Legislature(2005 - 2006)SENATE FINANCE 532

03/21/2006 05:00 PM Senate COMMITTEE ON UNIVERSITY OVERSIGHT


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05:05:31 PM Start
05:05:45 PM Alaska Higher Education and the Future
06:12:55 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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+ Presentations by: TELECONFERENCED
National Center for Public Policy and
Higher Education
Western Interstate Commission on Higher
Education
                     ALASKA STATE LEGISLATURE                                                                                 
         SENATE SPECIAL COMMITTEE ON UNIVERSITY OVERSIGHT                                                                     
                          March 21, 2006                                                                                        
                            5:05 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Gary Stevens, Chair                                                                                                     
Senator Con Bunde                                                                                                               
Senator Thomas Wagoner                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Ben Stevens                                                                                                             
Senator Lyman Hoffman                                                                                                           
Senator Kim Elton                                                                                                               
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Alaska Higher Education and the Future                                                                                          
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
See minutes from 2/7/06, 2/28/06 and 3/20/06 SUOV meetings                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Julie Bell, Education Program Director                                                                                          
National Conference of State Legislatures (NCSL)                                                                                
7700 East First Place                                                                                                           
Denver, CO 80230                                                                                                                
POSITION STATEMENT:  Introduced David Longanecker                                                                             
                                                                                                                                
David Longanecker, Executive Director                                                                                           
Western Interstate Commission for Higher Education                                                                              
Denver, CO                                                                                                                      
POSITION STATEMENT:  Delivered PowerPoint presentation                                                                        
                                                                                                                                
Wendy Redman, Vice President                                                                                                    
University Relations                                                                                                            
University of Alaska                                                                                                            
P.O. Box 755000                                                                                                                 
Fairbanks, AK 99775                                                                                                             
POSITION STATEMENT:  Discussion participant                                                                                   
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR GARY STEVENS called the Senate Special Committee On                                                                     
University Oversight meeting to order at 5:05:31 PM.                                                                          
                                                                                                                                
             ^Alaska Higher Education and the Future                                                                        
                                                                                                                                
CHAIR GARY STEVENS asked Ms. Bell to proceed.                                                                                   
                                                                                                                                
5:05:45 PM                                                                                                                    
                                                                                                                                
JULIE BELL, introduced Mr. Longanecker.                                                                                         
                                                                                                                                
5:07:56 PM                                                                                                                    
                                                                                                                                
DAVID LONGANECKER,  Executive Director of the  Western Interstate                                                               
Commission for Higher Education,  (WICHE) delivered the following                                                               
PowerPoint presentation  titled "Alaska Higher Education  and the                                                               
Future: The Imperfect Storm."                                                                                                   
                                                                                                                                
5:09:09 PM                                                                                                                    
                                                                                                                                
Slide:                                                                                                                          
Alaska's Unique Story: The Imperfect Storm                                                                                      
                                                                                                                                
The Confluence of Three Waves (Not Huge But Significant)                                                                        
Uncertain Demand for Higher Education                                                                                           
The Change in Who You Are Serving                                                                                               
Constrained Finances  (or not)                                                                                                  
                                                                                                                                
Slide:                                                                                                                          
The First Wave - Uncertain Demand                                                                                               
                                                                                                                                
   · Countervailing demographic forces                                                                                          
   · Stable recent enrollments despite substantial increases in                                                                 
     likely population                                                                                                          
                                                                                                                                
Slide:                                                                                                                          
What's pushing the wave?                                                                                                        
                                                                                                                                
   1. Simple Demographics                                                                                                       
        · Projected 10 percent increase in college age                                                                          
          population (2005-2015)                                                                                                
        · Projected 10 percent decrease in high school graduates                                                                
          (2006-2016)                                                                                                           
        · Contrasted with a 25 percent increase in high-school                                                                  
          graduates (1996-2006)                                                                                                 
        · Even greater increase in initial college participation                                                                
          (33 percent increase in freshman between 1996 and                                                                     
          2002, and more since)                                                                                                 
        · But slight decline (5 percent) in total enrollment                                                                    
          from 1993 to 2003                                                                                                     
                                                                                                                                
5:11:35 PM                                                                                                                    
                                                                                                                                
SENATOR BUNDE asked for the source of the demographics.                                                                         
                                                                                                                                
