Governor Murphy’s Proposed Budget Makes Higher Education a Priority
March 7, 2019
On March 5, 2019, Gov. Phil Murphy delivered his FY 2020 budget address. The FY 2020 budget totals $38.6 billion, with “more than $2.57 billion in direct support to higher education institutions and for programs that provide financial assistance to students.” Affordable, accessible, and very high-quality higher education for New Jersey continues to be a top priority for the Murphy Administration.
The Governor is proposing a new Outcomes-Based Funding formula for the four-year public colleges and universities, which includes the “redistribution” of $15 million in current operating aid and an additional $20 million in new funding. Six million dollars of the FY 2019 “legislative additions and a supplemental allocations” for the higher education public institutions was eliminated.
To access the state appropriations portion of the $2.57 billion, colleges and universities will be required to commit to the Student Bill of Rights, the Financial Aid Shopping Sheet, and “other principles in the forthcoming student-centric state plan for higher education.” These other principles refer to “elements of completion,” i.e., the total number of degrees awarded; the number of degrees awarded to underrepresented minorities; and the percentage of enrolled students, who qualify for need-based funding. It should be noted that the completion criteria are based on actual numbers NOT graduation rates.
Specific appropriations figures were unavailable in the preliminary budget document, but Higher Education Secretary Smith-Ellis reached out to each school a few days after the budget address with the proposed appropriation for each institution. The formal appropriations spread sheet should be accessible within two weeks. Secretary Smith-Ellis indicated that the colleges and universities will “essentially” retain their FY 2019 state appropriations support, with additional funding being allocated on the basis of the above outlined criteria.
The FY 2020 fringe benefits cost decreased because of savings from the negotiated changes in health benefits.
The Free Community College program is being expanded. But the Governor now seems willing to go along with a need-based/last-dollar program, rather than a free-for-all, regardless-of-need program. The Governor is asking for an additional $33.5 million (for a total commitment of $58.5 million) to help approximately 18,000 students obtain a two-year degree at no cost.
Tuition Aid Grants allocation will increase by $5.03 million for a total of $437.9 million. This money will go for new grants. Educational Opportunity Program, now in its 50th year, will increase by $2.25 million for a total of $47.572 million to “support the pursuit of higher education for low-income students.”
Analysis of Governor’s Proposed FY 2020 Budget
March 6, 2019
Based on the Budget Address on March 5, 2019, a phone call with Higher Education Secretary Smith Ellis, and the “Budget in Brief.”
Governor’s Funding Proposals for Higher Education
¨ On March 5, 2019, Governor Murphy delivered his FY 2020 budget address. The FY 2020 budget totals $38.6 billion, with “more than $2.57 billion in direct support to higher education institutions and for programs that provide financial assistance to students.” Affordable, accessible, and very high-quality higher education for New Jersey continues to be a top priority for the Murphy Administration.
¨ The Governor is proposing a new Outcomes-Based Funding formula for the four-year public colleges and universities, which includes the “redistribution” of $15 million in current operating aid and an additional $20 million in new funding. FY 2020 budget amount reflects $15 million that was shifted to the Outcomes-Based Allocation, as well as $6 million of FY 2019 “legislative additions and supplemental allocations” that were not continued.
¨ To access the state appropriations portion of the $2.57 billion, colleges and universities will be required to commit to the Student Bill of Rights, the Financial Aid Shopping Sheet, and “other principles in the forthcoming student-centric state plan for higher education.” These other principles refer to “elements of completion,” i.e., the total number of degrees awarded; the number of degrees awarded to underrepresented minorities; and the percentage of enrolled students who qualify for need-based funding. It should be noted that the completion criteria are based on actual numbers, NOT graduation rates.
¨ NJASCU learned that the Secretary will be issuing the appropriations spread sheet by Tuesday or Wednesday of next week. Secretary Smith-Ellis indicated that she anticipates the colleges and universities will “essentially” retain their FY 2019 state appropriations support, with additional funding being allocated on the basis of the above outlined criteria.
¨ The FY 2020 fringe benefit cost decreased because of savings from the negotiated changes in health benefits.
