New York state has recently instituted the “Get on Your Feet” loan forgiveness program in an effort to keep young college graduates living and working in the state. The program, originally introduced as a part of Governor Cuomo’s 2015 Opportunity Agenda, is designed to help struggling recent graduates in the state pay back their student loan debt. Get on Your Feet is the most recent extension of NY state’s financial aid to its college graduates, which includes loan forgiveness for several public service professions and need-based state grant programs with awards of up to $5,165.
There are a number of eligibility stipulations for the program, including that the graduate be enrolled in the federal Income-Based Repayment plan or the Pay As You Earn plan, that they are making less than $50,000 per year, that they work and have graduated in-state, and that they have received their degree during or after the 2014-15 academic year. Get on Your Feet also only applies to federal loans; private loans are ineligible for relief through the program.
The plan, which has been covered by CNN Money, the Huffington Post, Forbes, and the Washington Post, is not without controversy – recent graduates who do not qualify for Get on Your Feet are upset because they feel they are paying for others’ college costs while reaping none of the benefits of the loan forgiveness. The program is financed through the state’s General Fund, for which the primary sources of revenue are in-state taxes.
The Washington Post article above (linked again here) lists some of the other states that have forms of student loan forgiveness. Forty-five states and the District of Columbia offer some form of loan forgiveness for its residents, according to the article, but New York is the only state that specifically targets lower-income graduates. Most programs in other states are concentrated in public-service industries; health, social work, teaching, and public law.
Washington state provides health-care professionals with loan forgiveness of up to $70,000 over two years (details here) and also gives financial assistance in the form of the State Need Grant (SNG), which distributes financial aid awards up to the price of in-state undergraduate tuition—$10,344 at UW—for Washington residents whose families meet the minimum income requirements.
Unfortunately, more than 33,500 students across Washington, 3,500 of whom attend the UW, are eligible to benefit from the SNG but do not because the program has not received sufficient funding from the state.
Governor Jay Inslee released his supplemental operating and capital budget proposals on Thursday, both of which include technical corrections and minor appropriation changes to the current 2015-17 biennial budgets (fiscal years 2016 and 2017). This budget release marks the first step of the 2016 legislative session – set to begin on Monday, January 11, 2016. As a reminder, the House and the Senate will propose their own supplemental budgets throughout this short 60-day session as they work toward a compromise budget.
As predicted, Governor Inslee’s proposal offers very few changes to ongoing appropriations. In response to the UW’s request, the proposal provides increased expenditure authority for ongoing shellfish biotoxin monitoring work by the UW’s Olympia Regional Harmful Algal Bloom Program, beginning in FY17. If this budget prevailed, the University would also receive $250,000 in additional ongoing funding for the Mathematics, Engineering, and Science Achievement program beginning in FY17. The proposal does not make changes to the compensation and benefits assumptions of the 2015-17 operating budget.
For more information, please see our brief on Governor Inslee’s 2016 Supplemental Operating and Capital Budgets.
Leadership in both House and Senate passed a compromise operating budget in the form of Engrossed Substitute Senate Bill 6052.
All of higher education including financial aid would receive $3.5 billion of Near General Fund (NGF) for the biennium which is 9.2 percent of the overall NGF appropriation of $38.2 billion.
The compromise budget adopts the provisions in Second Engrossed Substitute Senate Bill 5954, which reduces the operating fee portion of resident undergrad tuition at all public higher education institutions. In 2015-16, resident undergraduate operating fees at all public institutions are to be 5 percent below the 2014-15 rates. In 2016-17, resident undergraduate operating fees at the state universities (the UW and WSU) are to be 15 percent below the 2014-15 rates; at the regional universities, they are to be 20 percent below the 2014-15 rates; and at the community and technical colleges, they are to be held at 5 percent of the 2014-15 rates.
This budget provides $27 million to partially fund compensation increases of 3% in FY16 and 1.8% in FY17. This budget also partially funds collective bargaining agreements with WFSE and SEIU.
Listed below are some of the Key funding’s provided by this budget:
Computer Science – $6 million over the biennium to increase bachelor’s degrees awarded in Computer Science.
