The rising costs of college are a popular subject for everyone from presidential candidates to media outlets. Parents and students blanche as published tuition prices climb ever higher. But the published price – often referred to as the “sticker price” for colleges – offers a misleading picture of the cost of higher education. OPB has updated our brief to reflect the newest available data on published price vs. net price. Highlights include:
- Sector-wide data on increases in published price and net price for public and private four-year colleges
- A description of how declining state investment in higher education has spurred tuition increases
- A table of the top 25 research universities’ net price for resident undergraduates receiving grant or scholarship aid
Our updated brief is accessible here.
The 2016 Legislature concluded its business having passed supplemental operating and capital budgets before the scheduled close of the 30-day special session. Please see the OPB brief for a detailed overview of the final compromise budgets.
While the compromise operating budget includes $3.513 million in additional biennial funding to “true up” the tuition backfill associated with 2ESB 5954, the increase is partially offset by more than $2 million in new, ongoing, biennial charges for services provided by the Office of Financial Management.
The compromise capital budget does not include any changes for the UW.
Please contact Jed Bradley or Becka Johnson Poppe if you have any questions.
The House and Senate did not come to an agreement on a 2016 supplemental budget by the end of the 60-day regular session, which was slated to end March 10. Several news outlets reported the tense ending, which featured Governor Inslee vetoing 27 bills (see examples here, here, and here). The Governor convened a 30-day special session, which began immediately.
On Friday, leadership in the Senate Ways & Means Committee released a new proposal for a 2016 supplemental operating budget (PSSB 6667). Last month, OPB released a brief comparing the Governor’s proposal, House proposal, and the Senate’s original proposal. That brief outlines the major components of each budget.
Like the Senate’s original proposal, this offer proposes $3.513 million in additional biennial funding to “true up” the tuition backfill associated with 2ESB 5954. However, both Senate proposals would almost entirely negate this additional backfill funding by converting activities conducted by the Office of Financial Management (OFM) into a central service charged to state agencies. Over the biennium, the UW would be charged $1.252 million from its state general fund appropriation and $2.042 million from tuition operating fee revenue for these OFM central services, a total of $3.294 million.
This proposal differs from the original Senate proposal in that it:
- Does not cut WWAMI: The original proposal included a cut of $1.2 million
- Does not fund a proviso for youth suicide prevention at UW’s Forefront: The original proposal allocated $97,000 in FY17 to fund 2SSB 6243, but that bill did not pass the House.
- Shifts $18 million in cost savings from College Bound (CB) program to State Need Grant (SNG): The original proposal shifted only $14 million, effectively cutting SNG by $4.5 million.
During a press conference responding to this release, leadership in the House emphasized continuing negotiations toward a compromised budget and gave no indication that they would release a public budget offer.
Stay tuned to the OPBlog for updates on proposed budgets.
This week, leadership in the House and Senate released their respective supplemental operating and capital budget proposals for the current biennium (FY16 & FY17), which follow the December release of Governor Jay Inslee’s proposals. As a reminder, the House and Senate proposals will be amended before they pass their respective chambers.
Please see the OPB brief for a detailed comparison of the House, Senate and Governor’s supplemental operating and capital budget proposals.
- The budget released by the leadership in the Senate Ways & Means Committee would provide the most funding overall, largely because it includes additional funding for the resident undergraduate tuition reduction backfill associated with 2ESB 5954.
- None of the three capital budgets provide additional funding for the UW beyond the original 2015-17 capital budget.
Legislators will have until March 10, the last day of session, to complete and pass a compromise budget.
See the table below for a quick comparison of the budget proposals:
Earlier today, the leadership in the House Appropriations Committee released their 2016 supplemental operating budget proposal. Toward the end of this week, the leadership in the Senate Ways & Means Committee will release their budget. Following that release, we will post a brief here outlining the differences between Governor Inslee’s proposed budget and the House and Senate proposals.
As a reminder, supplemental budgets include technical corrections and minor appropriation changes to the current 2015-17 biennial budget (fiscal years 2016 and 2017). Budget proposals in the House and the Senate will be amended in their respective committees, and possibly on each chamber floor, before negotiations begin towards a compromise budget.
Overview of the House budget:
Compared to the Governor’s proposal, the UW would receive an additional $50,000 to fully fund the implementation of HB 1138. In addition, the House budget would not reduce the UW’s allocation for legal services (the Governor proposed a reduction of $151,000).
Under the House proposal, the UW’s share of the settlement in the Moore v. HCA lawsuit would increase to nearly $16.3 million, compared to $15.6 million in the Governor’s budget.
The House Capital Budget Committee will release its 2016 supplemental capital budget proposal on Wednesday. Stay tuned to the OPBlog for updates on proposed budgets as they move through the process.
On Wednesday, the Economic and Revenue Forecast Council (ERFC) released its February revenue forecast, which reduced projected General Fund-State (GF-S) collections compared to the November revenue forecast (see our blog post here). The GF-S revenue forecast decreased by $67 million for the current 2015-17 biennium and by $442 million for the 2017-19 biennium. While the revision to the 2017-19 outlook is not inconsequential, there will be at least four more revenue forecasts between now and when the legislature will set a 2017-19 biennial budget – plenty of time for the outlook to change.
- Total projected GF-S revenue for the 2015-17 biennium is now $37.137 billion, 10.3 percent more than the 2013-15 biennium.
