June 3, 2013, 4:59 am
By Eric Kelderman
Iowa state legislators have passed a bill that would prohibit the state’s three public universities from using resident tuition for student financial aid. Gov. Terry Branstad, a Republican, is expected to sign the measure into law.
The statewide Board of Regents voted last summer to begin phasing out a set-aside program that used tuition revenue to support need-based financial aid. Under the bill, the universities overseen by the regents—Iowa State University, the University of Iowa, and the University of Northern Iowa—would use money from their general funds instead to pay for the aid.
While the universities would still be allowed to use nonresident tuition for financial aid, the bill would be a “credit negative,” according to a report from Moody’s Investors Service, the credit-rating agency.
The bill also includes a 2.6-percent increase in state appropriations to help…
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May 20, 2013, 4:55 am
By Eric Kelderman
Major governance changes that Pennsylvania State University’s Board of Trustees approved this month are likely to improve the university’s creditworthiness, according to a report released last week by Moody’s Investors Service.
The governance reforms were a response to some of the problems that may have exacerbated the scandal sparked by Jerry Sandusky, the former football coach convicted last year of more than 40 counts of sexual abuse against young boys.
Among the board’s changes, adopted on May 3, were making the state’s governor and the university’s president two out of six ex officio board members who may not vote; increasing the number of trustees required for a quorum; imposing term limits on all but the ex officio members; and “enhancing” the board’s conflict-of-interest policy.
The changes not only will help prevent future problems stemming from a lack of board…
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March 27, 2013, 4:56 am
By Eric Kelderman
Another report has concluded that the financial model for higher education is broken. The difference this time is that the report calls on both state lawmakers and campuses to share in the burden of fixing the problems.
The National Association of State Budget Officers, a nonpartisan group of state-government officials, released its analysis of higher-education finance on Wednesday, along with several broad policy suggestions. The Bill & Melinda Gates Foundation paid for the report and helped cover the cost of convening more than 40 state budget officers at two meetings to discuss how states could use the budget process to achieve better results from higher education.
State budget officers often identify higher education as one of the greatest challenges for state government, said Scott D. Pattison, the association’s executive director.
As in several other reports, the state…
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February 26, 2013, 4:54 pm
By Eric Kelderman
A lot of numbers get tossed around in the debate over college costs and affordability. But those figures can be misleading or give an incomplete picture of what is really going on.
For example, take the median tuition for four-year colleges, which was about $15,000 in the 2011-12 academic year, according to Andrew Gillen, a researcher at the nonpartisan Education Sector.
That sounds like a lot of money, of course. But Mr. Gillen points out in his latest blog post that there is a very wide range in tuition prices, from close to $0 at some public colleges to nearly $50,000 at the most expensive private nonprofit institutions.
And breaking out costs by sector, as Mr. Gillen does in his post, illuminates some not-so-often-mentioned trends. The median cost of a public four-year college is $6,500 per year, and the price range for those institutions is much narrower, over all, than…
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January 15, 2013, 2:13 pm
By Eric Kelderman
The State University of New York is, in theory, a system of 64 college and university campuses. But it has often been accused of operating like a big group of warring fiefdoms competing for money and students, with no interest in cooperating with one another.
Chancellor Nancy L. Zimpher has been trying to unify the system since she took office, in 2009, with measures that have a lot to do with how the colleges receive and spend their money. She laid out her latest proposals to advance that ideal in her state-of-the-university speech, delivered on Tuesday morning.
Starting in 2014, she said, all of the system’s colleges will use the same data systems in order to better compare their academic outcomes and to award money to campuses that are improving their performance.
All of the colleges will also use new technology to track financial aid and student debt. The program is meant to…
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January 8, 2013, 4:49 pm
By Eric Kelderman
A new analysis of state spending on higher education finds that states with a diverse economy, low unemployment, and a history of support for higher education are likely to maintain public spending on colleges. Conversely, states that do not have those characteristics have a hard time overcoming fiscal challenges to create a robust system of higher education.
The study, described in a report titled “College Funding in Context: Understanding the Difference in Higher Education Appropriations Across the States,” was conducted by researchers at the University of Minnesota-Twin Cities’ department of organizational leadership, policy, and development. It found that states that are leaders in higher-education spending tend to stay at the top of that category, creating a kind of “virtuous cycle.” The study was published by Demos, a nonpartisan organization that studies and advocates for…
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January 8, 2013, 2:39 pm
By Eric Kelderman
In 2010, Richard S. Lariviere, then president of the University of Oregon, proposed that the state issue $800-million in bonds to bolster appropriations to the campus, in Eugene.
That idea foundered, and Mr. Lariviere’s advocacy for his proposal became one of the political millstones that eventually sank his presidency.
But the idea of borrowing money to shore up higher-education appropriations has resurfaced in Oregon, this time from the state treasurer, Ted Wheeler. Mr. Wheeler’s idea, according to The Oregonian, is to use state bonds to create a scholarship fund for the state’s students.
The initial amount of $500-million could more than double in a decade, writes an Oregonian columnist, David Sarasohn, who notes that the state is now near the bottom in per-capita state appropriations per student.
But the question is whether the legislature and citizens will go along with …
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December 19, 2012, 1:11 pm
By Eric Kelderman
Moody’s Investors Service just dumped a load of coal into the Christmas stockings of Illinois’s public universities. The bond-rating agency announced on Tuesday that it was considering downgrading the credit rating of the eight institutions because of the state’s poor fiscal situation and the universities’ reliance on state funds.
Moody’s rates about $2.6-billion in debt issued by the university system. A downgrade could increase the cost of future borrowing, not to mention the stigma that a downgrade represents to possible donors and business partners.
The universities are largely victims of their state’s budget impasse and political intransigence. Last week Moody’s announced that Illinois’s economic outlook had shifted from “stable” to “negative,” and in January the ratings agency made the state the lowest rated in the nation.
The problems there include lawmakers’ inability …
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December 18, 2012, 1:48 pm
By Eric Kelderman
The number of sanctions from national accrediting agencies increased by nearly 50 percent from 2008 to 2011, according to a new report from Moody’s Investors Service.
Nearly 80 colleges were subject to some negative accreditation action in 2011, the credit-rating agency found. Most colleges have been able to meet accreditors’ requirements after a warning or probation, the report concludes, and the increase in scrutiny is a result of pressure from the U.S. Congress and the Education Department to ensure both academic and financial viability in higher education.
“Not long ago, accreditation sanctions were rare. Now, in response to growing government criticism of poor disclosure about quality, pricing, and outcomes, as well as inefficient cost management, accreditors are taking more aggressive and quicker actions to bolster their role in demonstrating quality and performance…
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December 14, 2012, 3:06 pm
By Eric Kelderman
When Gov. Chris Christie of New Jersey initially proposed merging much of the University of Medicine and Dentistry of New Jersey with Rutgers University, no cost estimate was available. A price tag of about $50-million was eventually attached to the plan, which drew sharp criticism over a doomed recommendation to merge Rowan University and the Rutgers campus at Camden.
Governor Christie, a Republican, signed legislation to carry out the much-changed plan in August.
But now that the governor, state lawmakers, and Rutgers’s two governing boards have approved the acquisition of the new medical facilities, the real price is becoming painfully clear. Robert L. Barachi, the new president of Rutgers, told state legislators on Thursday that the merger would cost at least $60-million and as much as $75-million, according to a news report from The Record.
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