¨ Community colleges are NOT subjected to the Outcomes-Based Funding formula.
¨ The Free Community College program is being expanded. But the Governor now seems willing to go along with a need-based/last-dollar program, rather than a free-for-all, regardless-of-need program. The Governor is asking for an additional $33.5 million (for a total commitment of $58.5 million) to help approximately 18,000 students obtain a two-year degree at no cost.
¨ Tuition Aid grants allocation will increase by $5.03 million for a total of $437.9 million. This money will go for new grants, NOT money for adding onto the “base” – thus, a baby-step closer to the money-follow-the-student strategy.
¨ Educational Opportunity Program, now in its 50th year, will increase by $2.25 million for a total of $47.572 million to “support the pursuit of higher education for low-income students.”
February 25, 2019
A majority of Americans mistakenly believe that government support for public higher education has increased or stayed the same over the past decade, according to survey results released on Monday.
The survey, conducted by American Public Media and The Hechinger Report, found that 27 percent of respondents thought “government funding” for public colleges had risen since 2009, and 32 percent said it had stayed the same. The survey question did not distinguish between local, state, or federal support.
Only 29 percent of respondents correctly answered that government support had dropped. In 2017 state support for public colleges overall was down by $9 billion compared with 2009, when adjusted for inflation.
While many states have increased annual support for several years now, buoyed by strong economies, in most cases the increases have not made up the ground lost to huge cuts in the years immediately after the Great Recession.
People can be forgiven for not fully understanding government funding for higher education, as it can be a complex mix of local, state, and federal support, said Thomas L. Harnisch, director of state relations and a policy analyst at the American Association of State Colleges and Universities. But state spending per student, over all, is down from pre-recession levels, he said, and “that’s resulted in a cost shift from states to students and family.”
The Tuition Pricing Crisis
The survey findings signal that Americans are somewhat aware of the shift in who pays for college. A second question asked if respondents believe that “publicly funded grants and loans” have failed to keep up with the cost of tuition over the past decade; 44 percent said they had, compared with 22 percent who believe they have kept pace and 20 percent who think they have increased, relative to tuition costs. Thirteen percent said they didn’t’ know. The survey did not distinguish between state or federal grants, or private loans or subsidized loans, and it did not specify tuition at public or private institutions.
The survey offers a peek into public misperceptions about higher education funding, but it may not be a true picture. Ten percent of respondents said they didn’t know whether government support had risen, fallen, or stayed the same. Robert Kelchen, an assistant professor of higher education at Seton Hall University, tweeted that the survey might indicate that “a lot of people are willing to guess answers rather than honestly report ‘don’t know.’”
While the survey results may be imprecise, they still show the challenge facing public colleges, said Kevin R. McClure, an assistant professor of higher education at the University of North Carolina at Wilmington. “It’s further discouraging evidence,” he said, “that there isn’t necessarily a lot of support for increasing funding to public colleges and universities if the public believes that they’re already being supported in the way they should be.”
Analysis from www.EducationDive.com:
Despite general declines in state funding to public colleges in recent years, relatively few U.S. adults appear to be aware of the shift, according to a new report from American Public Media and The Hechinger Report.
Despite prevailing public opinion that government funding to state colleges is level or increasing, higher ed leaders face a different reality. Data from the Center on Budget and Policy Priorities (CBPP) show state funding to public two- and four-year colleges in 2018 was more than $7 billion below 2008 levels when adjusted for inflation.
Colleges have responded to the cuts, CBPP states, by increasing tuition, cutting faculty, reducing course offerings and even scaling back their footprints by closing campuses. Of 49 states counted (minus Illinois and the District of Columbia), all but four spent less per student in 2018 than in 2008, with an average decrease of 16%. Of that group, 15 states cut spending by more than one-quarter.
States have slowly begun to reinvest in their public colleges, although their own revenues have already returned to pre-recession levels. To help close the gap more quickly, many public university systems are also underway with massive fundraising campaigns.
However, higher taxes and bigger ‘rainy day’ funds may be necessary to offset the impact of reduced state investment in higher ed, according to a new report from the Federal Reserve Bank of Boston focusing on New England colleges. The report noted that a $1 cut in state higher ed funding triggered decreases of 30 cents and 56 cents in instructional spending at public doctoral and community colleges, respectively, in the region.
