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Need-based aid key to keeping college affordable and accessible (Feb 10, 2010)

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Feb 10, 2011

University of Wisconsin System Board of Regents
February Meeting
Day One News Summary

February 2011 Day 1

Need-based aid key to keeping college affordable and accessible

MADISON – Contrary to popular perception, the average net price that students pay for college tuition and fees is actually less today than it was five or even 10 years ago.

However, that does not mean that college is necessarily more affordable for today’s college students, independent higher education analyst Sandy Baum told the University of Wisconsin System Board of Regents Thursday.

“When we think about the affordability of college, we have to look beyond tuition and fees,” said Baum, who has written extensively on issues relating to college access, college pricing, student aid policy, student debt, affordability, and other aspects of higher education finance.

Other factors driving the increase in the overall cost of a college education are higher room and board and other college-related expenses, some of which are not within a university’s control.

Ultimately, what makes a college education affordable is a combination of factors, she said. “What you can afford depends not only on how much money you have and how much whatever you’re trying to buy costs, but it depends on your priorities,” Baum said.

In looking at college costs, Baum highlighted the importance of drawing a distinction between “sticker price” and net price.

Baum pointed out that for 2010-11, the national average published price – the “sticker price” – for tuition and fees for an in-state student at a four-year public institution is $7,610. The average net price – the price actually paid by a student after subtracting grant aid – is $1,540.

With so much financial aid available, sticker prices aren’t really the best measure of how affordable it is to go to college, she added. Some people will pay the full amount; others will pay nothing. But sticker price still matters, she said, particularly for those who are paying that full price or for those scared off by it from looking any further.

“Realizing the differences in what people can afford is very, very important,” Baum stressed.

Baum said that declining incomes and depleted savings have had a significant impact on people’s ability to afford college, and more students have need. Universities have to recognize this as a real problem, particularly given the perception, or misperception, that college is increasingly less affordable. 

“It really matters who’s getting the grant aid, whether it’s doing anything to improve affordability or not,” Baum said.  

According to Baum, over half of the grant aid provided nationally by public four-year institutions is given to students who could afford to pay for their education without assistance.

This has consequences that higher education policymakers must recognize, she said. “To the extent that we have people who can’t afford to pay, we have to ask, what are the purposes of aid and are they being appropriately targeted?”

The result of college prices going up and available aid being directed to people who don’t need it is more student debt, Baum said, with lower-income students forced to take on loans.

She noted, however, that while student debt levels make for attention-grabbing headlines, fully one-third of students graduating with bachelor’s degrees do not have any debt. The other two-thirds have debt typically in the $20-25,000 range.

That debt level should be weighed against the well demonstrated payback of a college education, she said. Baum acknowledged that there are students who borrow truly daunting sums. “It’s a real problem for those individuals, but it’s not typical,” she said. “The solution is to get those students more information, get them making better choices, and taking out federal loans not private.”

Baum told the Board that even after adjusting for inflation, the total volume of grant aid nationwide has increased dramatically. However, that increase has been offset by the rapidly growing number of students requiring that aid. 

While Wisconsin is generally a need-based aid state, that’s not true all over the country, Baum pointed out. In the U.S. as a whole, about one-quarter of grants given by states to students are not need-based.

The difference between need-based and non-need-based aid is really important in terms of whether the money makes a difference in terms of making college affordable, Baum said.

“We need to think how we can finance to increase opportunities and increase access and success,” she said.

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Board urged to take role in changing alcohol culture on campuses

Wisconsin’s long-standing and entrenched “alcohol culture” makes the challenge for universities dealing with drinking on campus even more difficult, but addressing that challenge has major payoffs, according to an expert on college educational programs.

Brandon Busteed, founder and CEO of Outside the Classroom, told the Board of Regents that alcohol use on campus can impact a range of a university’s major priorities, including retention and completion rates.

Busteed told the Board that national studies find “undeniable evidence” of the link between alcohol use and academic performance: more specifically, the more a student drinks, the lower his or her GPA. There is also a direct correlation between frequency of binge drinking and missed classes and falling behind in school work.

