The University of Missouri and the Harry S. Truman School of Public Affairs at MU co-sponsored a Symposium on Higher Education Financing July 25-26 in Columbia. The focus of the sessions was to provide policymakers and the public with a glimpse of national issues related to higher education financing, how other states have approached funding, and to provide perspectives of lawmakers in Missouri. Nearly 100 individuals from across the state, including many legislators and higher education leaders, were in attendance.
Visit the links below for summaries of each session:
University of Missouri President Elson S. Floyd welcomed conferees to the Symposium on Higher Education Financing. He said the Symposium, which was organized by the Harry S Truman School of Public Affairs, was inspired by discussions within the Missouri higher education community and in the Missouri General Assembly regarding state and national trends in higher education finance and the future of Missouri's higher education infrastructure. He noted the attendance of national experts in higher education finance, state legislators and legislative staff, and top leaders from the state's public universities. The Symposium affords conferees with an opportunity to review the current factors that guide how higher education is funded in Missouri, look at issues of affordability for students and their families, and begin thinking about best practices that can be applied in Missouri.
"We know that there has been a lot of instability in Missouri's system of higher education," Floyd said. "We know that we have not been able to predict with accuracy where we are going both now and into the future. It is our hope that we will be able to engage in a very broad and active conversation about that going forward." Floyd expressed the hope that the Symposium would stimulate an active and thoughtful public policy dialogue about the costs and benefits of education, whether the discussion was about four-year institutions or two-year community colleges.
A key theme of Dennis Jones' presentation was the challenge of identifying statewide goals and tying higher education funding policy to the notion of meeting those goals. A secondary theme focused on Missouri's difficult economic situation and the lack of public support for increased taxation.
According to Jones, most states develop higher education budgets incorrectly. The emphasis is not on how higher education is meeting state needs, but rather on "who gets what."
Higher education policy is becoming more oriented toward the public agenda. "Institutions have their plans and budgets and have to be assessed and held accountable, but at the next level there are questions about what are the state's priorities, how does the state put dollars behind those priorities, and what does accountability look like juxtaposed to that set of priorities?" Jones said.
Noting his previous work with the Missouri Business and Education Partnership and the Governor's Commission on the Future of Higher Education, Jones said that in both cases they attempted to focus on priorities. "I think it is safe to say those were very hard sells in the state of Missouri," he said. "The notion of trying to build consensus around a set of statewide priorities that higher education could serve, rather than as institutions that could receive, was a very difficult and in some ways futile conversation here."
All states have some common higher education goals: high school completion; getting high school graduates to attend college; achieving a strong graduation rate; and then having those graduates stay in the state and gain employment in fields that help the economy. Missouri does not have an economy to support the graduates the state is producing. Noting his past research in Missouri, Jones said "one of the priorities we promoted was the expansion and diversification of your economy. The economy you have is not big enough to sustain continued support for higher education or a high quality of life for your citizens."
Like most states, higher education in Missouri faces increased competition from other areas of state government, particularly Medicaid and elementary and secondary education. Although many institutions have increased private fundraising and grants, those items only serve to support specific programs, not general operations. "What it boils down to is how much does an institution need, and who is going to pay for it - the students or the taxpayers?" Jones said institutions cannot look to private funds to fill the gap between what is needed and what comes from the state and student fees. "Those funds are gravy, they help, and they often provide the margin of excellence, but they are not what keeps the railroad running."
Another challenge is that legislators and governing boards have very different goals and timetables. "There's always a tug of war about what goes first, tuition or appropriations," Jones said. "Seldom is there consensus about what we are pursuing and how does this policy link to that pursuit."
Jones noted that many states look at funding per student, or FTE levels, to measure growth or success and in some cases this is used to drive funding formulas. Often the count is made after the third week of the semester, "which provides an incentive to recruit students, but there is no incentive for them to be successful." The British do the calculation at the end of the semester and count course completions. "That sets a very different message, a very different set of expectations, as to what you are trying to accomplish," he said. "It is the same amount of money being put into the system, but at one end they are rewarding success, the other is simply rewarding activity. How the money flows, and what you use as the matrix, is important in this conversation."
Jones emphasized that policy must be affordable both for the student and the taxpayer, as well as be transparent. "When you look at it, you have to know what is driving it," Jones said. "If legislators can't see what's going on in the black box and how tweaking this changes this over here, then it will not have a lot of credibility." Policy also must reward responsiveness and creativity, and provide some support for meeting state needs.