Spurring more state investment will be a challenge if, as the APM report suggests, voters don’t see it is lacking, Tom Harnisch, director of state relations and policy analyst for the American Association of State Colleges and Universities (AASCU) told The Hechinger Report.
Though perhaps they should care. The publication points out that as state funding slides and tuition costs rise, students and families are shouldering nearly one-half of colleges’ operating costs, compared to one-third a decade ago.
January 22, 2019
The recently released “Locked Out of the Future” report
from the progressive think tank and advocacy organization Education Reform Now (ERN) described a problem: Higher education in New Jersey is failing its black and Latino students. The ERN report, however, offered no solutions. New Jersey’s senior public institutions of higher education have been aggressively working on creating and implementing solutions that have gone unrecognized in this “Locked Out” report. Comprehensive success will require continuing close cooperation with the governor, legislature, business, labor and others on an integrated set of policies tied to a statewide opportunity/prosperity agenda, in addition to innovative leadership from university leaders, governed by citizen boards of trustees.
New Jersey’s public universities have been vigorously pursuing policy options to enhance opportunity, equity and accountability within the context of socio-economic and ethnic diversity. The public institutions all provide a wide range of programs focused on the ERN-defined problem, such as: combatting food insecurity; replacing expensive text books with on-line materials; providing individualized skills-enhancing tutoring; ramping up fundraising for need-based scholarships; partnering with businesses on mentoring and internship opportunities; restructuring the path to attaining a BA degree with increased partnerships with community colleges; and implementing strategies for debt-free education.
Some specific examples of student- success strategies being implemented within New Jersey’s community of senior public colleges and universities (New Jersey Association of State Colleges and Universities – NJASCU – member institutions) include: (NJASCU schools provide similar versions of all or most of the below initiatives.)
- New Jersey City University has instituted a program to eliminate the need for students to take out loans to cover the cost of tuition and fees. All New Jersey residents who are admitted to NJCU from high school and attend full-time, with a family household income of $60,000 or less, will be offered a scholarship in lieu of having to take out a loan (after federal and state financial aid is awarded).
- Stockton University just this past week announced its collaboration with two local high schools to close the math gap among incoming university students.
- Kean University, which is a federally designated Hispanic-Serving Institution, offers an innovative Spanish Speaking Program that provides two years of instruction in Spanish while developing students' language skills for English instruction.
- The College of New Jersey's PRIDE Mentoring program, now in its sixth year, has seen tremendous success in helping minority students fulfill their academic goals. Student mentors, leadership development, academic advising and transitional programming are among the initiatives that have led to increased levels of student engagement and increases in retention and graduation rates.
- The Rowan University Success Network, a student tracking and communication system, allows students to receive regular feedback from faculty, learn about campuses resources, and make appointments with key academic support personnel. Faculty participate by providing encouragement and support to students; enabling advisors and staff to take a holistic approach to success by obtaining an overview of the student's academic life.
- Montclair State University is one of two NJ institutions (the other is Rutgers-New Brunswick) to participate in the APLU "Powered by Publics" initiative, a collective effort of 130 state colleges and universities to apply best-practice approaches to improving student outcomes. This project is believed to be the largest effort in the nation to increase access, close the achievement gap and award hundreds of thousands more degrees by 2025.
- William Paterson University of New Jersey has the New Student Experience department that identifies and provides solutions for roadblocks to student success in the first year; it provides a solid foundation necessary for new students to develop the skills needed to engage in the rigorous academic challenges of higher education.
- Ramapo College, thanks to an enterprising Student Government Association, has a Food Pantry and the Student Emergency Relief Fund for emergency aid to students to cover non-tuition related expenses. Both of these efforts are wrapped into a campus wide program/initiative entitled "WeCare."
- Thomas Edison State University is creating a Military Student Reserve Fund to assure the continuous education of enrolled students who face exigent circumstances that may prevent them from continuing with their education through no fault of their own.