- Total projected GF-S revenue for the 2017-19 biennium is now $40.125 billion, 8 percent more than the 2015-17 biennium.
- The forecast included an initial forecast of GF-S revenue for the 2019-21 biennium of $43.441 billion, 8.3 percent more than the 2017-19 biennium.
Behind the numbers:
- The forecast attributes decreases in projected revenues to slower than expected growth in the U.S. and Washington state economies.
- Washington exports declined for the first time since 2009.
- Other negative factors cited in the forecast include lower forecasted personal income growth, reductions in housing permits and property tax growth, and lower tax receipts due to low oil and gas prices.
- Some positives include slightly higher than expected tax receipts since the November forecast, increases in hourly wages, and the fact that lower oil and gasoline prices are a positive for consumers.
The Governor’s Council of Economic Advisors, which advises the Governor on the state of financial matters, offered a slightly more pessimistic revenue prediction based on the ERFC February Forecast, predicting additional decreases in forecasted GF-S revenue of $55 million in 2015-17 and $202 million in 2017-19.
Budget writers in the House of Representatives and the Senate will use the February Revenue Forecast to set expenditure levels for their 2016 supplemental budget proposals. House and Senate budget proposals are expected to be released the week of February 22. The last day of the regular session is March 10.
Stay tuned to the OPBlog for updates on budget proposals from the House and Senate when those are released.
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.
On Wednesday, the Economic and Revenue Forecast Council released its November revenue forecast, which projected a slight increase to General Fund-State (GF-S) collections over the September revenue forecast. The GF-S revenue forecast increased by $113 million for the current 2015-17 biennium and $30 million for the 2017-19 biennium.
- Final GF-S revenue collections for the 2013-15 biennium were $33.666 billion.
- Total projected GF-S revenue for the 2015-17 biennium is now $37.204 billion, 10.5 percent more than the 2013-15 biennium.
- Total projected GF-S revenue for the 2017-19 biennium is now $40.567 billion, 9 percent more than the 2015-17 biennium.
Behind the numbers:
- The forecast attributes the higher projections to strong performance in auto sales and service-providing industries.
- Cannabis revenue from Clark County fell after Oregon legalized marijuana, but statewide revenues have continued to grow.
- Concerns cited in the forecast include weaker-than-expected job growth, a dip in exports, and a manufacturing decline in the United States and Washington state.
- The forecast assumes that the Federal Reserve will gradually increase interest rates starting in December.
According to a Spokesman Review article, expenditures in the 2015-17 biennium are expected to exceed the $37.204 billion in expected revenue. Further complications include a costly wildfire season, the $100,000 per-day fine that the state Supreme Court levied on the Legislature for failing to come up with a plan to boost public school funding, and voter approval of Initiative 1366, which will reduce state sales tax by 1 percent if the Legislature doesn’t approve a constitutional amendment to require a two-thirds vote for tax increases. David Schumacher, director of the Office of Financial Management (OFM) is quoted in the Spokesman Review article as saying, “What this means, of course, is that there will be very little room for new spending in this year’s supplemental budget.”
Governor Jay Inslee will use the November revenue forecast to craft his 2015-17 supplemental budget proposal, which is expected to be released in December. Stay tuned to the OPBlog for updates on the Governor’s budget proposal when it is released.
A recent story in the LA Times, “UC seeks to boost Californians’ enrollment by 10,000 by 2018,” outlined the University of California’s plan to expand resident undergraduate enrollment at their nine undergraduate campuses. Like many U.S. public universities that have faced significant state divestment during the recession, the UC system has enrolled more nonresident students in recent years to help cover funding cuts and keep resident tuition increases to a minimum. To adjust this trend, the California Legislature recently increased its investment in the UC system by $25 million to partially fund the enrollment of 5,000 additional resident undergraduate students by no later than 2016-17. To pay for an additional 5,000 enrollments proposed by UC, system President Janet Napolitano plans to phase out aid for low-income non-resident students and request additional funding from the California Legislature. Napolitano was quoted as assuming the legislature would “continue to support access for California students.”
According to the article, UC officials are now “working through the logistics of housing, laboratory availability, and classroom sizes.” The increase in undergraduate students will also necessitate enrolling 600 more graduate students for instruction and lab support.
The University of Washington has faced similar financial pressures as a result of the recession, but remains committed to providing Washington students with affordable, quality higher education.
- The UW continues to fully fund Husky Promise, which covers, at minimum, tuition and fees for resident undergraduate students who qualify for the Pell Grant or State Need Grant.
- Since 2009-10, the UW has increased incoming enrollment of resident undergraduates by more than 1000 students at its three campuses.
- During the recession, the UW increased its contribution to institutional financial aid in order to maintain access for students with the most financial need.
- The percentage of Pell-eligible students at the UW rose from less than 20 percent in 2007-08 to 29 percent in 2014-15.
With over 188,000 undergraduate students in the UC system, the plan would increase their undergraduate enrollment by over 5 percent. To achieve a similar overall increase, the UW would need to add approximately 2000 students and would face significant barriers in doing so. Unlike the UC system, UW does not provide need-based aid for non-resident undergraduate students, and thus would not be able to cut that non-resident aid funding to pay for additional resident enrollment. Additionally, all three campuses are nearly at capacity without significant capital investment.
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