Category Archives: Uncategorized

State Caseload Forecast Down

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The Washington State Caseload Forecast Council reported earlier this week that caseloads are down in the State – good news! Although very small savings were achieved, Washington will see a $56 million increase in the general fund. Savings are typically achieved when the number of kids in public schools, the number of inmates in prisons, the number of families receiving temporary assistance or medical assistance and/or the number children in foster care, etc.  are lower than expected.

Announced before the health care decision was released by the Supreme Court this week, some forecasters were very uncertain whether these savings would ever be realized. With an affirmation by the Supreme Court, it looks like they are safe for now.

For a full report see the following link: http://www.cfc.wa.gov/Web/20120627_DraftOverviewandNarratives.pdf

Committee meets on GET Program

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The Advanced Tuition Payment, Legislative Advisory Committee met yesterday, June 28 on the health of the Guaranteed Education Tuition (GET) program, Washington’s prepaid tuition program. The State Actuary was on hand to report on its status.  GET has been on shaky ground due to the combined forces of double-digit tuition growth and the falling value of its investments, resulting in the program to be underfunded.  However, after continued popularity with the general public, the Actuary reported that GET is “roughly on track” to be fully funded in 17 years.

The issue of full funding has been an ongoing concern for the Legislature and to those who have bought into the program. The Legislature has remained particularly concerned because a GET contract promises that the State will make up any shortfall in funding. GET began running into funding issues at the start of the recession, and in order to build up reserves, the cost of a GET unit increased this year by more than at any time in the history of the 14-year-old program, jumping from $117 in 2010-11 to $163 this year.

As well as the current health of the program, the committee heard analysis of how the program might be impacted if colleges and universities in Washington implement differential tuition rates. Differential tuition, the practice of charging students different rates of tuition depending on what program of study they chose, has become an issue of concern for the GET program. Institutions were authorized in 2011 to charge differential tuition rates if they so desired, however, the practice has yet to be implemented at any university or college.  Of primary concern at the Legislature is how differential tuition might negatively impact the GET program.

The State Actuary provided analysis of two scenarios. Currently GET has an 80% funding status. A 20% increase in the cost of a GET credit with differential tuition would result in a 67% funded status, and a 50% increase results in a 54% funded status. In order to make this up, the cost of GET credits increases significantly. Currently $163, a 20% increase results in a $257 price tag, and a 50% increase at $521 price tag. Not surprisingly, legislators were alarmed at this rate increase but unable to come to a conclusion. Committee staff members provided a few recommendations on how to proceed, but no final decisions were made. The Committee is expected to meet once more before the fall when recommendations must be made to the legislature.

Congress Reaches Deal on Student Loan Interest Rates, But Loans Still to Become More Expensive

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The U.S. Senate reached an agreement on legislation to prevent student loan interest rates from doubling on July 1.

Earlier this week the U.S. Senate agreed to extend the current 3.4 percent rate on Stafford loans for one year and provide $700 million extra for deficit reduction. The $6.7 billion agreement would primarily be funded from two pension measures.

The first would change how private pension interest payments are calculated. The second would increase premiums for companies participating in the Pension Benefit Guaranty Corporation. The two changes to pension measures would provide $5.5 billion.

The additional $1.2 billion would come from limiting how long a student could receive Stafford loans to 150% of the average time it takes to complete a degree. Currently there is no limit on loans.

The agreement now goes to the House for consideration. The U.S. House previously passed a loan extension bill that paid for the legislation by using funds from a preventative care fund in the health care law.

House leadership is signaling that a vote on the agreement will come early next week.

Despite this deal, college students will still see an increase in the cost of their federal loans.

Beginning on July 1 students seeking an advance degree will be responsible for paying the interest on their federal loans while they are in school and immediately after they graduate.

In addition undergraduate students who take out federally subsidized loans will no longer have their interest covered by the government during the six months after they complete school. This change applies to new loans issued through July 2014.

