Rss Feed
Tweeter button
Facebook button

Funding review: how much might it cost and who might gain most …

As another review of higher education funding in England is launched, two questions loom large: how much will the potential reforms cost and who will benefit most from them?

Some early answers to these questions are provided by modelling conducted by the consultancy firm London Economics. It estimates that the current cost to the Treasury of England’s higher education system stands at £8.5 billion per cohort, consisting of £4.5 billion of tuition fee loans that are never repaid, £2.7 billion in maintenance support and £1.3 billion in teaching grants.

Under the existing system, higher education institutions receive £10 billion in fee income and £1.3 billion in teaching grant, which is offset by expenditure of £191 million on bursaries. Average debt on graduation stands at £46,000 but the proportion of student loans that the government does not expect to be repaid (the resource and accounting budgeting, or RAB, charge) stands at 45.1 per cent: average loan repayments are estimated to be £37,700 for men and £16,200 for women.

These figures could change significantly under funding reforms that could be considered by the government review.

Abolish tuition fees: £4.6 billion per cohort, higher-earning graduates benefit most
Assuming that higher education institutions are fully compensated for the loss of £9.8 billion in net tuition fee income, this would cost the Treasury £4.6 billion. This is driven by the reduced volume of loans issued (maintenance loans only) and a subsequent reduction in the RAB charge to 25.7 per cent. The average debt per student on graduation would reduce to £19,200 and total repayments would fall by £20,000 for male graduates and £6,800 for female graduates. Higher-earning university leavers would be most positively impacted. 

Reduce fees to £6,000: £1.2 billion per cohort, only higher-earning graduates benefit
If higher education institutions are not compensated for lost fee income, they would be £3.3 billion worse off. However, the Treasury would recoup £2.4 billion as a result of reduced loan write-offs, with the RAB charge dropping to 40.8 per cent. If universities are compensated in full, the cost of the reform to taxpayers stands at £1.2 billion. Average debt on graduation would fall by £9,600, to £36,600, but total repayments would be unchanged for students in the bottom five deciles by income.

Reintroduce maintenance grants: £360 million per cohort, only higher-earning graduates benefit
The cost of reintroducing maintenance grants at 2015-16 levels is estimated at £1.6 billion, but reduced loan write-offs would save the Treasury £1.3 billion and the RAB charge would fall to 42.7 per cent. This leaves a net cost of £360 million. Average debt on graduation would stand at £39,800, but again total repayments are unchanged for students in the bottom five deciles. Wealthier graduates’ repayments decline, but not by as much as under the £6,000 fees scenario.

Charge loan interest at retail price index: £1.6 billion per cohort, only higher-earning graduates benefit
This would cost the government an additional £962 million in fee loans and £619 million in maintenance loans that would never be repaid. Average debt on graduation would reduce to £43,900 and average repayments would reduce by £6,600 for men and £2,100 for women. However, for men in the bottom four deciles, and women in the bottom eight, total repayments would be unchanged.

Reduce loan repayment period to 25 years: £1.5 billion per cohort, middle- and high-earning graduates benefit most
This would cost the government an additional £904 million in tuition fee loan write-offs and £611 million in maintenance loans, increasing the RAB charge to 53 per cent. Average repayments would decline by approximately £5,300 for men and £4,300 for women, with middle-income male graduates and high-earning females benefiting most.

Increase the loan repayment threshold to £30,000: £2.2 billion per cohort, middle- and high-earning graduates benefit most
Presuming interest rate thresholds would be increased by the same amount, this would increase the RAB charge to 58.7 per cent, with the result that 87 per cent of graduates would never fully repay their loans. Average repayments would fall by £6,400 for men and £6,200 for women. Again, middle-income male graduates and high-earning females gain most.

chris.havergal@timeshighereducation.com

Article source: https://www.timeshighereducation.com/news/funding-review-how-much-might-it-cost-and-who-might-gain-most

A group of Texas lawmakers wants to fix higher education funding …

After lawmakers last year failed to overhaul how the state funds its public colleges and universities, a special committee on Wednesday will begin a new attempt to review the complicated higher education finance system in Texas. 

Complaints have crescendoed about eroding government support for higher education. But at stake in the coming months isn’t how much money Texas pumps into its colleges and universities; it’s whether the state’s method of disbursing nearly $3 billion per year to those schools through formulas and direct appropriations is due for a comprehensive makeover.

“The way we fund higher education in Texas is overdue for a close, detailed look and consideration of substantial changes,” said state Sen. Kelly Hancock, R-North Richland Hills, one of the committee’s co-chairs. 

The Joint Interim Committee on Higher Education Formula Funding was convened out of a compromise at the end of the 2017 legislative session following an unsuccessful bid by Senate leadership to overhaul the higher education finance system entirely. The Senate’s efforts panicked college leaders and were rejected by powerful members of the House, who have generally called for modifications to be made in lieu of wholesale changes.

The Texas Tribune thanks its sponsors. Become one.

Stymied, lawmakers agreed to preserve the current system for the next biennium but directed an interim committee to study it and issue recommendations by April 2018.

