Interim Joint Committee on Education


Minutes of the<MeetNo1> 2nd Meeting

of the 2005 Interim


<MeetMDY1> July 18, 2005


The<MeetNo2> second meeting of the Interim Joint Committee on Education was held on<Day> Monday,<MeetMDY2> July 18, 2005, at<MeetTime> 1:00 PM, in<Room> Room 131 of the Capitol Annex. Senator Ken Winters, Co-Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Ken Winters, Co-Chair; Representative Frank Rasche, Co-Chair; Senators Walter Blevins Jr, Dan Kelly, Alice Kerr, Vernie McGaha, Tim Shaughnessy, Gary Tapp, and Johnny Ray Turner; Representatives Hubert Collins, Jim DeCesare, Jon Draud, Ted "Teddy" Edmonds, C B Embry Jr, Bill Farmer, Derrick Graham, Mary Harper, Mary Lou Marzian, Reginald K Meeks, Charles Miller, Harry Moberly Jr, Russ Mobley, Tom Riner, Terry Shelton, Charles L Siler, Arnold Simpson, and Addia Wuchner.


Guests: Mr. Clyde Caudill, Kentucky Association of School Administrators and Jefferson County Public Schools.


LRC Staff: Audrey Carr, Sandy Deaton, Jonathan Lowe, Janet Stevens, and Lisa Moore.


Representative Collins made a motion to approve the minutes, and Representative Miller seconded the motion. The motion was approved by voice vote.


Senator Winters asked the co-chairs for a report from the subcommittee meetings. Representative Edmonds said the Subcommittee on Elementary and Secondary Education meeting focused on the work of the Kentucky Center for School Safety. The center established by House Bill 330 in 1998 provides technical assistance relating to improving the culture and climate of schools and maintains statewide data that is to be reported annually to the Interim Joint Committee on Education. Mr. John Akers, Executive Director, Center for School Safety, explained how the center is organized, shared highlights of the most annual report, and gave an overview of the services provided to local schools and school districts. He introduced the center staff members, local school district staff, and other partners who shared promising practices in programs that are being used in schools across the state.


Representative Marzian said the Subcommittee on Postsecondary Education met and  heard a presentation regarding the availability of childcare for students, faculty, and staff on public postsecondary campuses in Kentucky. Dr. Kim Townley, Director of the Department of Education's Division of Early Childhood Development provided an overview of the history and issues relating to on-campus child care. Dr. Townley described the different types of programs, which can have different degrees of emphasis on teaching, research, and service. Dr. Elizabeth Farley, Director of the Division of Child Care in the Cabinet for Health and Family Services, discussed the availability of subsidies for income eligible students.


Representative Marzian said in the second part of the meeting, representatives from Eastern Kentucky University, the University of Louisville, the University of Kentucky, and the Kentucky Community and Technical College System described on-campus child care programs on their campuses, or plans to develop programs. The representatives also discussed barriers to access by students and parents, the greatest of which is the cost of providing high-quality care.


Senator Winters introduced Mr. Tom Layzell, President, Council on Postsecondary Education (CPE); Dr. John B. Lee, President, JBL Associates, Inc.; Dr. David Breneman, Dean, Curry School of Education, University of Virginia; Dr. David Longanecker, Executive Director, Western Interstate Commission for Higher Education; and Dr. Scott Swail, President, Educational Policy Institute.


Mr. Layzell said college affordability is of utmost importance to CPE's ability to achieve the goals that the legislature has set forth in House and Senate Bill 1. He knows there has been concern in recent years about double digit tuition increases, and whether or not the postsecondary institutions are pricing Kentuckians out of opportunities for postsecondary education.


Mr. Layzell said CPE took action in May 2005 to change the tuition setting process back to a process where they will take a more affirmative role in the determination of tuition policy. He said Kentucky is also part of a national project called "The Changing Directions Project" that seeks to determine the best policies for aligning tuition, financial aid, and funding.