These students may benefit from the lower interest rate, but they will be charged this interest as soon as they graduate. For students who apply for federal loans next year they will have a higher interest rate – 6.8% – and have to pay as soon as they get done walking across the stage.

HECB Holds Final Meeting

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On June 28 the Washington Higher Education Coordinating Board (HECB) held its final meeting as a state agency.

The meeting focused primarily on the Board’s Call to Action and a dialogue with higher education stakeholders with regard to the current context of higher education in Washington and hopes for the new agency that will replace the HECB on July 1.

The Call to Action focuses on renewing the state’s commitment to serve more students. The call lays out the current context highlighting the reductions in state funding, the benefits of raising educational attainment, and the long-term impact of a disinvestment in higher education.

The call asks stakeholders and policymakers to maintain access and affordability with an eye to the future in this challenging fiscal environment.

As higher education institutions and states nationwide continue to grapple with new funding realities, we again stress the need to find new ways to invest in our children’s and our society’s futures by maintaining our historic commitment to educating all our citizens to higher levels. Institutions and states share this responsibility.

The Higher Education Coordinating Board will be replaced on July 1 by the Washington Student Achievement Council.

 

 

Higher Education Chair Hosts Stakeholder Meeting

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On Monday, June 18 the Government Relations office attended a meeting of higher education stakeholders, chaired by House Higher Education Representative Larry Seaquist on the UW Tacoma campus in downtown Tacoma, WA. Other elected officials in attendance included, Representative Susan Fagan, Representative Hans Zeiger and Senator David Frockt.

Stakeholders spanning the spectrum of the higher education community were in attendance, including, representatives of the four year public baccalaureate institutions, stakeholders from the community college and independent private college sector and students.

Among the topics up for discussion was how to continue to press the legislature and public to keep higher education a top priority, specifically in the 2013 legislative session. Higher education was spared from cuts during the 2012 legislative session and many feel it will be vulnerable as we move into a big budget session. With revenues remaining rather flat (see the most recent economic revenue forecast) and the Washington State Supreme Court’s decision earlier this year that the legislature has not been adequately funding k-12 education requiring significant investment in coming sessions, many are concerned there will be very little money left, if any, to fund higher education.

Stakeholders shared their ideas for keeping higher education a priority, including, continued media coverage of the community. Representative Seaquist also charged the group with thinking about top priorities for higher education and how their importance might be relayed to the general public and policy makers.

The next stakeholder meeting is slated to take place sometime in September after the August primary.

Washington Revene Forecast Stable

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The release of the state economic and revenue forecast today shows signs of stability.

The first official revenue forecast since the Legislature left Olympia shows a small net change in the current biennium’s forecast. Effectively flat, the forecast declined by $16.1 million for the 2011-13 biennium.  A decline also occurred for the 2013-15 biennium – $133 million.

The total increase in revenue for the current budget (2011-13) is an increase of $156 million. However this includes additional revenue that was already accountaed for in the budget passed this year. The forecast projects an increase from the February forecast of $197 million in the 2013-15 biennium.

Within this context, legislative fiscal leaders noted that changes related to funding basic education-this does not include changes in employee compensation-would cost the state approximatley $1 billion in 2013-15, $2.5 billion in 2105-17, and $3 billion in the 2017-19 biennium.

All in all state revenues appear to be flat at this time, though revenues have not recovered from pre-recession levels. Within Washington revenue continues to grow at a slow rate primarily due to a flat construction sector and declining state and local government employment. Looking forward there is a 40% chance of the pessimistic forecast occurring in both this and the next biennium compared to 10% for the optimistic forecast.

With that said, legislators believe that as long as this course forward holds another special session prior to the January regular session is unlikely.

Washington Gubernatorial Candidates Debate

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On Tuesday the Association of Washington Businesses hosted the first gubernatorial debate in Washington.

The debate provided insight into how both candidates would address a range of issues facing Washington. Among the issues highlighted included charter schools, Initiative 1053 repeal, and jobs and the economy.

