Making Kentucky STRONGER BY DEGREES Kentucky Council on

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Making Kentucky STRONGER BY DEGREES Kentucky Council on Postsecondary Education Shaun Mc. Kiernan, Senior

Making Kentucky STRONGER BY DEGREES Kentucky Council on Postsecondary Education Shaun Mc. Kiernan, Senior Associate for Budget & Finance November 2, 2016

Council on Postsecondary Education: Key Responsibilities • Coordination of public colleges and universities •

Council on Postsecondary Education: Key Responsibilities • Coordination of public colleges and universities • Adult Basic Education • Licensing postsecondary institutions operating in Kentucky • Administration of pass-through programs 2

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Almost 90% of CPE’s General Fund appropriation supports pass-through programs: Adult Education (47%): •

Almost 90% of CPE’s General Fund appropriation supports pass-through programs: Adult Education (47%): • Local programs in 120 counties with 760 program staff • 29, 000 adults served (GED, workforce skills, college and career readiness) • 21 administrative staff (coordination, evaluation, technical assistance, federal reporting requirements) 4

Student Aid & Assistance (15%): • Contract Spaces (164 veterinary & 44 optometry slots)

Student Aid & Assistance (15%): • Contract Spaces (164 veterinary & 44 optometry slots) • SREB Doctoral Scholars (2 minority scholars) • Governor’s Minority Student College Prep Program • Professional Education Preparation Program (MCAT/DAT test prep programs) • KY Autism Training Center at Uof. L • Washington Intern Program (8 scholarships) 5

Technology & Academic Support (13%): • Funding to the KY Virtual Library/Virtual Campus •

Technology & Academic Support (13%): • Funding to the KY Virtual Library/Virtual Campus • Provides K-12, postsecondary, and public libraries access to 65 electronic research databases • Facilitates 92. 4 million searches and 7. 9 million downloads annually • Staffs help desk to refer potential students to online programs • Provides online training programs to state agencies • Delivers internet service to campuses in 70 locations through the Kentucky Postsecondary Education Network 6

Research & Economic Development (12%): • Funding to KY Science & Technology Corporation supporting

Research & Economic Development (12%): • Funding to KY Science & Technology Corporation supporting several major research and economic development programs including: 1) Kentucky Science and Engineering Foundation, 2) the Kentucky Enterprise Fund and 3) EPSCo. R (the Experimental Program to Stimulate Critical Research) – Critical investments in innovation research and startup enterprises – Significant return-on-investment by leveraging venture capital investments and federal funding – Commercialization of research 7

About 7% of CPE’s General Fund Appropriations Support Statewide Coordination of Postsecondary Education: •

About 7% of CPE’s General Fund Appropriations Support Statewide Coordination of Postsecondary Education: • Providing leadership and a unifying voice for higher education • Advancing strategic goals through advocacy and initiatives • Statewide planning and accountability • Tuition setting and capital and operating budget development • Resolving competing needs/interests among campuses & sectors • Licensure of non-public colleges and universities • Approving and reviewing academic programs • Implementing transfer legislation and other statutory directives • Managing federal and foundation grants/programs • Driving improvements in student outcomes/diversity 8

The remainder (6%) of CPE’s General Fund supports data, facilities and operations: Operations &

The remainder (6%) of CPE’s General Fund supports data, facilities and operations: Operations & Contract Administration: • Contract management • Business services, human resources • Rent, utilities, equipment, supplies and travel Information Technology, Data Collection/Analysis: • Data collection/analysis for accountability purposes • Information requests and reporting • Applications development; technology support and administration • Research/policy analysis 9

2016 -18 Capital Request Background 2007 VFA study – Over 700 E&G facilities examined.

2016 -18 Capital Request Background 2007 VFA study – Over 700 E&G facilities examined. • Facilities were in relatively poor condition compared to industry standards. • $6. 1 Billion in asset preservation needs were projected to come due by 2018. • Sizable, sustained capital investment was needed, with focus on asset preservation along with new construction and expansion. 2014 -16 capital request • Characterized as the first installment of 3 -biennia $1. 8 Billion plan • Request used pools for each institution, supported by a list of projects • $607. 8 was funded in the biennial budget and the 2015 session • 39% asset preservation/renovation ($240. 1 M) • 61% new construction ($367. 8 M) 10

Capital Projects Request Proposed Funding Level (In Millions) Funding Category Requested 2017 -18 Bond

Capital Projects Request Proposed Funding Level (In Millions) Funding Category Requested 2017 -18 Bond Funds Debt Service Asset Preservation and Renovation New and Expanded Space $288. 0 312. 0 $ 25. 3 27. 4 Information Technology & Equipment . 40. 0. . 5. 2. Total State Request $640. 0 $ 57. 8 11

Higher Education Funding • Since 2008, the postsecondary institutions have lost $169 million or

Higher Education Funding • Since 2008, the postsecondary institutions have lost $169 million or 16% of their General Fund support • Looking at loss in nominal terms ignores impacts of: – – enrollment growth inflation (fixed costs increases) mandated cost increases (KERS; M&O) growth in campus funded student aid • The best way to understand these budget challenges is on a inflation adjusted per student basis • Tuition has not filled the gap caused by declining state support 12

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Tuition Statutory Responsibility KRS 164. 020 Powers and duties of council. The Council on

