Bad grades spur Alaska Senate inquiry on colleges

Alaska’s higher education institutions received two failing grades on a performance report card released in September 2004, according to an independent, nonpartisan organization that evaluates higher education institutions. In response, the Alaska Senate’s Committee on University Oversight heard testimony Feb. 28 concerning ways to improve education in the state.

The National Center for Public Policy and Higher Education gave Alaska a failing grade for affordability, one of six categories on which Alaska colleges were graded. Alaska also received an “F” in completion – the rate at which students graduate college in a timely manner.

Every state received an incomplete grade for learning, because the group thought that more data was needed to assess the category.

Julie Bell, a representative from the National Council of State Legislatures, reviewed the results with the committee via teleconference from Denver while discussing national trends in higher education to give its members a more complete picture of how to interpret the data.

“Tuition is increasing significantly, in part as a response to decreased state budgets for higher education,” Bell said. “More students are borrowing more money – almost 64 percent of bachelor’s degree recipients now have to borrow something to pay for college.”

The affordability category compares the average cost of attending college with the amount of financial aid that the state makes available to students, and factors in residents’ income levels.

“The average tuition and fees for public four-year school in Alaska, it’s $4,600 and the nationwide average is $4,900,” said Sen. Con Bunde, R-Anchorage. “So our tuition is lower, but you feel our affordability is less too-what we’re talking about then is above and beyond tuition – it’s cost of living. We’re always going to get an “F” because it costs more to live up here.”

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Of Alaskans in the lowest income bracket of $15,726 per year, the net cost of college – tuition, room and board minus financial aid – was $7,918, or nearly 50 percent of their yearly income in 2004.

The richest Alaskans – those making more than $127,730 – in contrast, paid $8,083, or about 7 percent of their income.

“I would say (the high percent of income required) is a significant barrier, and I think that absolutely (Alaska’s) got generous programs, but a lot of those families will not take loans and can’t afford loans,” Bell said. “I think what impacts that population more than loans is need-based financial aid.”

The sharp contrast in percent of income required for college has prompted the board of regents, Gov. Frank Murkowski and state legislators in recent weeks to propose programs to create more need-based aid for lower-income Alaskans, including the regents’ grant program approved Feb. 16, which would provide $1.8 million to students in need.

The grant would distribute $800 per year to approximately 2,200 students – about 10 percent of the net cost of education in 2004, when the report card was issued.

However, tuition has increased every year since 2004, with another scheduled for this fall. And, UAA student regent Jacob Gondek said an 8 percent increase in fiscal year 2008 is being considered. If approved, tuition will have risen 44 percent during a four-year period.

The rapidly increasing cost of tuition is leaving some students wondering whether financial aid will actually help increase college affordability for lower-income families.

USUAA’s administrative secretary, Chelsea Harshbarger, said she thought Alaska schools were relatively affordable compared with other states, but the increases in tuition are coming too rapidly.

“I think it’s a little too much too fast,” Harshbarger said. “I think increases are OK, but not in that condensed amount of time. It’s a little financially shocking to students to do it that close together.”

Harshbarger said she thinks the tuition increases are minimizing the impact that the need-based aid programs have on lower-income students and that the two seem to be working against each other.

“It actually doesn’t make a lot of sense – if you’re going to be doing needs-based funding, you better make it worth their while beyond what your increase is,” she said.

Kate Ripley, director of public affairs for UA statewide, said there are numerous factors influencing the rising costs of education in Alaska, including increases in energy costs, salary increases and rising healthcare and retirement costs for employees. She said president Mark Hamilton is expected to release a tuition increase proposal in April, although she could not confirm the 8 percent increase Gondek said was under consideration for 2008.

Although she acknowledged that tuition increases can work to minimize the benefits of financial aid, she said the increases are necessary and that, while not enough, some assistance is better than nothing.

“If there were no program, and they weren’t getting $800 assistance, then that would be $800 more that they’d have to pay, plus the increase in tuition,” Ripley said. “They’re getting nothing now – there’s nothing now for needs-based that (UA is) providing, and they would be getting something with the new program.”

Ripley said the source of funding for the need-based grant hasn’t yet been determined. The proposed tuition increase in fiscal year 2008 is not a part of the regents’ four-year plan for tuition increases that ended with the 10 percent increase announced last year, she said, but was unrelated to the creation of the need-based grant program.

“We are going to redirect some existing financial aid – that’s being looked at right now – and then shuffling some internal funding priorities,” Ripley said. “The fact is that what students pay for tuition doesn’t even cover the costs right now.”

Saichi Oba, assistant vice president of student and enrollment services, said after the third 10 percent increase in tuition that will take effect in fiscal year 2007, UA will still be mid-priced compared to other similar sized universities. Other need-based programs are available to students in Alaska, he said, which helps to increase affordability for lower-income students.

“As we keep increasing our tuition, our ability to raise it will sort of be minimized eventually, but then that’s the reason that you try to look at financial aid programs for those students who just can’t afford school,” Oba said.

The Alaska Commission on Post-Secondary Education currently gives out nearly $680,000 from the Alaska Advantage Grant, Oba said, and Gov. Murkowski is seeking to restructure its investments in a way that would generate another $1 million per year in need-based aid.

Additionally, House Bill 340, which is undergoing review in the Legislature, proposes a “Two Percent for Tuition” tax on oil revenue that would generate revenue for need-based aid. Federal assistance could also become available under the Leveraging Educational Assistance Partnership Program, which could provide up to $1.7 million in need-based assistance.

The report card also gave Alaska a “B” for preparation – measuring how ready high-school students are for college – a “C” for participation – whether all residents have an equal opportunity to get a higher education – and a “B” for benefits – the returns that the state gets back from investing in higher education.