According to Busteed, 27% of college dropouts nationally are alcohol- and drug-related. That has a significant economic impact, he said. Looking at the UW System, Busteed pointed out that that if just 10 to 20% of college dropouts are alcohol-related – considered a conservative estimate – that would translate into a $13-27 million loss in tuition revenue for the University. At 30%, the tuition losses could be $40-50 million.

Busteed reassured the Regents that his tidings were not all bad. He said that recent national studies point to a growing number of young people abstaining from alcohol use. Calling it the most pronounced trend in 30 years of reporting on the topic, Busteed said that campuses must heed this shift by providing a campus culture that fits with their interests.

He urged governing boards to provide “behind the scenes” support to chancellors and other visible support for addressing the issue. He suggested articulating alcohol initiatives as a priority in strategic plans, and creating accountability measures with annual progress reports.

Addressing UW System’s ongoing efforts, UW-Parkside Chancellor Deborah Ford, chair of the UW System’s Alcohol and Other Drug Abuse (AODA) Committee, told Regents, “We know that alcohol use and abuse negatively impacts students’ ability to succeed in college…with long/term problems that are deeply woven into the culture of campuses and more.”

She noted that three previous AODA surveys have been administered, and the fourth will occur this spring with the results to be reported back to the Board. Ford also noted that a UW System philosophy statement is being prepared. “We believe we need a unified voice about alcohol use and abuse on our campuses,” she said.

In response to Regent David Walsh’s question about creative options in addressing the problem, Busteed cited several tested tactics such as taking regular class attendance, offering more Friday classes, and focusing more on academic rigor.

Regent President Chuck Pruitt commended chancellors for the “extraordinary work” on these issues, particularly in the face of budget pressures.

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Education Committee

Education Committee looks at four-year degree-completion initiatives

As part of Senior Vice President Rebecca Martin’s report, the Education Committee heard an update on campus initiatives designed to aid undergraduates in completing their baccalaureate degrees in four years.
Martin reminded the committee that about a year ago UW System President Reilly began talking to the Board about four-year degree-completion programs being able to save undergraduate students and their families about $15,000 in tuition, room, and board costs. Reilly had urged the UW System to find ways to promote these programs.

While these programs are not right for every student, efforts are being made to raise awareness with prospective students and their families that they exist, said Martin. For example, the UW System’s advising service, called UW HELP, produces the publication Introduction to the University of Wisconsin System that includes a section on graduating in four years under Majors & Careers.

The goal, said Martin, is to have four-year degree-completion plans in place for most of the majors at most of the campuses by the end of the year.

Proper planning is critical for students to complete course requirements in four years for eligible programs, she said. The committee discussed how a culture change may need to take place on campuses to encourage students to take advantage of the four-year degree opportunity. In addition, according to a UW-Eau Claire study cited at the meeting, students who take part in internships and study abroad opportunities are more likely to complete their degree in four years.

Campuses report on precollege program results

The Education Committee heard from two UW institutions on their precollege programs dedicated to ensuring access and enhancing the college readiness of underrepresented minority students and economically disadvantaged students.

UW-Madison discussed the PEOPLE program (Pre-College Enrichment Opportunity Program for Learning Excellence), founded in 1999. It is creating a “true pipeline” of college-ready elementary, middle school, and high school students, said UW-Madison Assistant Vice Chancellor for Equity and Climate Ruby Paredes.

Kate Oganowski, program coordinator for precollege programs at UW-La Crosse, said their three programs are in such demand that they have waiting lists at every site. They are looking for ways to increase funding, she said.

“These programs sound very successful,” Regent Judy Crain said. “They do make a difference, and we need more and more. You outlined some of the problems getting there.”

Senior Vice President Rebecca Martin emphasized the importance of the assessment component of precollege programs to provide data on how many students who participate in precollege programs attend and graduate from a UW institution.

 “These programs are critical to meeting our goals for more graduates and closing the achievement gap,” Martin said.