The committee is made up of five representatives tapped by Republican House Speaker Joe Straus and five senators appointed by Republican Lt. Gov. Dan Patrick, none of whom serve on the upper chamber’s higher education committee. Though the panel has leeway to reshape the system, they’d have to overcome numerous political hurdles — and inertia — to do so. It’s unknown who will take the helm of the House in 2019 — Straus is not running for re-election — and the competing interests of legislators and schools make consensus difficult.

“I’m not sure that overhauling higher education finance is something that can be done with two meetings in February and a report due in April,” said state Rep. Donna Howard, D-Austin, one of the committee members. “However, I am hopeful that a focused discussion of how higher education financing methods have impacted institutional behavior will reveal some insights before next session.”

Special items

There are two main components to the state’s current method of funding higher-education: “special items” earmarked for specific projects and a per-credit allocation disbursed using a formula. 

The “special items” are funds allocated outside the normal formulas to give schools cash infusions to start up new programs or pay for initiatives not always within their academic mission. But state Rep. Trent Ashby, R-Lufkin, one of the committee’s co-chairs, said they’d caused “some heartburn for members,” and they’re set to be the focus of a separate hearing later this month.

In the previous biennium, the 362 special items ranged in cost from a $31,500 research initiative at Sul Ross State University to a $61,397,900 allocation for the University of Texas Rio Grande Valley’s School of Medicine. Some schools receive what amounts to a supplement through the “special items” allocation process that they use to hire more professors and staff.

The Texas Tribune thanks its sponsors. Become one.

But the “special items” funding stream has drawn ire from lawmakers who say it’s grown too large and is duplicative of the per-student allotment. Critics have also argued that the items are distributed unevenly among universities and that state budget writers usually don’t go back and evaluate whether they should be kept in subsequent budgets. 

“Special items were intended to support research, startup costs and other initiatives, not to remain as never-ending line items in the state budget,” state Sen. Jane Nelson, R-Flower Mound, the Senate’s lead budget writer, said last year.

“The sky really is going to fall if you pass this bill.”

— John Sharp , Texas AM University System Chancellor, about a 2017 effort to eliminate special items

Last session, some senators tried to zero out the $1.1 billion in funding meant for “special items,” offering to mitigate the effects of the cut with a $700 million infusion to the per-credit pot. The move agitated university leaders, who protested that “special items” frequently pay for entire programs or medical schools. “The sky really is going to fall if you pass this bill,” Texas AM University System Chancellor John Sharp said at the time.

Some universities argue that money removed from the “special items” stream could not be easily replaced. Even if the items were eliminated and the money were reallocated, it would be diffused into the per-credit stream, critics say. That might mean some important projects designated to receive specific money — like the McDonald Observatory in the University of Texas at Austin budget — might be harmed financially.

Formula funding

The per-credit funding mechanism has critics, too, but is less frequently in lawmakers’ crosshairs. Much of it is calculated using a formula that largely hinges on how many students an institution has and what discipline those students are studying. Data from the Texas Higher Education Coordinating Board shows engineering students cost more to educate than their liberal arts peers, so the formula gives a greater weight to engineering when calculating how much money universities should be paid.

Schools also receive funding for infrastructure costs through this stream, but under a different formula based on square feet and utility rates.

Detractors argue the formulas aren’t a good proxy for what universities’ costs are and don’t accurately account for part-time or other nontraditional students. Colleges with rapidly swelling student populations also complain of budgetary shortfalls, since the per-student funding is based on past years’ enrollment data.

The Texas Tribune thanks its sponsors. Become one.

Ashby said that “in most cases, our formulas are in place for good reason.” But he added he was “hopeful that we can agree on some concepts to promote efficiency and equity at all of our institutions.”

Outcomes-based funding

Though it may prove politically impossible, the committee has license to recommend an overhaul of how higher education in the state is financed. Its charge says lawmakers can consider realigning or eliminating “special items” and improving the per-credit allocation.

Rather than basing it on the number of students in each discipline, lawmakers could tie a school’s funding to how well their students perform. Hancock said the committee should “absolutely see what lessons can be learned from states that successfully implemented outcomes-based funding at four-year institutions,” and the possibility is slated to be discussed during at least one panel Wednesday.

The state’s community and technical colleges already receive their funding through a formula that factors in students’ performance. At the Texas State Technical College System — appropriations for which have been tied to graduates’ earnings for the past few years — the switch has “worked in a big way,” said Chancellor Mike Reeser.

What happened, Reeser said, is administrators’ “obsession” with maximizing class-time was “replaced with an obsession with making sure kids got jobs and making sure they got the training they needed to get good salaries.” Graduation rates there increased 42 percent over a six-year period, and graduates’ salaries went up 83 percent. 

“Our mission is to create a skilled workforce, so using student employment outcomes was a very natural thing to do,” Reeser said — but he added that institutions with broader goals, like four-year universities, would need to be evaluated using different metrics.

Ashby similarly said the outcomes-oriented model has been “critical to driving completion and promoting skilled degrees” there but that the “mission of a larger flagship university or a four-year regional institution is much different.”

As an alternative to replacing the formula based on headcount with one based on students’ performance, some university officials say lawmakers could add a sort of outcomes-based supplement — a bonus for schools where students perform well. 

