The Financing of Higher EducationEPPL 676

Week #3Overview of Current Financial Condition

New Financial TimesDecreases in State supportShift from grants to loansIncreasing need for education for

jobsChanging student demographicsIncreased student enrollmentsShifting patterns for faculty base

Overview of Financial Aid System

Shift to loansGrowth in volume of loans and

amounts◦Ease of borrowing◦Funding lifestyle, not just tuition

Rational for Loans Varies◦Increase underrepresented◦Loans better on cost/benefit—to

students◦An easier Political sell

Shift to LoansAbsence of Oversight

Infighting among policy makers◦Erosion of consensus◦Shift from parents to students

Incremental Shift

Changes in Enrollment

NCES Digest, 2007

Thought QuestionsIf college enrollments are on the

increase, how will institutions meet demand?

How can states finance public education with competing demands?

Obama wants to increase college graduation rates to over 50%--almost double for some states. Ideas for how this will happen?

Increases in EnrollmentFall 2000-Fall 2005

NCES Digest, 2007

Thought QuestionsHow do the trends in enrollment

patterns differ by states?

Why do you think there is the huge increase in some states?

If you are a college leader in a high increase state—how might you prepare?

COLLEGE ENROLLMENT RATES: Actual and trend rates of high school completers who were enrolled in college the October immediately following high school completion, by race/ethnicity: 1972–2006

Education DesegregationProp 209—California (1996)

◦Prohibit consideration of race, sex, ethnicity

Proposal 2—Michigan (2006)◦No preferential treatment

Texas 10% Plan◦College acceptance for top 10% of

class

Thought QuestionsEnrollment rates for students of color

are below whites. How might colleges address this pattern in light of removal of affirmative action plans?

What links to K-12 can occur to help in recruiting students of color?

CCs enroll the highest percentages of students of color—links to them?

Sources of total revenue of public degree-granting institutions: 2004–05

NCES Digest, 2007

Sources of total revenue of private not-for-profit degree-granting institutions: 2004–05

NCES Digest, 2007

Shifts in enrollment by income

Table 1.  Percentage distribution of full-time, full-year dependent undergraduates according to type of institution, by family income: 1989–90 and 1999–2000

Family income

Public Public Private Private

2-year 4-year not-for-profit for-profit

4-year less-than-4-year

1989–90

    Total 15.5 52.4 28.0 4.1

Lowest quarter 16.4 47.0 28.0 8.7

Lower middle quarter 19.7 53.5 22.8 4.0

Upper middle quarter 15.5 56.4 25.2 2.9

Highest quarter 10.6 52.4 35.7 1.3

1999–2000

    Total 19.4* 51.3 27.0 2.4*

Lowest quarter 24.7* 47.4 22.9* 5.0*

Lower middle quarter 22.3 51.9 23.8 2.0*

Upper middle quarter 18.6 51.7 28.0 1.7*

Highest quarter 12.6 53.9 32.6 0.9

*Represents statistically significant change from 1989–90.

NOTE: Detail may not sum to totals because of rounding.

SOURCE: U.S. Department of Education, NCES, 1989–90 and 1999–2000 National Postsecondary Student Aid Studies (NPSAS:90 and NPSAS:2000).

Thought QuestionsWhat trends do you notice in the

ten year span for the data?

How do these trends differ by institutional type?

What do these trends indicate for planning?

Patterns of Finance--JohnstoneTotal Resources

◦Shifts in last 10 years?◦Vision of higher education?

Productivity◦Measure learning?◦Faculty productivity?

Sharing of burden of costs◦Parents/students◦State/public

Radical Changes

TuitionAidRevenuesLearningTechnology

Future Questions

Paradigm ShiftPartnershipsValue of degreesMission creepProfitabilityGiving