Nationally, there are many examples where tuition has been going up as state appropriations go down, as has been the case in Missouri. The amount higher education receives is normally determined by the amount left when everything else is taken off the table. "Higher education is the budget balancer - it's the piece that has a third party payer called the student," Jones said. "Criminals don't pay their share, but students do. And that's the one place where states can offset part of their expenditure to somebody else." As a result, higher education gets hit hardest when the economy is bad, but it also can sometimes gain the most when the economy is good. However, in the current economic turnaround most of the increase in funding for higher education is focused on capital improvements - bricks and mortar - not operating expenditures.
A successful higher education policy requires three things: a clear sense of state priorities; support to create and maintain the necessary capacity; and alignment of policies related to institutional support, tuition, state student financial aid, and institution-based financial aid. Jones said we have a lot of work to do in Missouri and in the nation. Only 29 out of every 100 ninth graders in the U.S. finish a four-year degree in a reasonable amount of time. Globally, the U.S. ranks 11th in the percentage of 25-34 year- olds with a baccalaureate degree. By the end of the decade, the U.S. is projected to be in 17th place. "We are well on our way to becoming a second-class economic power," Jones said.
Jones noted several statistics about Missouri, which has less tax capacity than the U.S. average and a tax effort slightly below the national average. "The reality is that this is not going to change," he said. "The notion that we are going to solve things by raising taxes is not a popular suggestion, and I don't know of any person running on that platform, unless they are talking about sin taxes." Jones said if Missouri is to increase its state funds for higher education, it will have to be because the state grows its economy, not because it taxes more. "That is why the notion of building an economy that is stronger and broader is very much in the self-interests of the higher education institutions. You must make that case to the legislature as to why that is important," Jones said.
All 50 states have structural deficits, meaning their current tax structures will not support current services over the next 8 years. Missouri is in the mix of states where higher education will have increasing competition from other sectors.
Missouri is in the bottom half of states in the percentage of state appropriations that go to higher education. However, if the state combines tuition dollars available to institutions with state appropriations, the state is in the high end. Missouri has a high proportion of students at four-year institutions that are generally more expensive. It is not expected that the situation will change, as the state does not have large numbers of students coming down the pipeline.
There is a great deal of interest among higher education institutions across the country about what has happened in Colorado. The state enacted a change in how it funds higher education institutions so that state appropriations flow through the students and then to the institutions. Although many have characterized the change as a move toward the voucher system, Teck argues that in reality it was simply a "bookkeeping trick" to avoid more catastrophic cuts in higher education that the spending limitation would have required.
Colorado voters passed the Taxpayer Bill of Rights, also known as TABOR, in 1992 in response to several years of increasing taxes. It limited the amount of revenue the state could spend, tying the index to inflation and population growth. It did not have a great impact in the 1990s because of a robust economy, but by the late 1990s the state was forced to refund significant amounts of revenue to taxpayers very similar to what had happened in Missouri.
When the recession hit in 2001, things changed and over the next two fiscal years the state saw reductions in revenues of more than $1 billion. Public higher education institutions saw a decrease from a high of $770 million in FY 2002 to $580 million in FY 2005. As a result, institutions increased tuition, although tuition also was limited by a cap. In addition, Colorado voters passed Amendment 23 in 2002, which required that elementary and secondary education receive increased revenues of inflation plus one percent annually for a 10-year period.
Since Colorado counted tuition for higher education as state revenue, increases in tuition on one end of the equation resulted in a need to further reduce higher education appropriations on the other to avoid further triggering the refund mechanism. Higher education saw 21 percent reductions at a time when enrollment was increasing at most institutions.
"So we had a real problem," Teck said. "We couldn't increase tuition because of a refund demand set upon us by TABOR. We had decreasing money going to higher education so schools had to do more with less because of increasing enrollment. We couldn't change TABOR without a vote of the people. So we were trying to figure out a way to get around this problem to salvage our higher education system."
The answer came in the form of SB189, which took advantage of a loophole in the TABOR language that said any entity that received less than 10 percent of its revenues from state or local government was considered an "enterprise" and thus was not subject to the constraints of TABOR. Teck and others argued that if the state provided higher education funds to students, and then the students in turn gave that money to the schools, those funds were not state appropriations and this would remove the institutions from TABOR restrictions.