“Having some type of performance funding tied to each institution’s mission, in addition to a consistent and stable model for funding would benefit Texas students and our economy,” said UT-Arlington President Vistasp Karbhari.

Sul Ross State University, the Texas AM University System, the University of Texas at Austin, the Texas State Technical College System Board of Regents and Mike Reeser have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

Read related Tribune coverage:

  • In the Texas Capitol this year, university leaders’ worst fears never materialized

  • Texas universities forced to trim their budgets, even with big state cuts averted

  • Kevin Eltife joined the UT System as an outspoken critic. Now he might reshape it.

Article source: https://www.texastribune.org/2018/02/20/formula-funding-hearing/

We need to rethink higher education funding

I was the first person in my family to have the chance to go to university.

I know how much it transformed my prospects and, in many ways, my life, so, for me, like so many others, making sure that the system works for the students in it now really matters.

Of course, understanding the higher education funding system that we have in our country is like taking a degree in itself; it’s pretty complicated.

Many people will confess that they don’t really understand how it works; yet the debate over tuition fees and the taxpayer loans that students need to fund them has been one of the most controversial political issues of our time.

Let’s start with how the system currently works. Overwhelmingly, all degrees cost students £9,000 per year in fees, and that fee money is provided up front by the taxpayer and then is owed back to the taxpayer as a loan paid by the student.

Most students also have to have another loan of cash from the taxpayer to fund living costs – that’s called the maintenance loan. It used to be a grant.

Not all students need a loan to pay the fees and living costs. Some families are wealthy enough to simply cover the fees (not many), but many more better-off families understandably help out with living costs for their children at university.

So students from more disadvantaged backgrounds who don’t have parents who can help out with living costs often end up leaving university with more debt than their better-off peers, which isn’t good for equality of opportunity.

The more complicated bit is how students then pay back the money they’ve borrowed from the taxpayer.

The way it works is that graduates have an extra “graduate contribution” that is taken out of their pay to pay off the taxpayer loan, but in order to be affordable they start paying it only when they’re earning above a certain income threshold (£25,000 from April) and then pay 9 per cent of the extra earnings above the threshold.

It’s like an extra surcharge on top of income tax and national insurance and is collected at the same time by HMRC to pay off their taxpayer “loan”. Most graduates won’t pay enough “graduate contribution” over 30 years to pay off their loan. The taxpayer writes off the rest.

And amid the complexity it has meant proper, sustained funding for our world-class universities and real investment in high-quality degree courses, which is why the OECD has praised our system.

Crucially it’s meant that, unlike Scotland, we have been able to remove any cap on student numbers. Now, if you get the grades, you can go to university. That is a huge boost for social mobility, and we’ve seen record numbers of disadvantaged young people now getting to university for the first time.

But that doesn’t mean that our system can’t be improved, and it doesn’t mean that we should just assume that it will continue to deliver more opportunities for more students, for ever. As fees have risen, the level of debt has grown. While the gap has narrowed between the proportion of disadvantaged young people going to university and their better-off peers, it still remains wide.

In announcing a major review of student finance, the government has at least opened up the possibility of looking at what a better approach might be.


Search our database of more than 3,000 global university jobs


Resolving this issue matters if we are to become a country where there is equality of opportunity, and it is far too important to continue to be kicked around like a political football by Westminster parties. Young people deserve better, and universities, often major employers in their local communities, need certainty.

In practice, you can mend the current system, perhaps by reintroducing maintenance grants and tackling punitive interest rates, or make more fundamental changes. For this, ideally there needs to be a broad consensus.

A Higher Education Fund reform

A broader reform could bring real sustainability to higher education financing if the government is prepared to think for the long term. It would involve reworking the parts of the current system that don’t work, but also keeping the sensible elements that do work.

First, maintenance grants should be reintroduced. To remove them was regressive, and this mistake should be rectified.

Under the current maintenance loan approach, students from lower-income families less able to help them with living costs come out with more debt, like for like, than their better-off peers. That’s unfair and cannot be allowed to continue.

Second, the “graduate contribution” should stop paying off a “loan” and instead be paid into a Higher Education Fund (akin to national insurance funding the NHS/pensions).

All graduates should pay for the full time period, not just the lower-earning 70 to 80 per cent. That would mean that fairly, the graduates who earn the most from having a degree would pay the most into the Higher Education Fund. As a higher proportion of adults in the future are likely graduates, Higher Education Fund costs could be spread more thinly across more graduates.

Graduates should fund the higher education system they benefit from, rather than those people who don’t. Most students do feel there is an issue of fairness about this; that their peers who do not go to university should not have to pay for those that do, especially when graduates are likely to do better in future earnings as a result of having a degree. I think that’s right – broadly, those who benefit from university degrees should pay for them.

Employers could also contribute to the Higher Education Fund for degrees that are critical to their organisations, for example, science, technology, engineering and mathematics (STEM) degrees. Bursary strategy could fit into the Higher Education Fund. A reform of the apprenticeship levy to become a wider skills levy could be a way to effectively channel extra funding and incentives to plug the skills gap and give employers some of the flexibility that they are asking for in the apprenticeship levy. It would require looking at the levy rate.