MR.  LONGANECKER  responded the  first  numbers  relating to  the                                                               
projected population growth  in Alaska over the  next decade came                                                               
from the  Census and  the numbers on  high school  graduates came                                                               
from WICHE projections, which were updated two years ago.                                                                       
                                                                                                                                
SENATOR BUNDE said the Department  of Labor has projected that in                                                               
the next  ten years the  broadest part of the  Alaskan population                                                               
will  be the  very young  and the  very old.  The 30-50  year age                                                               
range will  represent the smallest  population. He  observed that                                                               
if WICHE  were to figure in  that information it might  add "some                                                               
imperfection to our storm."                                                                                                     
                                                                                                                                
Senator Gary Wilken joined the meeting at 5:13:08 PM.                                                                         
                                                                                                                                
MR. LONGANECKER continued the presentation.                                                                                     
                                                                                                                                
Slide:                                                                                                                          
   2. Policy Goal - Greater post-secondary participation                                                                        
        · But high school completion going down (Measuring                                                                      
          Up 2004: B- on Preparation - down from a B+)                                                                          
               Alaska - 77 percent* (down from 81                                                                               
               percent in 1990)                                                                                                 
               U.S. - 75 percent*                                                                                               
          *18-24 year olds with high-school degrees                                                                             
          from U.S. census                                                                                                      
                                                                                                                                
SENATOR  BUNDE  offered the  explanation  that  during the  1990s                                                               
"empty diplomas" were  given and now students  must demonstrate a                                                               
certain level of proficiency to receive a diploma.                                                                              
                                                                                                                                
MR.  LONGANECKER  noted  that  Alaska had  one  of  the  sharpest                                                               
declines in the nation.                                                                                                         
                                                                                                                                
Slide:                                                                                                                          
     Policy Goal - Greater post-secondary participation                                                                         
        · Increasing share going on to college                                                                                  
          (Measuring Up: C on Participation; up from a                                                                          
          D+ in 2002)                                                                                                           
               Alaska - 47 percent (up from                                                                                     
               40 percent in 1992)                                                                                              
               WICHE West - 50 percent                                                                                          
               U.S. - 59 percent                                                                                                
                                                                                                                                
Slide:                                                                                                                          
   3. Policy Goal - Lousy success in completing college                                                                         
     (Measuring Up: F on Completion)                                                                                            
        · Associate degree production (per 100 high school                                                                      
          graduates)                                                                                                            
               Alaska - 13                                                                                                      
               WICHE West - 23                                                                                                  
               U.S. - 19                                                                                                        
        · Baccalaureate degree production (per 100 high                                                                         
          school graduates)                                                                                                     
               Alaska - 21                                                                                                      
               WICHE West - 44                                                                                                  
               U.S. - 48                                                                                                        
5:16:24 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY STEVENS  explained that  the  fact that  UA has  open                                                               
admissions  is often  used as  a justification  for poor  college                                                               
completion  rates and  it'd  be interesting  to  compare it  with                                                               
other colleges that have open admissions.                                                                                       
                                                                                                                                
MR. LONGANECKER said that might be an explanation for the                                                                       
baccalaureate degree completion rate, but it wouldn't logically                                                                 
apply to the associate degree category.                                                                                         
                                                                                                                                
He continued with the presentation.                                                                                             
                                                                                                                                
Slide:                                                                                                                          
Why is This Important?                                                                                                          
                                                                                                                                
   · World leaders in higher education attainment:                                                                              
        · Canada, Finland, Ireland, Japan, Korea.                                                                               
   · Second Tier:                                                                                                               
        · U.S., Australia, Belgium, France, Norway, Spain,                                                                      
          Sweden, U.K.                                                                                                          
                                                                                                                                
Declining participation in postsecondary                                                                                        
                                                                                                                                
5:18:59 PM                                                                                                                    
                                                                                                                                
Slide:                                                                                                                          
The Second Wave - Those we serve will be harder to serve                                                                        
                                                                                                                                
An increasing  share of higher  education's population  is coming                                                               
from  communities that  higher  education  traditionally has  not                                                               
served well.                                                                                                                    
                                                                                                                                