"So the real genesis of SB189 was a bookkeeping arrangement to try and get us around the constraints of TABOR," Teck said. He also said an added goal was to help students realize and see the value of continuing their college education in the hope that more of them would choose postsecondary education. SB189 passed, and this is the first year that the new funding arrangement has been in effect.
But Colorado's larger budget problems still exist - Teck said they estimate a $2 billion deficit over the next five years. In November, Colorado voters will consider a measure that would relax TABOR requirements for five years and allow the state to keep excess revenues to address the shortfall.
"If we do not get that passed," Teck said, "there is a very great probability that we will be the first state in the nation to entirely defund higher education."
Gonzales profiled the funding model for higher education used in Texas, which includes a weighted matrix based on credit hours taught and includes incentive funds to reward institutions that address state priorities.
Texas operates on a two-year budget cycle and divides the higher education pie into three sections: instruction and operations (62 percent); infrastructure (13 percent); and special items (25 percent), which reflect priorities related to state needs.
The instructions and operations budget supports faculty salaries, student services, research and administration. The infrastructure budget supports utilities, maintenance and repair, and operations, as well as designated funds for smaller institutions.
The operations funds flow through a formula that is based on weighted semester credit hours taught, and uses a three-semester timeframe. Weights are allocated based on five basic levels: lower undergraduate, upper undergraduate, master's, doctoral and professional. An undergrad liberal arts course, for instance, carries a weight of 1.0. Engineering and law carry weights of 3.0 A doctoral course carries a weight of 18.0.
The matrix was developed on a cost-basis that reflected what the state was spending on the programs at the time the formula was developed. The matrix includes a guarantee that no institution would lose more than 3 percent of its prior year funding reflected in the weights. The amount of money in the formula is based on how much funding the legislature has available.
The model used for infrastructure was based on the predicted square feet needed for the institution to meet its educational and mission-related goals. These are determined by the department of higher education and the process is designed to reward efficient use of space.
The Texas plan also provides incentives to institutions who teach undergraduate courses with faculty instead of teaching assistants.
When Texas faced revenue shortfalls in 2003, the legislature adopted tuition deregulation to give institutions some flexibility from the capped tuition of the past. That led to two years of double-digit increases and renewed calls from the legislature to cap tuition again. "It did not happen, but they came very close," Gonzales said.
Institutions are insulated from being punished for raising tuition in that revenues from fees cannot be used to reduce general revenue appropriations. There also is a set-aside from the tuition amount of about 20 percent that must be used for financial aid.
In 2003, Texas enacted the "Be On Time" student loan program. Students who take the recommended high school curriculum and then graduate in a timely manner from college with a B average can have their loan forgiven. Because of the popularity of this program, Gonzales said the legislature is looking at financing it through the issuance of bonds.
Some institutions in Texas are also operating under a flat tuition model, where semesters are based on a flat 14 credit hour price. The incentive, Gonzales said, is to encourage students to take more than 14 hours in order to graduate on time.
Rep. Bearden profiled HB742, legislation he filed in the 2005 session to establish a more student-centered funding model for higher education in the state. Although the plan borrowed from some of the Colorado model, Bearden emphasized that it has two primary differences: it first establishes a baseline level of funding that no institution would go below, and it also does not have any impact on capital appropriations.
Bearden's first goal is to bring higher education funding levels back to FY 2002 authorized levels, which are slightly over $1 billion. "We never got there," Bearden said, "We set the appropriation but spending never got to that point, and, in fact, went the opposite direction as many of you know."
Once the FY 2002 level is reached, Bearden's plan would start a new formula for funds above and beyond the FY 2002 levels where students would be the focus. The funding students would receive would be portable and could be used at either public or private institutions.
Bearden said one section of the bill that will be changed significantly will be the restructuring of financial aid. "The Coordinating Board is already undertaking a lot of what I had in there, and I also think there has been some misinterpretation or misapplication of the intent of student aid that would occur through the Gallagher model." Bearden said his idea is to provide the same amount of need-based aid to all students through Gallagher. The student would take the scholarship to whatever institution they desired, as long as the amount did not exceed the cost of attendance.
"My intent on financial aid was to try and boil down a lot of the different scholarship programs," he said. "I am concerned that the need-based aid we get is not keeping pace with the merit-based aid, and I think in today's economy we need to take a look at that."