The impact of this would be a reformed system with a Higher Education Fund that:

  • is progressive, not regressive: graduate contributions go to a Higher Education Fund, financing current students to get the same opportunities to go to university that graduates have had. This is the exact opposite of the unfair proposal by Labour at the last general election to scrap tuition fees and have university funding paid for by general taxpayers – it was hugely regressive
  • tackles debt aversion: a graduate contribution-based system means no annual interest statement with a loan and interest rate. Potentially more than £100 million annually saved by not having the Student Loan Company calculating, preparing and sending out those annual loan statements
  • means better decisions for young people considering university: Not “are my (extra) future earnings worth taking out this student debt for?” which most won’t pay off anyway – but instead “are my future extra earnings only possible if I have a degree?”

These reforms mean that those graduates from disadvantaged or from better-off backgrounds who want to go into public service or socially valuable but relatively lower paid roles per se, will not do so with an impossible debt hanging over them. Likewise, those who do the best financially from their degree – again, irrespective of background, will contribute the most into the Higher Education Fund to continue to finance a world-class higher education system for current students.

Finally, and optionally, universities could be funded for the actual costs of delivering the course rather than the present flat £9,000 fee. The Higher Education Teaching Grant already bands different degrees on costings, recognising that some, such as STEM degrees, require extra money to cover higher costs. Universities themselves cross-subsidise from lower-cost degrees to higher-cost degrees.The taxpayer has no sight of this.

Instead, doing this at the national level with a banding system (similar to the teaching grant system that already exists for the teaching grant to top up STEM degree costs) would also give taxpayers a better driver for ensuring value for money of the same sort of course at different universities and also in relation to the differing career and earning outcomes for graduates.

The major review into higher education finance is an opportunity to take a fresh look. It should be guided above all by changes that are fair so that those who benefit the most, pay the most, and that help deliver equality of opportunity. After that, value for money and a system that works with the grain of delivering what the UK economy needs are also important.

I hope that those conducting the review take this opportunity.

Justine Greening is the Conservative MP for Putney, Roehampton and Southfields. She was education secretary from July 2016 until January 2018. This piece is taken, with permission, from Ms Greening’s personal blog.

Article source: https://www.timeshighereducation.com/blog/we-need-rethink-higher-education-funding

FIU leaders advocate for higher education funding

As the Trump Administration released its federal budget proposal and the Higher Education Act is considered, FIU students and leaders were on the scene to advocate and gain insights during the first Panther Alumni Week in D.C.  The College of Communication, Architecture + The Arts launched a semester course and hosted an national convening on the future of journalism education. 

Federal budget, infrastructure plan released

Earlier this month, the Trump Administration released both its budget request to Congress for the coming fiscal year and a multi-year, $1.5 trillion infrastructure plan. Both of those join DACA and the reauthorization of the Higher Education Act as front-and-center of the legislative calendar. With funding for financial aid and FIU’s preeminent research areas at stake, university leadership was mobilized to advocate on Capitol Hill.

Both President Mark. Rosenberg and College of Engineering and Computing Dean John Volakis were advocating on the hill for FIU’s research priorities.  Volakis focused on research activities funded by the Department of Defense, which are critical to national challenges.

“We are here this afternoon talking about the Higher Education Act. It is going to focus on learning and earning, as well as apprenticeship. We are also looking at the financial aid implications for our students. We know that our students need that financial aid to graduate on time.” said Rosenberg

Although Trump’s budget request is unlikely to become law, the annual budget ritual is telling in understanding the priorities and desired initiatives of the Administration. FIU’s Office of Federal Relations has prepared a summary of certain priority initiatives and programs proposed for elimination. FIU advocates will be busy for the coming months to safeguard FIU’s interests and programs.

Also present at the White House as President Trump rolled out his Infrastructure Plan was Miami-Dade County Commission Chairman and FIU alumnus Esteban “Steve” Bovo, who represented the county’s resilient infrastructure and transportation funding initiatives

“The environmental regulatory process delays our ability to deliver projects. We’re trying to be very aggressive. We created legislation that allows transit-oriented development and addresses resiliency issues,” said Bovo.

 

Paving the way for students with real-world advice

FIU in D.C. and the College of Engineering and Computing celebrated Panther Alumni Week in Washington, hosting a group of 40 engineering students and alumni from the region. The students were in town for the BEYA STEM global competitiveness conference, a 3-day exhibition where engineers networked, shared technological advancements within their fields and discussed policy issues affecting the STEM community.

Alumni speakers included Javier Oliu of NIKA Engineering, Robert Babayi of Vector IP, David Lagomasino of the University of Maryland and Juan Fernandez a contractor with NAVSEA.

“I gained valuable insight on the opportunities for graduating engineers. I can see that the university is tirelessly working to assist their alumni in their future ventures,” said Fiorella Rivera, mechanical engineering major and president of ECO Engineering club.

In addition to engineering alumni, other participants for Panther Alumni Week in D.C. included Kevin Hernandez of the Libre Foundation, political strategist P.J. Campbell and Ben Utterback of Hinge Marketing.

 

CARTA convenes a discussion on the future of journalism education

At a time when the value of powerful storytelling is in demand, the College of Communications Architecture + The Arts (CARTA) coordinated an event earlier this month that explored the underlying issues and potential disruptions to journalism education.