WWAMI – $9 million over the biennium to continue operations in Spokane.
Family Practice Medicine Residency Network – $8 million over the biennium to fund additional medical residencies.
O&M Funding – $1.76 million over the biennium to cover maintenance costs for UW Bothell’s Discovery Hall.
The legislature also passed the final capital budget. For more details on the operating and capital budgets, please refer our OPB Brief.
Leadership in the House Committee released a new Operating budget proposal in the form of P2SHB 1106 as a counter offer to the Senate budget released last week. This proposal still differs from the Senate budget and varies slightly from the engrossed House operating budget, ESHB 1106.
All of higher education (including financial aid) would receive nearly $3.49 billion or 9 percent. UW receives a total appropriation of $612.3 million of which $591.39 million is from Near General Fund account.
Here are some of the key points from the House “Offer “Budget proposal:
- Tuition – This budget freezes tuition to all higher education institutions at the levels charged in 2012-2013. Funding is provided to freeze resident undergrad tuition.
- Compensation Increase – This budget proposal is similar to prior proposals in authorizing a 3% and 1.8% for FY16 and 17, however this budget would only partially fund the cost of increase. This budget provides limited funds for the UW’s contracts with SEIU and WFSE.
- WWAMI – This budget contains a proviso to transfer $4.68 million a year from WSU to the UW to maintain WWAMI and also a contains a requirement to support 60 first year medical students and 60 second medical students through WWAMI program in Spokane.
- O&M Funding – $1.762 million over the biennium to cover the Operating and maintenance cost of UW Bothell Discovery Hall which is the same as the House budget, but slightly higher than the Governors funding.
- Computer Science – This budget provides $4.25 million over the biennium to increase bachelor’s degrees awarded in computer science.
Please refer to our OPB Brief for more information about the special session House “Offer” budget.
The Senate capital budget appropriates $102 million in new funding from the State Building Construction Account, which is significantly more than the House capital budget appropriation of $41 million.
Here are some of the major funding items from the Senate capital budget:
- $32.5 million for computer science and engineering expansion.
- $16 million for UW Tacoma Urban Solution Center.
- $46.2 million for Burke Museum.
- $4 million for Health Science education MHSC T-wing renovation predesign.
The Senate voted its operating budget, Engrossed Substitute Senate Bill 5077 off the floor, adopting only five floor amendments, making virtually no changes to the higher education budget presented in our prior budget brief, available here. However, one of these five adopted amendments would redirect state marijuana-related revenues to the general fund, in lieu of allocating those funds to the state’s research universities (per citizen’s Initiative 502).
We will keep you updated as the House and Senate continue to work toward a final conference budget.
On Thursday, the House passed its operating budget proposal (Engrossed Substitute HB 1106) off the floor, with several amendments.
The original tuition and compensation proposals from the House Chair budget remain unaltered, however there some key changes compared to the original bill:
- Funding for computer science and engineering is reduced by $3.75 million, bringing the biennial total to $4.25 million, rather than $8 million.
- An additional $1.9 million is provided for the Family Medicine Residency Network, bringing the biennial total to $4.9 million.
- New funding of $300,000 is provided for the UW’s Latino Health Center over the biennium.
- New funding of $400,000 is provided for the Climate Impacts Group in the College of the Environment over the biennium.
Please see our OBP brief for more information about the original House proposal.
The Senate is expected to vote on its operating budget on Monday.
On Tuesday, Leadership in the Senate Ways & Means Committee released its operating budget proposal, Proposed Substitute Senate Bill 5077 which makes significant changes to the Governor’s proposal and differs significantly from the House proposal. Under the Senate proposal, the UW would receive $674.39 million of Near General Fund State across the biennium.
Here are some of the key points from the Senate Budget proposal:
- Tuition affordability program – The Senate budget reduces the operating fee portion of resident undergraduate tuition to 18 percent of the state’s average wage in FY16 and 14 percent of the state’s average wage in FY17 onwards. It provides $96 million over the biennium to offset the reduction in operating fees, which we believe falls short by $1.2 million in FY16 and $2.8 million in FY17.