He then described the parameters of the new student-based funding model. He emphasized that the model would not be in effect if operating funds fell below the FY 2002 levels. His concept also includes some incentive funds for performance, but he said he did not specify what those measures would be because he intended for the institutions to develop them.
Noting the old Funding for Results model under the CBHE, he said he wanted to see that revisited. "It's been 10 years since we did those, and I think it's fair that we look at those and reallocate those and make that a more active process so that those become the performance measures that would be subject to some additional funds above and beyond the funding formula and FTE funding."
He said he was open to working with institutions to define the FTE funding model. His original bill provided lowest-common-denominator funding levels for the first two years of college at the community college level, the second two years of college at the lowest-cost four-year college level, etc. "Those were put there to stimulate discussion," Bearden said. "And so that is very open and not cast in concrete. Hopefully as we get through the interim committee we will be able to focus on that a bit more and make it more definitive."
Bearden's plan would free institutions from some regulations that currently exist, including some of the program review and approval functions of the Department of Higher Education. "There is some good and bad with that," he said. "One public concern is duplication of programs. Some of that is inevitable, but how much is really necessary? So we won't completely eliminate that review process."
The bill also establishes a joint House-Senate committee. "One of the things the legislature suffers from is that we do not have a continuity of understanding of what happens in the higher education community, and so the joint committee was really meant to establish that so we can come together and become the pool of expertise on the subject," Bearden said.
He also said an interim House committee would be established to review higher education proposals in more detail.
State Representative Beth Low questioned Senator Teck of Colorado about the flat $2,400 funding that Colorado students receive, asking if it is the same regardless of where the student goes. Teck said it is the same unless it exceeds the cost of attending.
Low questioned whether students that attend private institution receive the same amount. Teck said the amount is cut in half for private schools but those students would receive $1,200 in formula funds. "There is some controversy over using taxpayer dollars for students who attend private institutions," Teck said.
Low questioned whether those funds might potentially have gone to the public institutions and thus lowered the need for tuition increases.
"It is diminishing the amount of money we have available to give to public institutions," Teck said. "The argument is to get kids educated and whatever we can do to help facilitate this we are going to try and do. Yes, we will be taking money away from public institutions, but we want to focus on our greater goal and that is educating our kids."
Low said it appeared to her that the model used in Colorado takes funds away from the public institutions that are the "best shot" for lower- to middle-income kids who need the financial help and can't pay the higher tuition.
"That is the political side of the argument," Teck said. "There was a hard push from the lobby of the three private institutions that they wanted to have some of the action."
Bearden added that "one good part of my proposal is that it does not take money away from the public institutions."
Charles McClain provided conferees with a historical perspective and some context on higher education policy issues and decisions going back more than a decade. He also described the advantages of a higher education system that is driven by incentives, competition and autonomy.
As Mephistopheles said in Goethe's Faust, "Everything that rises goes rightly to its ruin." And so it has been with public higher education in Missouri. At the urging of the General Assembly, the governor appointed a commission in the early 1990s called the Higher Education Business Partnership to study higher education. The study, which was conducted by Dennis Jones of the National Center for Higher Education Management Systems, eventually led the General Assembly to approve placement of a referendum item on the ballot called Proposition B to raise tax revenue for higher education. Funding for K-12 was added to broaden the measure's appeal, but the proposition still failed at the polls by a 2-1 margin.
The focus then shifted to the courts. Circuit Judge Byron Kinder, Cole County, issued a ruling in 1993 that provided the impetus for the redesign of the school foundation formula and a proposed new tax measure to pay for it. The tax measure, identified as Senate Bill 380, was meant only to fund elementary and secondary education. "Senate Bill 380 included a very clever tax increase," McClain said. "Just limit the exemption of the federal income tax on the state income tax form to $5,000 for a single tax return and $10,000 for a combined return, plus some modest corporate tax increases. Prior to the proposal, all of the federal income tax paid was allowed as a deduction on the state return." The measure was passed by the General Assembly without a vote of the people, despite the fact that earlier promises had been made that no tax increases would be made without a popular vote.
Passage of the new tax without a public vote sparked a firestorm of protest led by the Missouri Farm Bureau, which held a press conference to announce that they would start an initiative petition to limit the amount of new taxes that could be passed by the General Assembly without a vote of the people. Governor Mel Carnahan joined the Farm Bureau in the successful effort to pass the constitutional amendment.