Dr. Lee described the purpose of the Kentucky Affordability Study and reported preliminary results. He referred members to the Power Point presentation handout located in their folders. Dr. Lee said affordability includes three components. They are: 1) The student's and his or her family's ability to pay for college; 2) Tuition and other costs associated with attending college; and 3) The amount of financial aid that is available to students.


Dr. Lee said one problem is there is no agreed upon measure of affordability. There are several options to review. They are: 1) Could a student work part-time to pay the costs (maximum of $5,000); 2) Net price as a percent of family income, generally between 20 percent and 30 percent as a maximum; and 3) Unmet need; price of attendance after grants and family contribution have been considered.


Dr. Lee explained the process used for conducting the affordability study. He said the data from the Fall of 2004 was provided by the financial aid offices of participating institutions. He said only Kentucky residents are included, and income groups for dependent and independent students by type of institutions. He also said income is only available for students who applied for aid; most part-time students do not apply, so they are not included.


Dr. Lee said there were several things the project did not include. These were: 1) Including financial aid in the form of tax credits or savings; 2) Analyzing changes in price that could induce more students to enroll; 3) Evaluating the effect of student aid on persistence; and 4) Including part-time students. He said these issues will be addressed in the review of background research.


Dr. Lee explained the flow of funds in the public two-year, four-year, and private institutions. He provided background information on the full and part-time enrollment in Kentucky by institutional type. The majority of the part-time students are enrolled in the community colleges, while most full-time students are enrolled in the public four-year universities. He also explained the student income groups and their income and median quartiles, as well as expected family contributions. All of the charts are located in the official meeting folder in the Legislative Research Commission library.


Dr. Lee discussed grant and scholarship assistance. He explained the number of students receiving state grants in public two- and four-year universities, and private institutions. He explained the average loan amount by institution, and the type of loans received by student income status. He also discussed the price of attendance in public two- and four-year universities, and private institutions. All of the charts are located in the official meeting folder in the Legislative Research Commission library.


Dr. Lee said by most measures, Kentucky higher education is affordable. There are two exceptions: 1) independent students in the lowest income group pay the highest net price; and 2) dependent students in the lowest income quartile in four-year public or private institutions are at the margins of affordability. He also said community colleges are affordable for dependent students in all income groups, but affordability gaps remain among independent two-year college students.


Dr. Lee said Kentucky is providing grant assistance to a large number of students that could afford to go to college without the help. He said it is possible with the funds available to restructure aid distribution and close the affordability gaps.


Dr. Lee said he does not see an unreasonable debt burden for Kentucky students. Kentucky is average or below average in loan burden compared with other states. He said individual students may face very different circumstances than those suggested by the average.


Dr. Lee provided several recommendations for Kentucky in regards to college affordability. They were: 1) Kentucky's approach to assuring affordability should define a role for students, parents, and the state and federal aid programs; 2) Helping students and their families prepare academically and financially for college is an important adjunct to keeping higher education affordable; and 3) Kentucky should continue to collect the data relevant to monitoring changes in affordability over time.


Dr. Breneman said the pricing system for college is almost tailored now for individual students needs. He said state appropriations affect the tuitions charged by the public universities. Federal grants and aid are a variable. State tuition aid and tuition tax credits were introduced in the in the late 1990's. It is now somewhat of a monster of a system. He said there is a serious communication problem and the media even translates to the public that college can cost $1,000 a week, which is focusing on the high-end private institutions. He also said that students are leery of going into financial debt for a college education that they are skeptical of the outcome.


Dr. Breneman mentioned the project "The Fifty State or National Report Card of Higher Education" which is an activity of a freestanding organization called the National Center for Public Policy in Higher Education, and is chaired by the former Governor of North Carolina, Jim Hunt, and has a distinguished board. Since 2000, there has a been fifty state report card, which is essentially, a benchmarking exercise where the states are stacked up against each other in terms of how well they prepare young people for higher education, how well they compete on participation rates, completion rates, affordability, benefits to the state, and student learning. This device was created to turn the state level conversation about higher education finance away from an institutional conversation, but to direct it towards indexing affordability based on the cost that the student pays for higher education relative to the families income within the state.