   · Communities of color will supply 44 percent of Alaska's                                                                    
        high school graduates by 2015-2016 (up for 38 percent                                                                   
     today)                                                                                                                     
   · Both white, non-Hispanic and American Indian/Alaska Native                                                                 
        high school graduates will decline (21 percent and 8                                                                    
     percent, respectively)                                                                                                     
                                                                                                                                
5:22:11 PM                                                                                                                    
                                                                                                                                
Slide:                                                                                                                          
Historic  success, or  lack thereof,  of  low-income students  in                                                               
higher education                                                                                                                
                                                                                                                                
   · In the U.S.: Participation dropped from 27.5 to 23.1                                                                       
     percent (1999-2001)                                                                                                        
                                                                                                                                
CHAIR  GARY  STEVENS  mentioned  the  purchasing  power  of  Pell                                                               
Grants.                                                                                                                         
                                                                                                                                
MR. LONGANECKER acknowledged the Pell  Grant issue and noted that                                                               
another reason  is that the military  is recruiting aggressively.                                                               
It's  disturbing, he  said,  that  you're more  likely  to go  to                                                               
college if  you're rich and  not very  smart than if  you're poor                                                               
and very smart.                                                                                                                 
                                                                                                                                
He continued the presentation.                                                                                                  
                                                                                                                                
Slide:                                                                                                                          
The Third Wave - Limited Resources (or not)                                                                                     
                                                                                                                                
   · Alaska provided 9.8 percent of state appropriations for                                                                    
     higher education in FY 2005                                                                                                
                                                                                                                                
   · The good news: That 9.8 percent is much more than 6.9                                                                      
     percent provided by Alaska in 1995                                                                                         
                                                                                                                                
   · The rest of story: The 9.8 percent is still less than the                                                                  
        12 percent WICHE average or the 10.8 percent national                                                                   
     average                                                                                                                    
                                                                                                                                
5:26:36 PM                                                                                                                    
                                                                                                                                
Slide:                                                                                                                          
The Net Effect on Institutional Resources                                                                                       
                                                                                                                                
   · Above national average in total resources by institution                                                                   
     type                                                                                                                       
   · Function of the Alaska cost dilemma - It simply costs more                                                                 
     to do business in Alaska                                                                                                   
        · Lack of economies of scale                                                                                            
        · Above average tuition levels (a bit more for                                                                          
          two-year students; average for four-year                                                                              
          students)                                                                                                             
        · More state support, on average                                                                                        
        · A larger share of overall budget to research (again,                                                                  
          function of economies of scale)                                                                                       
                                                                                                                                
Slide:                                                                                                                          
The Net Effect on Students                                                                                                      
                                                                                                                                
   · The good news:                                                                                                             
        · On average, affordable price                                                                                          
        · Reasonable tuition                                                                                                    
        · Low price compared to income                                                                                          
             · Family income needed for college (NCHEMS)                                                                        
                  · 4 years AK 21 percent, U.S. 29 percent                                                                      
                  · 2 years: AK 20 percent, U.S. 22 percent                                                                     
                                                                                                                                
   · The bad news: Financial Aid                                                                                                
        · Excellent loan program for middle-income                                                                              
        · Awfully modest need-based financial aid                                                                               
                                                                                                                                
5:30:14 PM                                                                                                                    
                                                                                                                                
Slide:                                                                                                                          
State Support for Financial Aid                                                                                                 
                                                                                                                                
   · State need-grant aid per FTE student (2003-2004)                                                                           
        · Alaska:        $0                                                                                                     
        · WICHE:         $324                                                                                                   
        · U.S.:          $417                                                                                                   
        · Washington:    $505                                                                                                   
                                                                                                                                
   · The news                                                                                                                   
        · 2005-2006:          $625,000 through ACPE                                                                             
        · 2006-2007:          Government's initiative to                                                                        
                              transfer $20 million will                                                                         
                              provide another $1 million                                                                        
                              annually                                                                                          
                                                                                                                                
5:32:10 PM                                                                                                                    
                                                                                                                                
Slide:                                                                                                                          
The Future: Projected Structural Deficits for Everyone                                                                          
     The chart shows the state and local surplus or                                                                             
     shortfall as a percent of baseline revenues.                                                                               
                                                                                                                                