It should be noted that the schools have managed to keep the annual tuition and fee increases in the 2 to 2.5 percent range for the past several years. This has been accomplished, even though state aid to state college and university operating budgets has dramatically decreased (state operating appropriations to NJ state colleges and universities between FY 1991-FY2019 has decreased $8.4 million – actual dollars, no adjustment for inflation). In addition to the outdated operational funding formula, the schools are dealing with erratic state support for new capital projects, no support for deferred maintenance, an outdated State College Contracts Law that costs the schools millions of dollars, and expensive legislative mandates to provide tuition discounts or free tuition for different groups of citizens.
The best ways to unlock the future for our state’s Latino and African-American youth is to implement rational and student-focused funding for operational support, capital support, and tuition aid grants. The state is working on a higher education master plan that we hope provides the direction and resources necessary to truly reform the system. But helping the public colleges and universities provide more affordable education in the very near future may require no additional state resources, if legislators considered the fiscal burdens of mandates, some of which are unnecessary and outdated. The most glaring example of this is the 35-year-old State College Contracts Law. Reform of the law would save the schools a significant amount of money that would be targeted for programs to produce better student outcomes. The New Jersey Association of State Colleges and Universities looks forward to working with our state’s leaders to transform the problem into a solution benefitting all the residents of New Jersey.
October 19, 2018
Lawmakers Setting Out to Fix Major Flaws in the Way New Jersey Funds Higher Education – www.NJSpotlight.com, October 16, 2018.
The below article was taken from original reporting plus an NJSpotlight article referenced above.
Lawmakers from the NJ State Assembly and Senate committees on Higher Education met in a joint session in Trenton on Tuesday, October 16, 2018, to discuss an initiative to make higher education more affordable for students and ensure the state is working toward closing the racial equity gap in postsecondary education. As acknowledged by NJ Association of State Colleges and Universities for many years, New Jersey colleges and universities have long been running on a flawed state funding system that fails to incentivize student achievement and funds the public institutions in an inequitable way. The solution, according to New Jersey’s higher education leaders is a new strategic funding plan tied to student outcomes.
“For a long time, we haven’t been funding higher education very well here in the state and every institution has had to go off on their own. Some are doing well, others are not doing well, and in the end our students suffer,” Assemblywoman and Committee Chair Mila Jasey (D-Essex) said. “I believe we are going to get a strategic plan that looks at the entire landscape and begins to address some of these issues like access, equity, attainment, completion and also cost.”
New Jersey already has a longstanding goal of “65 by ‘25” – meaning 65 percent of working New Jerseyans to attain a postsecondary degree or certification by 2025 – but lacks a meaningful roadmap and the appropriate resources to get there from the current count of 50.2 percent of workers with such a degree.
Indeed, state funding of New Jersey state colleges and universities is based exclusively on how much funding they’ve received in the past and that amount has decreased more than 28 percent over the past 12 years. More dramatically stated, the NJ State appropriations to NJ public colleges and universities per full-time equivalent student has decreased by 40.1 percent between FY1991 and FY2016. During this same period enrollment has increased by 63.2 percent.
Exacerbating the problem, students are coming out with more debt. According to the New Jersey Association of State Colleges and Universities, average in-state tuition among New Jersey’s senior public four-year institutions for the academic year 2016-2017 was $13,560 and the average cumulative student loan (borrowed by graduates) was $28,245.
The state funds higher education through direct operating aid to the four- and two-year colleges, and through tuition-aid grants to students, which ultimately passes through to the colleges. Money is also available through other programs like the Education Opportunity Fund which provides financial support and services like counseling and tutoring to low-income students.
But experts testified at the October 16th hearing that the key to achieving that “65 by ‘25” goal is to expand it to stretch around universities of different sizes and resources and also ensure schools are supporting students of all backgrounds.
According to the Secretary of Higher Education Zakiya Smith-Ellis the answer to building a more equitable and successful method of state funding is a policy called “Outcomes-Based Funding” or OBF. It’s a relatively new approach that’s gaining attention in higher education due to its success in states like Indiana and Tennessee.