Dr. Breneman said there is a move at the federal level to put into place a system nationwide as Dr. Lee has described. He said this has been deeply opposed, and indicators are that this will not happen. He said states that have this system already in place will benefit from using it.


Dr. Breneman said the National Center for Public Policy in Higher Education's focus is clearly to encourage states to participate in higher education, not to put out policy recommendations and argue for a particular way of doing things. He said states that have received A's on affordability are Illinois and North Carolina.


Dr. Breneman said Virginia's tuition is increasing eight to ten percent a year. He said several institutions including the University of Virginia, and a companion program in Chapel Hill, North Carolina, have announced an intention to finance out of their own resources a full-ride package to any student who comes from a family whose income is 200 percent or below the poverty level, and has applied and beem admitted to the university. This student will receive a free college education with absolutely no loans. He said this is an effort to overcome the criticism that the university's pricing policies are driving away students from low-income families. This is the first year the institutions have implemented the program and it is unclear of the effect and to know how many of the people that show up are people who would not have been there otherwise. He said early numbers show a gain of 40 to 50 students in this low income category who have enrolled at the institutions. He recommended Kentucky waiting to try this approach until they see more results out of Virgina and North Carolina.


Dr. Breneman said financial aid is necessary for students to afford college, but it is certainly not sufficient.


Senator Shaughnessy asked if there was a ranking where Kentucky compares to other states. Mr. Layzell said Kentucky ranks 14th on the national report card. This is a decline from being 8th in 2002, however, on a national basis, it is still a high ranking in affordability.


Senator Shaughnessy said Kentucky has unique opportunities to help people go to college. He asked if anyone had looked at the Metropolitan College Initiative with the University of Louisville and Jefferson Community College. They said they had not. Senator Shaughnessy said that Kentucky needs to move beyond the traditional strategies in terms of financial aid, whether it is merit-based or need-based, and to create new initiatives such as the Metropolitan College Initiative.


Senator Winters said he would get members a copy of the "National Report Card" who wanted one. It said it is a very good comparison of Kentucky to other states. He said Kentucky needs to promote the data through media releases.


Dr. Lee said the aggregate comparisons made in the report card are based on nationally standardized data. The data used for this affordability study is more detailed than what is found in other states so it is not possible to do it by income group as has been done internally in the state because the rankings are a gross measure because of data limitations.


Dr. Swail said national comparison is good, but its use is limited. Kentucky is unique and need to focus on accomplishing its own goals.


Dr. Longanecker said the need-based program is not as strong today in its level of support. He said Kentucky had its strongest program in the 1980's, but is starting with a much stronger base than other states. Senator Shaughnessy asked how he could say it was not as strong when there is more money dedicated to the College Access Program (CAP) and Kentucky Tuition Grant (KTG) program than ever. Dr. Longanecker said in real terms per student compared to the cost of education it is not covering what it used to cover. He said Kentucky should be proud of what it has done, but it can improve.


Dr. Longanecker said Kentucky has good internal intentionality with a reasonably strong need-based program, merit-based program, and a private college capitation program, which gives the state a tremendous advantage. In many of the states he has worked with, they do not have a strong independent sector of higher education. He said Kentucky has good intentional relationships internally with those three programs and that gives the state a very strong base from which to work.


Dr. Longanecker said Kentucky does not need to look back. It needs to double its number of degree recipients over the next 15 years. In order to double the share of the population that are getting college degrees, all else being equal, the state would have to double the state contribution to higher education, which is not highly likely to happen. The state will probably come up with some additional resources to increase the numbers of people enrolled in higher education, but doubling it would be a stretch. In order to attract new students from families with little resources, Kentucky needs a higher priced, and a higher tuition structure. If the state cannot come up with the resources, it is up to the students to provide the additional resources. It also means that Kentucky needs a more integrated process between tuition and financial aid to assure that those students who most need it, and cannot afford it, are protected. He said it is ironic, but Kentucky, in order to achieve its access goal, may have to increase the price at least for some students in order to provide the access overall.