- WWAMI – The Senate budget provides $1.25 million per year for continued operations of the WWAMI program.
- O&M Funding – Like the House budget, the Senate provides $1.762 million over the biennium to cover the operation and maintenance costs of UW Bothell Discovery Hall.
- STEM Investments – The Senate proposal provides $2 million per year to increase bachelor’s degrees in Science, Technology, engineering and Math fields.
- Compensation Increase – The Senate bill rejects state-funded contracts with classified staff. Instead, the Senate Chair budget would fund wage increases at $1,000 per employee and require that the University either renegotiate contracts to match this funding level or locally fund the difference in perpetuity. The Senate budget provides funds for faculty and staff wage increases at $1,000 per employee and allows the UW to deviate from this assumption with local funds.
The Senate capital budget is expected to be released next week . For more information, please see the OPB Brief.
Leadership in the House Appropriations Committee released their 2015-17 operating budget proposal on Friday – Proposed Substitute House Bill 1106 . The proposal provides $3.48 billion of Near General Fund State for higher education which is a slight increase over the total higher education appropriations in the Governor’s budget.
On the operating side, the UW would receive $595.6 million of Near General Fund State across the biennium – $95 million more than we received in 2013-15.
Here are some of the key points from the House operating budget proposal:
- Tuition freeze for resident undergraduate students over the biennium.
- $50 million in biennial funding to offset tuition freeze and fund compensation increases.
- $8 million in FY17 to support Computer Science engineering enrollment.
- $3 million in FY17 for additional medical residencies in Washington State.
- $4.68 million transfer from WSU to the UW in both FY16 and FY17 to support the WWAMI program.
- $1.7 million over the biennium to cover operation and maintenance costs for UW Bothell Discovery Hall.
- $1 million for an ungulate predation study — $600,000 of which would pass through to another state agency.
- No funding for Climates Impacts Group, although the Governor’s funding had provided$1 million provided for this purpose.
Overall, the UW fared well in the House operating budget compared to the Governor budget.
On the capital side, the UW would receive $41.156 million in new funding from the State Building Construction Account. This is significantly less than the Governor’s proposed budget of $86.2 million, with less funding for the CSE Expansion ($6.033 million of the $40 million requested) and no funding to support the completion of the phased renovation of Lewis Hall. It does however propose a greater amount of funding for the Burke Museum ($26 million), but is still less than the Burke’s requested $46 million.
The Senate will release its proposed operating and capital budgets in the coming weeks. For an analysis and summary of the operating and capital budgets, please review the OPB Brief.
General Fund-State (GF-S) revenue forecast has been increased by $107 million for the 2013-2015 biennium and by $129 million for 2015-2017.
- GF-S revenue for the 2013-2015 biennium is now $33.547 billion (9.4% higher than collections in the 2011-13 biennium) and
- The forecasted GF-S revenue for the 2015-2017 biennium is now $36.449 billion (8.7% higher than collections in the 2013-15 biennium)
Revenue collections through February 10th were $69 M (1.5%) higher than forecasted. Of this amount, $52 M came from Revenue Act Sources (retail sales, business and occupation, public utility and tobacco products taxes).
A few additional highlights from the update:
- Oil Prices have declined further since November forecast.
- Sales tax growth is strong and is driven by sales in construction, autos and building materials.
- Real estate excise tax since November forecast came in $11 M higher than forecasted.
- Average monthly increase of 7,000 net new jobs in Washington. Seattle area employment is growing much faster than the rest of the state.
Note: Caseload forecast Council will release their report this afternoon at 1.30PM
The Governor released operating and capital budgets yesterday morning. Though the UW fared well in the capital budget, we believe the operating budget, as currently proposed, presents challenges. Please note that the Governor’s budgets will be taken up by the Legislature in January; we are many months away from a final legislative compromise. As usual, we will be sending out budget briefing documents throughout legislative session to keep you updated.
For an analysis and summary of the operating and capital budgets, please review the OPB brief.
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