In other business, the Committee:

  • Approved implementation of the Master of Fine Arts in Design degree at UW-Stout;
  • Approved contract renewals for the Seeds of Health Elementary School and the Milwaukee College Preparatory School-Metcalfe Park Campus, overseen by UW-Milwaukee’s Office of Charter Schools, and the 21st Century Preparatory School, UW-Parkside’s lone charter school; 
  • Approved UW-Milwaukee Office of Charter Schools’ recommendation to authorize as new charter schools the Milwaukee College Preparatory School-Lindsay Heights Campus, and the Milwaukee Scholars Charter School; and
  • Heard a report from UW-La Crosse on its efforts to strengthen the campus’s commitment to equity, diversity, and inclusion. (See the presentation).

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Business, Finance, and Audit Committee

State Auditor Jan Mueller gives UW System clean bill of health

Associate Vice President for Financial AdministrationJulie Gordon presented the Business, Finance, and Audit Committee with the UW System’s annual financial report for Fiscal Year 2009-10, saying, “The UW System ended the year in a slightly better financial situation than when we started it.”

According to the report, state support decreased from the previous year by $37.7 million (3.7%), tuition revenue increased by $73.1 million (7.8%), federal grants and contracts increased by $80.0 million (10.9%), state, local and private grants and contracts increased by $66.8 million (22.4%) and gifts decreased by $17.8 million (7.1%).  

For the first time in the last 10 years, state appropriations were less than tuition and fees. State appropriations currently comprise less than one-quarter of the total revenue (20.9%). Tuition and fees represent 21.7%.

Total expenses from all funding sources increased in Fiscal Year 2009-10 by $117.3 million (2.8%), compared to the prior year’s increase of $245.8 million (6.2%).

The financial report included a clean, or “unqualified,” opinion from State Auditor Jan Mueller and the Legislative Audit Bureau. Mueller was on hand to brief the Regents on her agency’s review.  Financial Audit Director Carolyn Stittleburg from the Bureau said it identified several technical accounting issues to be addressed by the UW System.

Responding to a question from Regent Mike Falbo, Senior Vice President Michael Morgan told the Committee that a follow-up report on how the accounting issues have been addressed will be provided in coming months. 

Human Resource System (HRS) to launch in April

Senior Vice President for Administration and Fiscal Affairs Michael Morgan told the Business, Finance, and Audit Committee that the UW System Human Resource System (HRS) project is on-time, on-budget, and should be ready for launch in April. 

“It’s going to be a very busy month, but I think we’ve done all the necessary work to assure ourselves we’re prepared to go forward,” Morgan told the Committee. “I think our team has done a really good job of working through all the scenarios and testing so this is a well functioning system.”

April 7 is the date when the UW System will move away from the previous Legacy infrastructure and over to the new system, although the old system will not be completely shut down. 

Before going live, there will be additional testing of technical readiness, ensuring all campuses are prepared, and installation of necessary staffing.

“There’s been a lot of layered effort to ensure that we when launch in April, we get it right,” Morgan said.

BF&A Committee approves differential tuition proposals

The Committee approved an increase in the UW-River Falls Falcon Promise, the institution’s existing undergraduate differential tuition, effective Fall 2011. The change would be phased in over three years and would increase the differential from $72 to $100 per year in 2011-12, $130 per year in 2012-13, and $160 per year in 2013-14 when it is fully implemented. 

The key focus areas for this differential include enhanced library services; the Testing and Tutoring Center; undergraduate research opportunities; and the Falcon Scholars scholarship program for study abroad and/or undergraduate research. The outcomes of the proposed differential will be presented to the Board for review in five years. 

UW-River Falls Chancellor Dean Van Galen told the Committee, “The overarching goal of the Falcon Promise is to increase student retention and success.”

The Committee also approved an increase in the UW-Superior Experience, the institution’s undergraduate differential tuition, effective Fall 2011. The requested change would increase the institution’s differential from $207 per year to $237 per year.  Key focus areas for this differential include technology enhancement; the Jim Dan Hill Library; and Career Services. Outcomes of the proposed differential will be presented to the Board for review in four years.

The Committee also approved a new undergraduate program differential, the UW-Superior Natural Sciences Differential. The proposed differential would add a $12 per credit charge to all courses in the UW-Superior Department of Natural Sciences beginning in Fall 2011.  This differential would replace all special course fees in the Natural Sciences and be used to support laboratory supplies, equipment and equipment maintenance, and student field trip experiences. The outcomes of this differential would be presented to the Board for review in four years.