Due to the booming economy of the late 1990s, Senate Bill 380 was more successful in raising revenue than was anticipated by its authors, triggering refunds under the provisions of Hancock I. To minimize the need to issue annual refunds, the legislative leadership passed a series of measures that exempted food from the state sales tax, among other exemptions, thus reducing the amount of revenue coming into state coffers. Then the economic bubble burst, led by the events surrounding the destruction of the World Trade Center, and state tax revenues plummeted. With new tax measures effectively stymied, funding for public education was reduced in successive years to meet the rising cost of the Medicaid program.
In FY 2004, according to one study, elementary and secondary education received 26.1 percent of the state's operating budget. The Missouri Constitution provides for elementary and secondary education to receive 25 percent of the budget; nevertheless, the public school districts are back in court to argue that they are not being adequately funded while higher education continues to lose state financial support as the state shifts funds to other sectors of the state budget.
Having completed his brief historical review of higher education finance during the past 15 years, McClain described some concepts that can enhance creativity and innovation in higher education, including incentives, competition and autonomy.
As a part of the work on Gov. Blunt's Commission on the Reorganization of State Government, the task force on education has had conversations with several other states that have been studying higher education governance and finance. Each of these states has considered using financial incentives to achieve state goals. One state task force studying higher education wrote the following: "The higher education funding formula and other financing of higher education must create incentives for achieving state priorities. The formula should not be focused solely on equity of funding to institutions."
Missouri moved away from an enrollment-only driven formula in the late 1970s. All of the other states the Commission task force visited have and are trying to move toward a weighted funding formula similar in principle to those already in use in Missouri and Texas. An article in the Kansas City Star discussed how Kansas was withholding funds because goals set jointly by the institutions and the state were not met.
The author of the book Higher Learning suggested that there are two familiar ways to keep human organizations attentive to the public good and the public interest. McClain quoted from the book: "One is regulation and the other is competition. Neither is perfect. Government regulation and control have not worked well to improve the quality of education. Not for American public schools and not for universities abroad, which are controlled and regulated by central governments. Competition, by contrast, produces diversity, experimentation and creativity."
"According to the author of Higher Learning, nothing in the experience of our public schools, and nothing we can discover overseas, where universities are controlled by the state, suggests that stronger regulation will improve the practice of teaching and learning in our colleges and universities," McClain said.
McClain said that Missouri has been and continues to be an innovator in many ways, and this has happened through the wisdom of the General Assembly and governors who kept higher education off the numbers game and the equity discussions, which tend to produce mediocrity. He said a decentralized system of higher education with a funding formula that contains incentives and is not purely enrollment driven offers distinct advantages over other approaches, such as regulation.
The concepts of competition and autonomy give us organizations that are innovative and creative. "Missouri would be a pioneer if it would add an incentive component to the funding of elementary and secondary education" McClain said. "Otherwise we shall continue to go down the bottomless trail of adequacy and equity, and higher education will continue to lose ground."
The future of higher education in Missouri will depend on the wisdom, the statesmanship, and the vision of the political leaders in attendance at the Symposium. "Remember, everything that rises, goes rightly to its ruin," McClain said. "I don't think I want to buy that. The power to make corrections was given to us, if we but use that ability with a long view and not the short view, and rise above parochial interests, and think of the common good. Ruin is not inevitable. Prove Faust wrong and yourself right."
Dennis Jones reviewed important trends in higher education to help put Missouri’s experiences in perspective.
Jones noted that we are seeing a significant shift in public policy conversations about higher education, from an emphasis on the institutions themselves to an emphasis on the public agenda for higher education and the needs of the state and its people. Fifteen years ago, governors and legislators would have said that higher education in their respective states was a good thing but not an imperative. Now they seem to understand that higher education is critical to the future of their respective states in terms of the economy and social needs. Today, 80 percent of jobs require some college preparation, and so it is no longer a question of the value of the investment.
A few states have put all the pieces together to effect significant reform in their higher education infrastructure. Kentucky and North Dakota are noteworthy.
