendationCoordinating BoardIncrease in Instruction & Operations Formula$300 millionPerformance Funding $178 millionInfrastructure$ millionTotal$ million19 THECBS ummary of Coordinating BoardRecommendations for Universities Recommended Biennial Total:$ billionOverall change from 2008-2009 biennium: $ million20 THECBF ormula Funding Recommendations for Community Colleges21 THECBS ummary of Coordinating BoardRecommendations for CCs Significantly increase base Funding by $ million to fund the formula at 100% of the median cost level minus tuition and fees Phase-in completedcontact hours over 4 years contingent on a minimum Funding increase over base formula Funding to ensure that no institution receives less Funding than 2008-09 $ million for performance based Funding $ million in trusteed Funding for alternative teacher certification programs $ million in small institution supplement Funding $30 million trusteed for developmental Education

7 Funding22 THECBR ecommendations for Community Colleges(Increaseover 2008-2009 biennium)RecommendationCoordinating BoardIncrease in Formula$ millionPerformance Funding $ millionDevelopmental Ed$30 millionSmall Institution Supplement$ millionAlternative Teacher Certification$ millionTotal$ million23 THECBP roposed biennial total: $ billionOverall increase from 2008-2009 biennium: $ millionSummary of Coordinating BoardRecommendations for CCs24 THECBF ormula Funding Recommendations for Health-Related Institutions25 THECBR ecommendations for Health-Related Institutions Restore Funding rates to 2000-01 biennial levels Phase-in the restoration by increasing the rates to one-half of the difference between the 2008-09 and 2000-01 Funding levels In 2012-13 biennium.

8 Restore 100% of the 2000-01 Funding levels26 THECBR ecommendationInstruction & Operations Formula$ millionResearch Enhancement Formula$ millionMission Specific Formula$ millionInfrastructure Formula$ millionGraduate Medical Education Formula$ millionTotal --Formulas$ millionNursing Shortage (All Sectors Eligible)$ millionCoordinating Board Recommendations Health-Related Institutions (Increaseover 2008-2009 biennium)27 THECBP roposed biennial total: $ billionOverall increase from 2008-2009 biennium: $ millionSummary of Coordinating BoardRecommendations for Health-Related Institutions28 THECBF inancial Aid29 THECBHow does a student pay for college?

9 Grants & Special Programs: Federal and State Grants Institutional Aid Private Scholarships Work-Study Loans: FFELP Direct Lending Plus Loans State Loans Private LoansStudent/Parent Resources 30 THECB Texas has invested more than $ billion in state financial aid, including this biennium. During this time period, Texas created Texas Grants, TEOG and the B-on-Time Loan Program. Texas created several tuition set-aside programs that also fund financial 2000, Texas has made substantial investments in financial aid to improve access to Higher education31 THECBEven with unprecedented investment, aid is not keeping pace with growth in population & cost Large numbers of eligible students do not have access to our major grant programs.

10 Estimates for the current biennium show that: Only about 50%of eligible Texas Grant recipients will receive an award (~ 82,000 students). Less than 4%of eligible TEOG Grant (2-year colleges) recipients will receive an award (~ 8,000 students). Funding all eligible students under these programs with financial need would cost an additional $ billion this FY 07 to FY 08, institutional aid increased by 3% while state aid decreased by 1%Inst12%Other7%State8%Federal 73%FY2007 Inst15%Other7%State7%Federal 71%FY2008 TEXAS33 THECBFrom FY07 to FY08, there was a slight increase in the percentage of students getting grants and a slight decrease in the percentage of students who took out loansLoan60%Grant39%Work-Study1%FY 2007 Loan58%Grant41%Work-Study1%FY 2008 TEXAS34 THECBM ajor Financial Aid ProgramsFY 2008 StudentsFundingAverage AwardPellGrants346,932$911,482,112$2,627 Texas Grants54,448$199,640.