Tuition Statutory Responsibility KRS 164. 020 Powers and duties of council. The Council on Postsecondary Education in Kentucky shall: Determine tuition and approve the minimum qualifications for admission to the state postsecondary educational system. In determining the tuition for non-Kentucky residents, the council shall consider the fees required of Kentucky students by institutions in adjoining states, the resident fees charged by other states, the total actual per student cost of training in the institutions for which the fees are being determined, and the ratios of Kentucky students to non-Kentucky students comprising the enrollments of the respective institutions, and other factors the council may in its sole discretion deem pertinent; 18

Tuition and Fee Policy • Funding Adequacy – The Council seeks to balance the

Tuition and Fee Policy • Funding Adequacy – The Council seeks to balance the affordability of postsecondary education for Kentucky’s citizens with the institutional funding necessary to accomplish the goals of HB 1 and the Strategic Agenda. • Shared Benefits and Responsibility – The Council and the institutions believe that funding postsecondary education is a shared responsibility of state and federal governments, students and families, and postsecondary education institutions. • Affordability and Access – The Council and the institutions are committed to ensuring that college is affordable and accessible to all academically qualified Kentuckians, with particular emphasis on adult learners, part-time students, minority students, and students from low and moderate income backgrounds. 19

Tuition and Fee Policy (Cont’d) • Affordability and Access – The Council believes that

Tuition and Fee Policy (Cont’d) • Affordability and Access – The Council believes that no citizen of the Commonwealth who has the drive and ability to succeed should be denied access to postsecondary education in Kentucky because of inability to pay. – Access should be provided through a reasonable combination of savings, family contributions, work, and financial aid, including grants and loans. 20

Tuition Setting Process • Six-month process involving multiple stakeholders – – Council president and

Tuition Setting Process • Six-month process involving multiple stakeholders – – Council president and staff Campus presidents and chief budget officers Tuition Development Work Group Council members • Data driven and transparent – – – – Regional and national comparisons of sticker price and net price Trends in federal, state, and campus funded student aid Regional and national comparisons of family income and student debt Trends in state appropriations, tuition revenue, and total public funds Regional and national funding comparisons Trends in student enrollment (resident and NR; UG and graduate) Anticipated fixed cost increases and uses of tuition revenue 21

Sticker Prices 22

Sticker Prices 22

Sticker Prices 23

Sticker Prices 23

Sticker Price Change • Every year since 2009 the Council has adopted tuition and

Sticker Price Change • Every year since 2009 the Council has adopted tuition and fee ceilings (i. e. , resident undergraduate rates) • The ceilings regulate both tuition and mandatory fees • Average rate of increase has been reduced by more than 60% • Increases at research and comprehensive universities have been below regional and national averages • Increases at KCTCS have been among the lowest in our region and nationally 25

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Sticker Prices 27

Sticker Prices 27

Sticker Prices 28

Sticker Prices 28

Sticker Prices 29

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Net Price Comparison • Most students do not pay published sticker prices for their

Net Price Comparison • Most students do not pay published sticker prices for their college education • Net price is defined as total cost of college attendance minus all forms of student grant aid (funds not repaid) • The average net price at Kentucky research institutions is below the regional average • The net price at Kentucky comprehensive universities is among the lowest in our region • Student aid covers the cost of tuition, fees, and books for all but the highest income students at KCTCS 32

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Student Loan Debt Comparison • Average student loan debt of graduating seniors and the

Student Loan Debt Comparison • Average student loan debt of graduating seniors and the proportion graduating with debt are important measures of college affordability • Council staff performs annual assessments of student loan debt as part of the tuition setting process • For the class of 2014, about 64% of graduated with debt • On average, about 9. 5% of monthly wages would be required to make monthly loan payments (2008; 5 years out) • Kentucky has historically been, and continues to be, a relatively low student loan debt state 36

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What’s new in Frankfort? HB 303 created… Postsecondary Education Performance Fund: • $42. 9

What’s new in Frankfort? HB 303 created… Postsecondary Education Performance Fund: • $42. 9 million, formed by carving out 5% of the institutions’ base funding (excluding KSU) • Distributed based on achievement of performance goals and metrics enacted* by the General Assembly Postsecondary Education Working Group: • CPE & 9 Institution presidents + Governor, Speaker, and Senate Pres. (or their reps) • Task: “develop a comprehensive funding model for the allocation of state General Fund appropriations for institutional operations. ” – Include elements of campus performance, mission, and enrollment, and others as needed. – Its work is due to Interim Joint Comm. on Education Dec. 1 41

The model and going forward… Model (as it stands now): • Outcomes based, distributes

The model and going forward… Model (as it stands now): • Outcomes based, distributes 100% of allocable resources based on rational criteria. – – 70% based on performance (student success, course completion) 30% for maintenance & operations, institutional support, academic support Includes all 4 -years, but at implementation, no funding would move between sectors • Includes a small school adjustment to minimize impact on smaller campuses • Uses “hold harmless” and “stop loss” provisions in early years of implementation Legislation to be introduced for the 2017 session… • 42

Making Kentucky STRONGER BY DEGREES Kentucky Council on Postsecondary Education Shaun Mc. Kiernan, Senior

Making Kentucky STRONGER BY DEGREES Kentucky Council on Postsecondary Education Shaun Mc. Kiernan, Senior Associate for Budget & Finance November 2, 2016

http: //apps. cpe. ky. gov/temp_docs/fin/KY_Model_w_ROI_4. swf 44

http: //apps. cpe. ky. gov/temp_docs/fin/KY_Model_w_ROI_4. swf 44