Kentucky’s governor conducted an assessment of the resources his state had and concluded that Kentucky was like a third-world country in terms of its people’s wealth, health and educational attainment. He made it the state’s objective to move their per capita closer to the national average. The most decisive step in achieving this goal was to focus on adult literacy. Fully 40 percent of Kentucky’s adult population was functionally illiterate and one half had not completed high school. Kentucky invested enough state funds into the literacy program to make it a state program with some federal support, rather than having it the other way around. The reform was led by a legislative committee chaired by the governor. The centerpiece of the legislative proposal was to form a new community college system from institutions previously under the direction of the University of Kentucky and the state.
North Dakota had a different problem. It was relatively successful in getting its students through high school and on to college, but it was losing its graduates to other states with more and better quality jobs. The leaders in North Dakota decided they had to grow the economy and attract more people to the state. They did it in part by changing the funding mechanism for higher education to emphasize autonomy and accountability. The state generally ensures that 21 percent of the state budget will go to higher education. Accountability was underscored by identifying in statute the measures to be used to assess progress in meeting state needs. Out-of-state tuition was eliminated to attract more students to North Dakota institutions, and the state anticipated that 40 percent of those students would remain in the state after graduation. Business leaders were involved in the debate from the very beginning and were instrumental in the passage of the legislation.
In the states that have had success in changing the higher education situation, the key has been to remain focused. They are identifying their goals, staying the course even during changes in administrations, and keeping their focus on the state’s agenda.
Another trend is the changing role of coordinating boards. Coordinating boards originally arose from concerns about how to control academic program duplication and growth of institutions. The era of institution building is over, and so is the emphasis on overseeing institutions. Now the role of coordinating bodies is to build and manage the public’s agenda for higher education and to identify and dedicate funding to implement those agendas. The coordinating bodies also help to develop the accountability measures and take the lead in devising ways to balance student aid and tuition rates.
Jones said that there also is a shift in emphasis from fiscal accountability to performance-based accountability. Many legislators will tell us that higher education institutions are not accountable to the people of their states for the funds their institutions receive or for progress in achieving state goals. The institutions will say that there has not been a conversation to define just what the public agenda is supposed to be. Jones pointed to the North Dakota experience, where accountability measures were put in the statute to make the explicit the expectations of the legislature and preclude others from defining the terms to meet their own agendas.
Another trend has been the shift in the financial burden from the states to the students. “The shift in most states has been from a high appropriation/ low tuition/ low student financial aid model to a lower appropriation, higher tuition/mixed student aid model,” Jones said. “States have backed into that a little bit at a time without intentionally doing so. It is what has happened to make it work on a year to year basis.”
Jones said some states are experimenting with new forms of relationships between state government and higher education. He noted the increasing reliance on market mechanisms as a substitute for public policy rather than as a mechanism for public policy. Mentioning the concept of education vouchers that go with the student, Jones said that it could be argued that states need not get involved in market mechanisms to shape the workforce. Individual student choice will in fact solve many, but not all, of the problems without intervention. Market devices can be used to entice students to enter certain career fields, such as recruiting nursing students for rural Missouri.
Jones cited several experiments by states that have met with some success. The California State University system has introduced the college placement exam into the junior year of high school. Juniors can take the exam and, if they pass, do not have to take it again. If they do not pass it, they gain a better appreciation of what it takes to do college work, and they still have a year to fill the gaps in their pre-college preparation. In Missouri, 80 percent of the freshmen students come from a relatively small number of high schools that are grouped regionally. Missouri higher education could place its faculty in selected high schools to assist in raising college-bound student achievement levels so they won’t have to do remedial work once they get to college.
Rep. Fares, who chairs the House Appropriations-Education Committee, emphasized the importance of performance and accountability in her remarks to the symposium audience.
Fares said there is a need to align preparatory education with the needs of higher education so that there is less of a need for remedial course work at the higher education level. "All levels of education need to be talking," she said.
Whether students are college-bound or not, Fares said they need to be urged to focus on courses in high school that prepare them for work or school after graduation. She also said higher education must be prepared to address the issue of nontraditional students who change careers and need additional training.
"Because jobs and professions are less likely to be forever, we must offer transferable skills and lifelong training capabilities," she said. "Professional development courses must be geared to helping teachers to address these needs and to help second career entries into the teaching field to grasp the complexities of their new careers."
Fares also focused on the importance of smooth transfer and articulation agreements among higher education institutions. "Having courses that transfer based on the content prescribed and not the ego of academia is essential to a student completing coursework," she said.