Two alumni – Mel Leonor, who is a higher education reporter for Politico, and Mike Vasquez, who is a senior investigative reporter for The Chronicle of Higher Education – participated in the discussion of how to enhance the study of mass communications.

“It is imperative that our graduates gain the expertise necessary to prepare themselves for the competitive, intimating job market,” Vasquez said.

Other participants were in attendance included University of Maryland, WAMU, Duke University, American University, George Washington University, Scripps Howard News Service, Industry Drive, National Public Radio(NPR), Fox News and The Washington Post.

CARTA course debuts in D.C.

This semester, FIU in D.C. will launch a new course with the CARTA. The internship in communications course is a four-credit course held weekly to complement the student interns worksite experience.

Fifteen FIU students are currently interning in the nation’s capital at various locations in specialized fields. Some of FIU’s intern workforce areas are on Capitol Hill, The White House, The Washington Center(TWC), Woodrow Wilson Center(WWC),The Hill, Congressional Hispanic Leadership Institute(CHLI) and Congressional Hispanic Caucus Institute(CHCI).

“The Long Night of the Watchman”

On Feb. 13, the Steven J. Green School of International and Public Affairs, co-sponsored with the Embassy of the Czech Republic, Victims of Communism Memorial Foundation, a book presentation on The Long Night of the Watchman: Essays by Václav Benda,1977-1989.

Renowned Czech anti-communist dissident and Catholic thinker Václav Benda (1946-1999) was an earlier signatory of Charter 77 and served twice as the association’s spokesperson. Charter 77 is a civic initiative that demanded the Communist government of Czechoslovakia to acknowledge/ administer basic human rights.

His essays delve deeply into life under a communist regime.

Video of the Week

Panthers Spotted:

  • Former Miami Mayor Manuel Diaz
  • Julieta Vallejos, College of Engineering and Computing
  • Richard Montes de Oca, MDO Partners

 

 

Facebook   l  Instagram   l   Twitter


To learn more about the university’s presence in the nation’s capital, visit FIU in D.C.’s website.

If you’re new here, you may want to subscribe to our newsletter. Thanks for visiting!

Article source: https://news.fiu.edu/2018/02/fiu-leaders-advocate-for-higher-education-funding/119560

Funding review: ‘radical change needed’ to deliver fair system

A review of post-18 education is unlikely to quell anger over student finance in England, experts have predicted.

In her speech launching the review on 19 February, prime minister Theresa May said that she shared some of the concerns about undergraduate funding arrangements and that the review would “examine how we can give people from disadvantaged backgrounds an equal chance to succeed”.

The options it could consider could include lowering tuition fees, reintroducing maintenance grants, changing the interest rate on student loans, or adjusting the length of time graduates are expected to make repayments for. But Ms May ruled out abolishing fees.

Patrick McGhee, assistant vice-chancellor of the University of Bolton, said that radical changes to the funding system would be needed to win students’ support.

“It is difficult to believe that students opposed to fees will be won over by a new set of what will probably be rather complex arrangements, only at best slightly less burdensome but less familiar than the current ones,” he said.

The electoral gains to the Conservatives from the review were likely to be minimal, added Professor McGhee, a former vice-chancellor of the University of East London.

“Jeremy Corbyn and the Labour Party can simply sit on the sidelines repeating the manifesto mantra of ‘we will abolish fees’ [because] every proposal that is leaked from the review, or put to it by a pundit, will inevitably fall short of that simple attractive model,” he said.

Nick Hillman, director of the Higher Education Policy Institute, said that “serious sums of money” would be required to cut tuition fees to £6,000 – one option that has been suggested – or to reintroduce maintenance grants.

With the Conservatives in a minority government, it was also uncertain whether the government would be able to push through any changes in legislation recommended by the review, he added.

The review will be led by the government, supported by an independent chair, financial services expert Philip Augar, and a panel. It is expected to conclude in early 2019, but will publish an interim report in the meantime.

David Green, vice-chancellor of the University of Worcester, said that the review was driven by the need to address the “perception of unfairness” on tuition fees, principally caused by the 6.1 per cent interest rate. “It appears deeply unfair for graduates to pay a real interest rate of 3 per cent [above the retail price index inflation measure] and creates the perception that an unfair system is there to disadvantage the young and help the old,” Professor Green said.

However, Professor Green, an economist, said that concentrating on the “fairness” of student loans dodged a more difficult question.

“This attempt to run a highly progressive income tax system through student loans is complete rubbish and really dangerous as it segregates the system into those with loans and those without them,” he said.

Noting that the highest rate of income tax under Margaret Thatcher was 60 per cent, Professor Green added: “High earners should be paying higher tax rates, and we shouldn’t confuse this with the student loan system.”

Members of the review panel include Baroness Wolf of Dulwich, Sir Roy Griffiths professor of public sector management at King’s College London, and Edward Peck, vice-chancellor of Nottingham Trent University. It also includes Sir Ivor Crewe, master of University College, Oxford; Bev Robinson, principal of Blackpool and The Fylde College, and Jacqueline De Rojas, president of techUK.

jack.grove@timeshighereducation.com

Article source: https://www.timeshighereducation.com/news/funding-review-radical-change-needed-deliver-fair-system

A group of Texas lawmakers wants to fix higher education funding — but it won’t be easy

After lawmakers last year failed to overhaul how the state funds its public colleges and universities, a special committee on Wednesday will begin a new attempt to review the complicated higher education finance system in Texas. 