Dr. Longanecker said the independent students seem to be the most at-risk financially in terms of affordability in the state. He said virtually every state in the country is facing this and some people are proposing to take the current financial aid programs and expand and change them for those students. He said expanding the financial aid programs along their current designs will not work because adult students really have a different set of needs and circumstances, and some very creative work will have to be done in this area not only to the college level students, but to the adult literacy group that are not yet ready to perform at the postsecondary level, but still need some additional skills and education. He said this is a huge challenge for Kentucky as it moves forward. Employers will be key and Kentucky should look for ways to encourage them to invest in their human capital even when they do not see the value in doing that.


Dr. Longanecker said Kentucky does not have good external intentionality. He said Kentucky is not working the partnerships as strongly as possible, particularly the federal relationship. There are tremendous tax benefits available to students today that students are actually receiving. Kentucky's programs should take this into account for the middle and upper income students. This does not help the low income students because they do not pay federal taxes.


Dr. Longanecker said the UPS agreement in Louisville with the University of Louisville and the Jefferson Community College has received wonderful press across the country in terms of partnerships with employers. He said there is more that can be done in terms of trying to find intentional incentives with employers to be more active in contributing to student's postsecondary education. He said employees need to learn the skills that they need for the new workforce of the future. He said if Kentucky could find a structure to help these people succeed and blend something that is based on their need and their performance as they move on, Kentucky would be providing something very novel and attractive and useful to the rest of the country as well.


Dr. Swail said the Educational Policy Institute surveyed 1,900 high schools seniors in Kentucky from 12 different geographic regions and asked them how affordable they think postsecondary education is. He said students were asked two questions. They were: 1) What did they think the tuition charge was at their local community college; and 2) What did they think the tuition charge was at the University of Kentucky? They were specifically told not to include room and board, and books, just tuition. The median of the findings was $4,000 a year to attend the community college. He said students thought it was $10,000 a year to attend the University of Kentucky before room and board, book, and other fees. This is what is in the mindset of the average high school senior in Kentucky.


Senator Winters asked what the parents of the students surveyed think about college costs. Dr. Swail said typically the parents that hold a bachelor's degree know, but parents without a degree have no idea what the cost of attending college is.


Senator Winters said many low income students are attending the independent college sector. He said this jumped out at him in the slide in the handout on full-time students and what types of institutions they attend.


Representative Miller said colleges increase their tuition every year. He said many people regardless of what income bracket they fall in, have debt and cannot afford to send their children to college. He said the medium income level people need help just like the low income students.


Dr. Lee said willingness as well as ability comes into play and these are two different concepts. He said people in the third income quartile ($45,000 - $74,000) would have a difficult time paying a $10,000 tuition fee. He said the loans of convenience are one way to pay, but it is hard for people to go into debt burden. He said these folks are not eligible for the Pell grants (the need-based programs) and it is difficult to tell parents to live at a lower standard of living to be able to afford to send their children to college.


Dr. Longanecker said this was a huge issue in Minnesota when they developed the concept for shared responsibility. The dilemma developed when the state expected the family to contribute to their children's education, and some families would not accept that responsibility, and put their children at-risk. Minnesota found a reasonable balance by saying it is not fair to put that burden on the taxpayer to pick up the responsibility that the family should have provided, but found a couple of ways for the student to attend college.


Representative Miller asked why the low income students could not work as well. Dr. Longanecker said in the Minnesota model, every student, whether they were from a poor or wealthy family, was expected to pay for 50 percent of the cost of instruction. The system was designed for students to either work or borrow to pay to attend the community college, and students worked and borrowed to pay for a public four-year college.


Representative DeCesare asked how many financial aid offices from institutions participated in the study. Ms. Sandy Woodley, CPE, said all the public institutions participated, and most of the private institutions. Representative DeCesare asked how many Kentucky residents that included. Dr. Lee said a rough number would be 160,000 Kentuckians. The exact amount is included in the full report.