OBF as a funding model is designed to be flexible and to align incentives with state priorities like getting more students to complete their degrees and reward institutions for admitting more under-served students. In a nutshell, OBF allows the state to say what it wants to see colleges achieve and then attach funding to those goals. Currently the way New Jersey funds colleges and universities is based solely on what they were allocated in the years past; the state raises or cuts funding in the same percentage “across the board,” regardless of enrollment changes or student performance.
Martha Snyder, an education policy specialist with HCM Strategists who testified at the hearing, said that OBF works because it allows a state to set appropriate goals and then develop a funding formula that will best serve them. But, she adds, there is no “magic number” for how much that will cost the state.
“The funding model we recommend should allocate a significant portion of funding, enough to garner attention, shape priorities, influence actions, and also ensure that the model is sustained over time. If it’s only [dependent on] new money, and there isn’t any new money, then effectively there isn’t a funding policy,” Ms. Snyder said.
Thirty states have already signed on to OBF but are seeing mixed results, Ms. Snyder said. Five states have already fallen into the “no new money” trap in 2018. They had models in place. Snyder said, but no sustainable source of funding to support them.
Though each state has unique quirks and challenges, the experts who were testifying (the above mentioned plus Ms. Kate Shaw, executive director of Research for Action, an education policy-research organization), all appointed to Tennessee as a gold standard of OBF for New Jersey to look to.
Tennessee’s OBF model (or PBF model, for performance-based funding) was passed in 2010, giving researchers a lot of time to measure its success and failures. They deemed it an overwhelming success.
Eighty-five percent of Tennessee state funds are now allocated to institutions based on state priorities like degree completion, funding for at-risk students, and enrollment. But what’s unique about the southern state’s method – and one that strategists in New Jersey should examine closely – is its dedication to funding each college and university’s individual mission. Because two-year, four-year and research institutions have vastly different student populations and resources at their disposal, Tennessee allows each school to prioritize their own metrics like workforce training hours or job placement and gives premiums for success among minority students.
Tennessee is now embarking on its “Drive to 55” campaign, which shares a similar goal with New Jersey’s “65 by ’25.”
Ms. Snyder said New Jersey has a real opportunity to adopt something similar to the Tennessee method and surpass it as a national model for higher education funding.
One area that New Jersey really needs to focus on, according to Tiffany Jones, director of higher education policy at the Education Trust, is closing the racial equity gap.
According to Ms. Jones, New Jersey spends on average 12 percent more funding white students than students of color, placing the state in the top five nationally for inequitable spending on higher education.
This is a product, Ms. Jones said, of a nationally stratified system that concentrates students of color into less-resourced, less-selective community colleges and certificate programs while their white peers education in better K-12 schools go on to graduate from better-funded, four-year institutions.
Dr. Smith Ellis proposed counteracting this inequity under an OBF model by giving “bonuses” to schools that enroll and adequately educate minority or low-income students.
She noted, however, that such bonuses have been used to “game the system” in favor of lower-income white students while still failing to boost funding for black and Hispanic students. To prevent this, Jones said it will be necessary to build in language to any formula that explicitly accounts for students of color, not just students of lower economic class.
To get any of this done, Dr. Smith Ellis estimates the state will need six months to a year to begin gathering stakeholder input and devising a funding formula. Although many officials have tried over the years to reform New Jersey’s higher education funding system with no success, Smith Ellis said it’s crucial to keep trying.
A well-funded and equitable higher education system, she added, will keep millennials in the state, keep student debt at manageable levels, and inject much-needed life into the economy.
“We have a goal, we’re creating a plan and the next step is to align funding,” Dr. Smith Ellis said. And while the country is looking to states like Tennessee to lead the way in the next wave of higher education funding innovation, the Secretary of Higher Education said, “I hope next year, everyone is talking about New Jersey.”
Editorial Urges Politicians to Support Higher Education – it’s a Winning Issue - March 19, 2018
S-2552 – Authorizes reciprocal agreements with other states for academic credit transfer and directs public institutions of higher education to enter into such agreements. Senate Higher Education Committee on December 11, 2017, voted to move forward with the proposal.
Senate Bill No. 3097 - Food Insecurity - November 29, 2017