In other business, the Business, Finance, and Audit Committee:

  • Discussed highlights of the Annual Trust Fund Report by Senior Portfolio Analyst Tom Reinders. See the Annual Trust Funds Report;
  • Heard the proposed 2011 Review and Audit Plan of the UW System Office of Operations Review and Audit, which includes the following major reviews: Undergraduate Academic and Career Advising, Social Media, and Employee Wellness Programs. It also includes follow-up reviews on policies affecting students with learning disabilities, NCAA Financial Reporting at UW-Milwaukee and UW-Green Bay, WUWM-FM 89.7 Financial Statements Audit, and NCAA Division III Programs.
  • Heard a report on highlights of a recently completed summary of student involvement and consultation in the allocation of segregated university fees.
  • Received an update on non-resident tuition programs and reauthorized the Return to Wisconsin Program;
  • Heard a report on Quarterly Gifts, Grants, and Contracts (2nd Quarter);
  • Heard a brief overview of the UW System Information Technology Strategic Plan, entitled The Common Systems Roadmap, from Associate Vice President for Learning and Information Technology Ed Meachen. A copy of the full plan can be found at http://cs.uwsa.edu/documents/CommonSystemsRoadmap%28Sept10Update%29v1.2.pdf .  In addition to the overall UW System plan, each institution is required to develop a plan for its local systems and projects.  Copies of those plans can be found at: http://www.uwsa.edu/olit/cio/ITplans/;
  • Heard a brief overview on requested revisions to Wisconsin Administrative Code Chapter 19 relating to the reinstatement period for sick leave benefits to be in line with those established by the State of Wisconsin for classified staff;
  • Heard a report from Ed Meachen, as part of a status report on major IT projects, that the Student Information System at UW-Eau Claire is completed, and the Legacy Budget System project remains on target with respect to schedule, scope, and budget; and
  • Approved resolutions granting UW-Madison authority to recruit a Dean of the Law School and a Dean of the Business School at a salary above 75% of the UW System’s salary.

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City and County financial support of UW Colleges

In a joint session, the Business, Finance, and Audit Committee and the Capital Planning and Budget Committee heard the annual report on City and County Financial Support of the UW Colleges. Local municipalities provided $9.4 million of financial support to UW Colleges in 2010.

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Capital Planning and Budget Committee

Associate Vice President Miller reported to the Committee that the Building Commission approved about $32M for projects at its December meeting. The funding breakdown for those projects is approximately $20M General Fund Supported Borrowing and $12 M Program Revenue Funds.

In other business, the Capital Planning and Budget Committee

  • Approved UW-Madison’s request for authority to lease space for the UW-Madison Grada state-of-the-art facility for the quarantine and holding of nonhuman primates as required for campus researchersuate School, providing ;
  • Approved UW-Madison’s request for approval to acquire 75 acres of land in the Town of Middleton for the future expansion of University Research Park II;
  • Approved UW-Madison’s request for authority to accept a gift of six acres of land from the University of Wisconsin Foundation. The parcel of wooded property is undeveloped and is located adjacent to conservancy land owned by the Board of Regents and managed by the UW-Arboretum;
  • Approved UW Hospital and Clinics Authority request for approval to construct an Autopsy and Pathology Suite located in the Wisconsin Institutions for Medical Research Building;
  • Approved UW-Green Bay’s request for authority to use funding provided by the UW Foundation and a federal grant from the U.S. Fish and Wildlife Agency to purchase three parcels of land totaling 61.78 acres. These parcels will link existing conservation lands and create opportunities to study long-term effects on bird migrations, water quality, and evolving habitat communities;
  • Approved UW-Whitewater’s request to adjust the budget and construct the Multi-Sport Facility – Phase III project, providing a two-story structure within the university’s Multi-Sport Facility to support the university’s softball program. The project will be partially funded through the use of a student-approved $5.22 annual increase to student segregated fees for a term of ten years.
 

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The UW System Board of Regents will resume its February 2011 meeting on Friday, Feb. 11, at 9 a.m.
in Van Hise Hall, at 9 a.m.

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Related: February 11 (day 2) news summary