Complaints have crescendoed about eroding government support for higher education. But at stake in the coming months is not how much money Texas pumps into its colleges and universities. It’s whether the state’s method of disbursing nearly $3 billion per year to those schools through formulas and direct appropriations is due for a comprehensive makeover.

“The way we fund higher education in Texas is overdue for a close, detailed look and consideration of substantial changes,” said state Sen. Kelly Hancock, R-North Richland Hills, one of the committee’s co-chairs. 

The Joint Committee on Higher Education Formula Funding was convened out of a compromise at the end of the 2017 legislative session, following an unsuccessful bid by Senate leadership to overhaul the higher education finance system entirely. The Senate’s efforts panicked college leaders and were rejected by powerful members of the House, who have generally called for modifications to be made in lieu of wholesale changes.

The Texas Tribune thanks its sponsors. Become one.

Stymied, lawmakers agreed to preserve the current system for the next biennium but directed an interim committee to study it and issue recommendations by April 2018.

The committee is made up of five representatives tapped by Republican House Speaker Joe Straus and five senators appointed by Republican Lt. Gov. Dan Patrick – none of whom serve on the upper chamber’s higher education committee. Though the panel has leeway to reshape the system, they’d have to overcome numerous political hurdles — and inertia — to do so. It’s unknown who will take the helm of the House in 2019 — Straus is not running for re-election — and the competing interests of legislators and schools make consensus difficult.

“I’m not sure that overhauling higher education finance is something that can be done with two meetings in February and a report due in April,” said state Rep. Donna Howard, D-Austin, one of the committee members. “However, I am hopeful that a focused discussion of how higher education financing methods have impacted institutional behavior will reveal some insights before next session.”

Special items

There are two main components to the state’s current method of funding higher-education: “special items” earmarked for specific projects and a per-credit allocation disbursed using a formula. 

The “special items” are funds allocated outside the normal formulas to give schools cash infusions to start up new programs or pay for initiatives not always within their academic mission. But state Rep. Trent Ashby, R-Lufkin, one of the committee’s co-chairs, said they’d caused “some heartburn for members,” and they’re set to be the focus of a separate hearing later this month.

In the previous biennium, the 362 special items ranged in cost from a $31,500 research initiative at Sul Ross State University to a $61,397,900 allocation for the University of Texas Rio Grande Valley’s School of Medicine. Some schools receive what amounts to a supplement through the “special items” allocation process that they use to hire more professors and staff.

The Texas Tribune thanks its sponsors. Become one.

But the “special items” funding stream has drawn ire from lawmakers who say it’s grown too large and is duplicative of the per-student allotment. Critics have also argued that the items are distributed unevenly among universities and that state budget writers usually don’t go back and evaluate whether they should be kept in subsequent budgets. 

“Special items were intended to support research, startup costs and other initiatives, not to remain as never-ending line items in the state budget,” Sen. Jane Nelson, R-Flower Mound, the Senate’s lead budget writer, said last year.

“The sky really is going to fall if you pass this bill.”

— John Sharp , Texas AM University System Chancellor, about a 2017 effort to eliminate special items

Last session, some senators tried to zero out the $1.1 billion in funding meant for “special items” — offering to mitigate the effects of the cut with a $700 million infusion to the per-credit pot. The move agitated university leaders, who protested that “special items” frequently pay for entire programs or medical schools. “The sky really is going to fall if you pass this bill,” Texas AM University System Chancellor John Sharp said at the time.

Some universities argue that money removed from the “special items” stream could not be easily replaced. Even if the items were eliminated and the money were reallocated, it would be diffused into the per-credit stream, critics say. That might mean some important projects designated to receive specific money — like the McDonald Observatory in the University of Texas at Austin budget — might be harmed financially.

Formula funding

The per-credit funding mechanism has critics, too, but is less frequently in lawmakers’ crosshairs. Much of it is calculated using a formula that largely hinges on how many students an institution has and what discipline those students are studying. Data from the Texas Higher Education Coordinating Board shows engineering students cost more to educate than their liberal arts peers — and so the formula gives a greater weight to engineering when calculating how much money universities should be paid.

(Schools also receive funding for infrastructure costs through this stream, but using a different formula based on square feet and utility rates.)

Detractors argue the formulas aren’t a good proxy for what universities’ costs are and don’t accurately account for part-time or other nontraditional students. Colleges with rapidly swelling student populations also complain of budgetary shortfalls, since the per-student funding is based on past years’ enrollment data.

The Texas Tribune thanks its sponsors. Become one.

Ashby said that “in most cases, our formulas are in place for good reason.” But he added he was “hopeful that we can agree on some concepts to promote efficiency and equity at all of our institutions.”

Outcomes-based funding

Though it may prove politically impossible, the committee has license to recommend an overhaul of how higher education in the state is financed. Its charge says lawmakers can consider realigning or eliminating “special items” and improving the per-credit allocation.