In addition both candidates spoke to their approach to fund higher education. Inslee spoke to his goal to cap the interset rate for state-backed student loans, expand online courses, and increase partnerships with the state’s premier private colleges.

McKenna focused on the need to stop the erosion of state support for higher education and restore funding levels to their historical average, enroll more in-state students in our universities, and emphasize degree programs that align with our future job needs, such as science, technology, engineering, math, math education, business management, accounting, and health science.

No additional debates between the two candidates have been scheduled to date.

U.S. Senate Committee Passes Education Spending Bill

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This week the U.S. Senate Appropriations Committee passed a spending bill that will increase some federal funding for higher education.

The bill would increase the maximum Pell Grant by $85 in the 2013 fiscal year and give $100 million more in funds to the National Institutes of Health.

The maximum award for the Pell Grant would increase from $5,550 to $5,635 in the 2013-14 academic year. The increase is a result of a mandatory inflation adjustment. Discretionary spending to the program would remain flat.

The bill also would keep spending flat for most other student-aid programs for the 2013 fiscal year, including the Supplemental Educational Opportunity Grants and Federal Work Study.

In addition the bill would:

  • Increase funding for international and foreign-language programs (from $74 million to $75.7 million)
  • Provide funding for the First in the World program which would allow colleges to test new approaches to education
  • Restore eligibility for federal financial aid to students without high-school diplomas or GED’s who have passed an “ability to benefit” test
  • Restore $50.72 million in funding for the Math and Science Partnership program
  • Reduce funds to Race to the Top for elementary and secondary education to office the restoration to the Math and Science Partnership program

The bill now goes to the full Senate for a vote. The U.S. House Appropriations Panel is expectd to draft its own version of the bill next week.

Filing Week Passes; Competitive Election Season Ahead

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Last week was Filing Week- the one-week filing period for candidates- at the Washington State Elections Division and county election offices. Hundreds of candidates filed for 364 offices ranging from the U.S. Senate and Governor to statewide offices and legislative seats.

The results of Filing Week indicated a high turnover in statewide offices, the congressional delegation and the Legislature. Almost twenty-five candidates filed for open seats in the Governor, Secretary of State, Attorney General and State Auditor offices alone. In addition approximately twenty candidates are in the running for open seats in the 1st and 6th U.S. House Districts and the new 10th District. Finally there is a slew of new candidates running for the state legislature, with nearly two dozen incumbents leaving the state House and Senate.

This Monday marked the final day for candiates to withdraw and the final list of candidates is now official as of Tuesday.

The next step is Washington’s Top Two Primary on August 7. Primary ballots will go out to voters by July 20.

Romney Releases Education Plan

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Yesterday likely Republican presidential candidate Mitt Romney released his education plan, A Chance for Every Child: Mitt Romney’s Plan for Restoring the Promise of American Education, that outlines several broad themes related to K-12 and higher education.

The plan for higher education, A New Vision Of Affordable And Applicable Learning, recognizes the importance and value of the nation’s higher education system but expresses concern regarding the current direction of higher education in the United States.

Romney identifies a handful of challenges for higher education that must be addressed. Among the challenges is the position that federal funding is leading to an increase in tuition which in turn is increasing student indebtedness. In addition while traditional models of higher education are important, “other models of advanced skills training are becoming ever more important to success in the American economy, and new educational institutions will be required to fill those roles”.

In response to these challenges, Romney’s plan proposed reforms in the following areas:

  • Strengthen and simplify the financial aid system by consolidating duplicative and overly complex programs in the U.S. Department of Education and focus the Department’s work on giving students and families with financial need the information they need to make informed decisions;
  • Invite private sector participation instead of excluding it by reversing the Obama Administration’s implemenation of direct lending and return to bank-based lending; and
  • Replace regulation with innovation and competition by encouraging market entry of new education models, emphasize skill attainment and support research and development.