MR. LONGANECKER  explained that this  is the demand  for services                                                               
given current  funding levels and  revenue streams. Alaska  is on                                                               
the national average  on this parameter. However,  because of the                                                               
changes in  gas and  oil revenues  and what  could happen  in the                                                               
future,  it's  difficult  to   predict  what  Alaska's  financial                                                               
circumstances will be in the future.                                                                                            
                                                                                                                                
5:33:40 PM                                                                                                                    
                                                                                                                                
SENATOR  BUNDE mentioned  data from  the previous  day indicating                                                               
that Wyoming funds higher education at a high rate.                                                                             
                                                                                                                                
MR.  LONGANECKER  clarified  that  the  slide  relates  to  state                                                               
budgets and not higher education  funding. He agreed that Wyoming                                                               
has been generous  and creative in their funding  and he suspects                                                               
that many of the ideas came from Alaska.                                                                                        
                                                                                                                                
5:35:11 PM                                                                                                                    
                                                                                                                                
Slide:                                                                                                                          
The Makings for the Imperfect Storm                                                                                             
                                                                                                                                
   · Uncertain demand - 10 percent increase to 10 percent                                                                       
     decline                                                                                                                    
                                                                                                                                
   · 10 percent increase in college age population                                                                              
                                                                                                                                
   · Limited resources (or not) -- potential 5 percent                                                                          
     structural deficit -- but gas and oil may save the day                                                                     
                                                                                                                                
5:36:14 PM                                                                                                                    
                                                                                                                                
Slide:                                                                                                                          
Weathering This Imperfect Storm                                                                                                 
                                                                                                                                
   · Maintain the status quo                                                                                                    
        · Lose ground on economic development                                                                                   
        · Lose ground on quality of life                                                                                        
                                                                                                                                
                                                                                                                                
   · Tackle the gnarly task - policies in synch                                                                                 
        · Economically competitive                                                                                              
        · High quality of life                                                                                                  
        · Socially equitable                                                                                                    
        · But not without sacrifice                                                                                             
        · No silver bullets - you get what you pay for                                                                          
                                                                                                                                
5:38:46 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY STEVENS  mentioned that  tuition is  now the  same or                                                               
nearly the  same on all  UA campuses  and that more  students are                                                               
entering  the  university  system   now,  but  fewer  adults  are                                                               
attending. He said those points deserve further discussion.                                                                     
                                                                                                                                
WENDY  REDMAN, Vice  President of  University  Relations for  the                                                               
University of  Alaska, said she could  provide updated enrollment                                                               
information. In the last six  years the overall enrollment for UA                                                               
is up  17 percent  and first  time freshmen  enrollment is  up 45                                                               
percent. She  said that the  data doesn't reflect that  in Alaska                                                               
Native high school graduation rates are improving.                                                                              
                                                                                                                                
SENATOR  WAGONER noted  that  the UA  open  admissions policy  is                                                               
different  than other  structures. He  asked Mr.  Longanecker for                                                               
his opinion  on whether  that would have  drawbacks or  allow the                                                               
university to grow into a more quality institution.                                                                             
                                                                                                                                
MR. LONGANECKER  expressed the  view that  outcomes are  a better                                                               
judge than inputs  and that that you could have  a quality system                                                               
as  an open  admissions system.  In fact,  he said,  it would  be                                                               
difficult not  to have open  admissions in Alaska and  still have                                                               
broad access.  There are  tradeoffs, but you  don't have  to have                                                               
selective admissions to make it work, he said.                                                                                  
                                                                                                                                
SENATOR  WAGONER  responded his  point  is  that with  true  open                                                               
admissions  the only  classes that  students can't  enroll in  at                                                               
registration are those with prerequisites. In maintaining that                                                                  
policy the university might be wasting instructional funds.54903                                                                
                                                                                                                                
MR.  LONGANECKER said  the  advantage  of a  combined  system is  that                                                          
community colleges are funded better that way.                                                                                  
                                                                                                                                
CHAIR GARY STEVENS  acknowledged that the goal is to  get more college                                                          
graduates, but  that he  doesn't feel bad  that students  take courses                                                          
and don't always receive a degree.                                                                                              
                                                                                                                                
MR. LONGANECKER agreed that some  students attend college for purposes                                                          
other than  attaining a  degree and there's  nothing wrong  with that.                                                          
The unfortunate thing is that some  students aren't well served and so                                                          
they don't benefit very much from the education.                                                                                
                                                                                                                                