She noted that statistics show that students who start at community colleges and then transfer to four-year institutions do as well, or in some cases better, than those who start at the four-year institution.
Sen. Coleman, who serves as minority leader in the Senate, focused her comments on the area of need-based financial aid and the importance of enhancing diversity in higher education.
She said that Missouri ranks 46th in per-capita support for higher education, at $147.01 per person. The national average is $210, and Illinois is at $213. She also gave the state's ranking in comparison of state support for financial aid as a percentage of Pell Grant aid provided to students in the state. Missouri provides 12.3 percent as much aid as Pell grant recipients receive. She said the national average for state support compared to Pell grant support is 40.1 percent. She noted that the state had seen a decrease in state funds supporting financial aid over the past five years.
Coleman stressed that these changes have the greatest negative impact on minority populations in the state. She said only 6 percent of students from lower socioeconomic categories earn bachelor's degrees in Missouri, compared to 40 percent of students from higher socioeconomic categories. "So when you look at where we stand as a nation and we see where the low income and minority students are, there is a big disparity," Coleman said. "That is most distressing to me."
She said that 29 percent of low income students must work more than 35 hours per week. "How can these kids get an education if because of their financial situation they need to work 35 hours a week? That's more than most part-time jobs," she said.
Coleman noted that at the University of Missouri-Columbia, tuition and fees have increased 88 percent over the past ten years. Although a quarter of that increase can be attributed to inflation, the remainder is a result of reduced state funds to higher education.
"Certainly in Missouri we are dealing with a lot of these problems because of our budget situation," she said. "The General Assembly is not funding higher education like we used to."
Noting the value of community college education, she emphasized again that steps need to be taken to make higher education affordable and accessible.
"We are putting too many children at risk of not getting an education, especially when you look at increases in fees like we've seen at the University," she said. "If I had to go to school now I could probably not afford it. So from the General Assembly's perspective we understand the issues here and we will certainly continue to look for ways that we can ease the burden and soften the load."
Rep. Wallace has been traveling the rural areas of Missouri talking about the past session and priorities for next year and shared some of his remarks with the audience. He also emphasized that this is the right time for lawmakers to focus on higher education.
He noted the past session's accomplishments included a new funding formula for K-12, limiting the growth of Medicaid, and improving the worker's compensation and tort reform laws.
"We think these things will make our state more business-friendly," he said. "If you think about what we are going to do next, at the top of my list when I'm down in rural southern Missouri talking is that we have to do something with higher education. If we truly did things to make this a more business-friendly place, then we'd better be ready to have people prepared if we are going to create an environment where we have more jobs and people bringing business to the state."
He said one key issue is funding. "Somewhere along the way I think it's time we addressed that the state has to start picking it up again," he said. "And I don't mean just making higher education take what is left over, but making it a priority along the way to make higher education better."
Recent discussions on new funding formulas or methods are appropriate at this time, but he was reluctant to endorse a per-student funding methodology yet. He also said higher education must take notice of very successful, fast growing institutions and why they are doing so well. He noted Ozark Technical College as an example. "Why are they so successful? Because those young people are going through there and getting a good education and then getting high-paying jobs when they get out," he said. "We have to look at each other and see what we are doing right."
"We're trying to make Missouri be a better place to live, work and stay," he said. "We think we did some things in the last session that move us in that direction. I'm one of those people who says that the next step in ensuring that happens is that we pay a lot more attention to higher education in the next session."
Steve Lehmkuhle, interim chancellor for the University of Missouri-Kansas City, noted the interest from the panel in transfer and articulation improvements and indicated there had been much improvement in that area. He then mentioned a concept of a "community college completer scholarship" that could provide some financial support for students who finish an associate's degree and transfer to a four-year school. Rep. Fares was supportive of the concept and looked forward to further discussions.
Rep. Gayle Kingery (R-Poplar Bluff), chair of the House Higher Education Committee, served as moderator and concluded the session.
"We know that it's time to get started to address the situation of funding," Kingery said. "Higher education has, for wont of a better term, slipped through the cracks over the last three years and we want to prevent that from happening again and try to get us back to a level where we are funded commensurately and adequately throughout our state. Education is the key to economic development and success, and that is our goal. We are going to have to work together just like we have today to reach that level where we come together and we can solve or manage most of these financial problems."