Government Relations

UM Legislative Update Newsletter

April 8, 2005

House Committee considers plan to change higher education funding

Bearden noted the bill was complex and represented a starting point for a dialogue to focus funding decisions more on the student than the institution. The bill would simplify financial aid programs into three basic offerings: one need-based program, one merit-based program and the A+ program. Students who qualify for the programs could take the financial aid to any institution, including private schools.

The bill also ties future increases in funding to an FTE formula that would provide equal amounts of appropriations per student regardless of the student's major or the institution - public or private - he or she is attending. The bill encourages performance contracts with the state tied to new funding, and sets up a joint legislative committee to review and consider the funding of higher education.

Bearden introduced Dr. Richard Vedder, from the University of Ohio and author of the book Going Broke By Degree: Why College Costs Too Much. Vedder explained why he felt higher education by its nature is inefficient and that the only way to increase accountability is to focus the funding on the student. Although he had not read the details of Bearden's bill, he agreed in concept with the plan. His testimony lauded the success of many for-profit higher education institutions such as the University of Phoenix.

During his testimony, President Floyd said higher education welcomed the opportunity to work with Bearden and the General Assembly to look at better ways to provide funding to meet the needs of students and the state. "I believe Rep. Bearden's initiative affords us an opportunity to begin that dialogue in a meaningful way," Floyd said. "I pledge to you my personal support in evaluating models of higher education that can help us achieve our mutual goals of access, affordability and accountability." He welcomed the formation of the joint committee on higher education funding and also applauded the use of performance measures to guide funding decisions.

President Floyd did caution the committee about developing a financial aid program that could lead to increased public funds going to students attending private institutions, and also questioned the FTE proposal since institutions each have very different missions with different costs. He encouraged the committee to review examples from other states, to consult with the higher education community, and to come back with a set of recommendations that meet the goals Rep. Bearden and others have laid out for improvements.

Also speaking for informational purposes was Higher Education Commissioner Gregory Fitch and Southeast Missouri State University president Ken Dobbins, who appeared on behalf of the Council on Public Higher Education.

The committee did not take any action on the bill and plans to consider a substitute version of the legislation in the next two weeks.

Back to index