Rather than basing it on the number of students in each discipline, lawmakers could tie a school’s funding to how well their students perform. Hancock said the committee should “absolutely see what lessons can be learned from states that successfully implemented outcomes-based funding at four-year institutions,” and the possibility is slated to be discussed during at least one panel Wednesday.

The state’s community and technical colleges already receive their funding through a formula that factors in students’ performance. At Texas State Technical College System — appropriations for which have been tied to graduates’ earnings for the past few years — the switch has “worked in a big way,” said Chancellor Mike Reeser.

What happened, Reeser said, is administrators’ “obsession” with maximizing class-time was “replaced with an obsession with making sure kids got jobs and making sure they got the training they needed to get good salaries.” Graduation rates there increased 42 percent over a six-year period, and graduates’ salaries went up 83 percent. 

“Our mission is to create a skilled workforce, so using student employment outcomes was a very natural thing to do,” Reeser said — but he added that institutions with broader goals, like four-year universities, would need to be evaluated using different metrics.

Ashby similarly said the outcomes-oriented model has been “critical to driving completion and promoting skilled degrees” there but that the “mission of a larger flagship university or a four-year regional institution is much different.”

As an alternative to replacing the formula based on headcount with one based on students’ performance, some university officials say lawmakers could add a sort of outcomes-based supplement — a bonus for schools where students perform well. 

“Having some type of performance funding tied to each institution’s mission, in addition to a consistent and stable model for funding would benefit Texas students and our economy,” said UT-Arlington President Vistasp Karbhari.

Sul Ross State University, the Texas AM University System, the University of Texas at Austin, the Texas State Technical College System Board of Regents and Mike Reeser have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

Read related Tribune coverage:

  • In the Texas Capitol this year, university leaders’ worst fears never materialized

  • Texas universities forced to trim their budgets, even with big state cuts averted

  • Kevin Eltife joined the UT System as an outspoken critic. Now he might reshape it.

Article source: https://www.texastribune.org/2018/02/20/formula-funding-hearing/

Truth in numbers? Two ways to look at higher ed funding | Education … – Omaha World

Nebraska looks good


+2 

This chart, with numbers from the Center on Budget and Policy Priorities, combines dollar figures from state and local sources for public higher education. It includes property tax revenues, which go to Nebraska’s community colleges, not the university system. This shows the change in funding from 2008 to 2017.

Nebraska looks average


+2 

This chart, with numbers from the Illinois State University Center for the Study of Education Policy, includes only state funding for public higher education. It doesn’t include local taxes. This shows the percentage changes in state support for higher education from 2013 to 2018.

Tuition compared with Big Ten and Peer Schools


+2 

Article source: http://www.omaha.com/news/education/truth-in-numbers-two-ways-to-look-at-higher-ed/article_92c257f8-87f6-50a5-9d3c-12e0728bf2c4.html

Hinds aiming to deliver variable fees on eve of funding review

By registering, you agree to our cookie policy and terms and
conditions
.

Article source: https://www.timeshighereducation.com/news/hinds-aiming-deliver-variable-fees-eve-funding-review

Funding review: how much might it cost and who might gain most?

As another review of higher education funding in England is launched, two questions loom large: how much will the potential reforms cost, and who will benefit most from them?

Some early answers to these questions are provided by modelling conducted by the consultancy firm London Economics. It estimates that the current cost to the Treasury of England’s higher education system stands at £8.5 billion per cohort, consisting of £4.5 billion of tuition fee loans that are never repaid, £2.7 billion in maintenance support, and £1.3 billion in teaching grants.

Under the existing system, higher education institutions receive £10 billion in fee income and £1.3 billion in teaching grant, which is offset by expenditure of £191 million on bursaries. Meanwhile, the proportion of student loans that the government does not expect to be repaid (the resource and accounting budgeting, or RAB, charge) stands at 45.1 per cent: average loan repayments are estimated to be £37,700 for men and £16,200 for women.

These figures could change significantly under funding reforms which could be considered by the government review.

Abolish tuition fees: £4.6 billion per cohort, higher earning graduates benefit most
Assuming that higher education institutions are fully compensated for the loss of £9.8 billion in net tuition fee income, this would cost the Treasury £4.6 billion. This is driven by the reduced volume of loans issued (maintenance loans only), and a subsequent reduction in the RAB charge to 25.7 per cent. The average debt per student on graduation would reduce to £19,200, and total repayments would fall by £20,000 for male graduates and £6,800 for female graduates. Higher earning university leavers would be most positively impacted. 

Reduce fees to £6,000: £1.2 billion per cohort, only higher earning graduates benefit
If higher education institutions are not compensated for lost fee income, they would be £3.3 billion worse off. However, the Treasury would recoup £2.4 billion as a result of reduced loan write-offs, with the RAB charge dropping to 40.8 per cent. If universities are compensated in full, the cost of the reform to taxpayers stands at £1.2 billion. Average debt on graduation would fall by £9,600, to £36,600, but total repayments would be unchanged for students in the bottom five deciles.

Reintroduce maintenance grants: £360 million per cohort, only higher earning graduates benefit
The cost of reintroducing maintenance grants at 2015-16 levels is estimated at £1.6 billion, but reduced loan write-offs would save the Treasury £1.3 billion, and the RAB charge would fall to 42.7 per cent. This leaves a net cost of £360 million. Average debt on graduation would stand at £39,800, but again total repayments are unchanged for students in the bottom five deciles. Wealthier graduates’ repayments decline, but not by as much as under the £6,000 fees scenario.