MS. REDMAN  reported that  the university  is using  Accuplacement and                                                          
other programs to more accurately  place students in classes for which                                                          
they  are prepared.  She  acknowledged that  she has  a  bias for  the                                                          
community college system, but a  difficulty associated with a combined                                                          
system is  that community  college programs tend  to lack  status. She                                                          
noted  that  it's been  advantageous  that  President Hamilton  values                                                          
workforce training.                                                                                                             
                                                                                                                                
She said her last point related  to polling. When the Anchorage campus                                                          
followed-up on students who dropped out  of a degree program or just a                                                          
particular course, the overwhelming response  was that the student got                                                          
what  they  came  for.  She  acknowledged  that  dropout  rate  is  an                                                          
important measure and more follow-up is needed.                                                                                 
                                                                                                                                
SENATOR GARY WILKEN  said it's been a pleasure to  work with President                                                          
Hamilton. His leadership has really  turned the university around in a                                                          
short number of  years and he's happy  to have played a  small part in                                                          
that success.  He told Mr.  Longanecker that he found  his comparisons                                                          
interesting.                                                                                                                    
                                                                                                                                
MR. LONGANECKER responded  the difficulty with Alaska  is figuring out                                                          
how to make the comparisons.                                                                                                    
                                                                                                                                
CHAIR GARY  STEVENS recapped the  presentation and emphasized  that he                                                          
would like  to have further  discussion on need-based  and merit-based                                                          
scholarships.                                                                                                                   
                                                                                                                                
MS. REDMAN  commented that the data  is interesting and one  thing the                                                          
university would continue  to work on is degree  completion. She noted                                                          
that  Alaska  has  a  relatively  low  number  of  jobs  that  require                                                          
baccalaureate  degrees. That  provides  some explanation  for the  low                                                          
completion data  because students may  need just a  class or two  or a                                                          
certification of  some type  so they  didn't intend to  stay to  get a                                                          
degree.                                                                                                                         
                                                                                                                                
MR. LONGANECKER  remarked that the  adult student population  would be                                                          
an  important part  in the  overall fabric  of the  university in  the                                                          
years to come.                                                                                                                  
                                                                                                                                
MS.  REDMAN added  she's been  alarmed at  the drop  in the  number of                                                          
older part-time  students and  the university is  making an  effort to                                                          
regain those  students even though  faculties tend to prefer  to teach                                                          
at traditional times.                                                                                                           
                                                                                                                                
MR. LONGANECKER  acknowledged that would  take work because  in Alaska                                                          
there is a lack of alternatives due  to a lack of population base. The                                                          
system  certainly isn't  consumer driven  as  it is  in Portland,  for                                                          
example.                                                                                                                        
                                                                                                                                
CHAIR GARY STEVENS observed it's  been his experience that evening and                                                          
weekend class schedules are favored by students but not by teachers.                                                            
                                                                                                                                
MS. REDMAN  mentioned the  term "swirling"  and said  the trend  is to                                                          
move from a  faculty-centered curriculum to one in  which the students                                                          
are in control.  Students are able to take courses  from any number of                                                          
schools that  are in different  locations. Sooner or later,  she said,                                                          
some entrepreneur will develop a  system to hold students' accumulated                                                          
credits so that there's a common transcript.                                                                                    
                                                                                                                                
MR. LONGANECKER said  because of population, Alaska will  have to rely                                                          
on  clever  people  in  the university  to  provide  a  business-smart                                                          
education-rich approach for students.                                                                                           
                                                                                                                                
CHAIR GARY STEVENS agreed it's not  a good idea to ignore institutions                                                          
that are offering  classes in new and different ways  because UA could                                                          
lose its students to other systems.                                                                                             
                                                                                                                                
MR.  LONGANECKER  mentioned the  new  exchange  program between  WICHE                                                          
institutions that the University of  Alaska, Anchorage has been active                                                          
in helping  to develop.  Although it  isn't as  open as  when students                                                          
choose everything,  it will provide  broader access than  is currently                                                          
available.                                                                                                                      
                                                                                                                                
CHAIR GARY STEVENS thanked Mr.  Longanecker and Ms. Bell and adjourned                                                          
the meeting at 6:12:55 PM.                                                                                                    

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