Representative DeCesare asked about the variables left out throughout the presentations and asked if they would be added for the full report in September of 2005. Dr. Lee asked what sort of variables particularly he was interested in. Representative DeCesare said he heard Dr. Lee say that was certain information not included in the report. Dr. Lee said the first issue was the access question. The data collected from the high school students and data collected both from the student unit record and individual high schools will identify exactly who is going to college and from what region. Dr. Lee said the second issue is part-timers because they do not fill out the forms and there is no way to find out about their incomes. Dr. Lee said the third issue is persistence. If someone does not continue in college, how did price relate to that decision? In order to do this analysis, longitudinal data must be obtained. These are the three issues that will be studied further and additional information will be available in the final report due out in September.


Representative DeCesare discussed the double digit tuition increases in Kentucky over the past couple of years. He also discussed Kentucky's grade of D- on the "Measuring Up" report card. He said he heard throughout the presentation today that Kentucky needs to raise its tuition rates, and asked if they were suggesting that Kentucky institutions need to raise tuition rates.


Dr. Longanecker said two-thirds of the states received F's on the "Measuring Up" report card. He believes there was a problem with measurement in "Measuring Up". He is a fan of "Measuring Up", but they did change their protocol for that particular measurement in the last year, and he believes they are trying to make a statement rather than providing a fact. He said Mr. Layzell's point is a better one, which says Kentucky ranks 14th nationally in affordability.


Dr. Longanecker said in order to meet the goals of doubling the number of people enrolling in Kentucky colleges, a new structure must be put into place. He said he does not see any other place but tuition to get the money. It is his argument that Kentucky needs to find a way to target the subsidies more effectively than in the past, increase the advertised price, increase financial aid in sync with the tuition price, and in sync with state appropriations.


Representative Draud said Kentucky being the 14th state in affordability is commendable. He said many students and parents still believe college is out of reach for them. Does Kentucky need a policy or better counseling for high school students?


Dr. Swail said the only thing more expensive than college is not attending. He said Kentucky needs a communication campaign. People need to see a benefit from attending college.


Representative Draud said Kentucky needs to do a better job of communicating the affordability of Kentucky's colleges to students and parents. Dr. Longanecker said yes, it is a policy issue. He said there are a number of states such as Indiana and Oklahoma doing some interesting communications efforts, as well as the federal "Gear Up" program. At one time, it was believed that just by providing financial aid was providing access. In fact, this is a complex story and needs a communication strategy.  Secondly, many communication strategies are not really very strong marketing programs. They do not mirror the same communication strategies such as the Army, Navy, and Marines as far as recruiting new people.


Representative Draud asked if a new policy should be implemented for financial incentives to make it more attractive for independent students to go back to school. He said this would critical to Kentucky's overall success of getting college graduates. Dr. Longanecker said yes.


Dr. Lee said there is an invisible piece of money that is employer aid. He said it is unknown how many part-time students are receiving aid from their employers.


Senator Kerr asked how Kentucky can make its institutional programs more transparent like the state programs. Dr. Longanecker said Kentucky cannot expect its institutions to do unnatural acts. Many universities use their current financial aid programs for enrollment management, which attracts students who fit the profile of the students they most want. They use their financial aid money to advance the mission of the institution. The state financial aid money should be used to advance the mission of the state.


Senator Kerr asked why Kentucky is not strong with the Hope scholarships and external intentionality. Dr. Longanecker said most of Kentucky's programs predated the federal tax credit program. Senator Kerr asked Mr. Layzell if Kentucky was looking at offering tuition tax credits. Mr. Layzell said yes.


Representative Rasche said nine states on "Measuring Up" scored better on access and affordability. He asked why independent students are paying a higher sticker price for college. Dr. Longanecker said the difference is the living cost. Most of these students have families to provide for.


Representative Rasche asked how do we communicate higher tuition rates and market this perception effectively. Dr. Swail said there is some research that a higher price with a lower net price may be a stronger draw for recruiting students than just the lower price.


Senator Winters reminded members to make their reservations at Kenlake State Resort Park for the September Interim Joint Committee on Education meeting on September 12, 2005. He also mentioned the possibility of moving the August education meeting from its regular meeting date of August 8th to August 29th.


With no further business before the committee, the meeting adjourned at 3:l0 p.m.