Charge loan interest at Retail Price Index only prior to graduation: £231 million per cohort, only higher earning graduates benefit
This would cost the government an additional £140 million in fee loans, and £90 million in maintenance loans, that would never be repaid. Only higher earning graduates would benefit, because lower earning graduates would never repay their full loan. Average debt on graduation would reduce to £43,900.

Charge loan interest at Retail Price Index only prior to and after graduation: £1.6 billion per cohort, only higher earning graduates benefit
This would cost the government an additional £962 million in fee loans, and £619 million in maintenance loans, that would never be repaid. Average debt on graduation would reduce to £43,900, and average repayments would reduce by £6,600 for men, and £2,100 for women. However, for men in the bottom four deciles, and women in the bottom eight, total repayments would be unchanged.

chris.havergal@timeshighereducation.com

Article source: https://www.timeshighereducation.com/news/funding-review-how-much-might-it-cost-and-who-might-gain-most

Why the skills debate matters – Short and long term

With plans afoot for the United Kingdom government to review higher education funding, speculation is growing about the recommendations that might result. Could discounted or otherwise incentivised courses be the answer?

Robert Halfon, an influential Conservative MP and chair of the Education Select Committee, has recently added his voice to the debate about the future of higher education fees. He believes that students who take degrees that lead to employment in areas of skills shortage should receive a fee discount. All courses, he believes, should be about high-skilled employment.

To quote his example, he does not condemn courses such as medieval history but believes the government should not provide any form of discount to students who take them. Instead, he says, the country has serious skills shortages in healthcare, digital, engineering, coding and construction and students should be incentivised by discounts to take degrees in those subjects.

Parity of esteem for skills-based courses would follow if Oxford and Cambridge universities offered degree apprenticeships.

No doubt Halfon exaggerates for effect. His advocacy for new routes to fill serious skills shortages vital to the countrys future is heartfelt and his championing of universities with excellent employment records for their graduates is refreshing. Yet what is needed is not an either-or approach to how well different tertiary courses prepare students for work, but a more comprehensive review of post-school opportunities.

There are striking examples of traditional universities like Sheffield and Warwick with major commitments to apprenticeships and work-based learning. Halfon refers to Dyson, but he could equally praise the extraordinary vision of the founders of a new university in Hereford that is pioneering an entirely different way of teaching engineering intensively, with no lectures and industry placements the norm.

What is interesting about that model is that attitude, ingenuity and drive are the key determinants for entry. Hereford wants passioneers, not engineers. Students with arts backgrounds will be as welcome as those with a science one. The truth is, we need both and often in combination.

As a country the UK should promote coherent and often regionally-based routes for skills-based education where universities, colleges and employers work closely together to design and deliver courses.

Alternative paths

Opening up the fees debate, by reconsidering the possibility of personal learning accounts which could be used to agreed limits by the student for credits within such consortia or universities, or often both, should be considered.

Taking the famous Californian system where articulated learning pathways and qualifications are provided between two-year community colleges and four-year state universities as an example, we need to reinvent the UKs tertiary education system for the 21st century.

Research-intensive universities and private institutions can also flourish in that eco-system. A fairer funding system for all learners with a transparent and universal tariff system would do much to achieve parity of esteem. Such a system would also encourage flexible and part-time learning, with meaningful compacts between employers and education providers.

It is the most depressing consequence of the current system that part-time student numbers have fallen by 60% and mature student numbers by 40% since 2010.

This is not a fantasy. There are emerging networks of this type already and the Office for Students the new regulator has been particularly charged with promoting a workable and effective credit system as well as greater flexibility for students.

The networks are also including schools, academies and university technical colleges so that the imagination of young people can be stimulated from a very young age to consider the beginning of what for many of them will be a lifetime of opportunity and learning.

What are the skills we need for the future?

This is perhaps the most important point about this debate and one that has important implications outside the UK. We are now in what many call Industrial Revolution 4.0 the digital revolution. We cannot easily predict what skills we will need in the future and what kind of jobs will exist.

While responding to immediate need, we must ensure that our education system is based not primarily on what you know but vitally on developing powers of analysis, critical thinking, systematic enquiry and emotional as well as intellectual insight.

These are the skills that will be in most demand and will enable young people to adapt and continue to learn through what will be for many a working life of great variety and different forms of employment.

The intellectual demands of all tertiary education should be celebrated, not just because the curriculum is grounded in the rather slippery concept of the real world. For many universities, the most popular student societies are those for entrepreneurs and which provide space and simple facilities for innovation and experimentation. Education is often about peer learning and context as well as the classroom.

Let us by all means praise apprenticeships and professional degrees. But let us also think much harder about the funding and structure of a tertiary system, not only a university system, that can provide the wider skills, the opportunities and the different routes for lifetime learning that our society will need, not just tomorrow but over the next generation

Dr Jonathan Nicholls is director of strategy and policy services for education at Shakespeare Martineau.

Article source: http://www.universityworldnews.com/article.php?story=20180213130000730