Legislature(2015 - 2016)CAPITOL 106
03/02/2015 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| HB97 | |
| HB98 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 97 | TELECONFERENCED | |
| *+ | HB 98 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 97-AK PERFORMANCE SCHOLARSHIP: FINANCIAL AID
8:02:51 AM
REPRESENTATIVE COLVER, as sponsor, said HB 97 prohibits the
Department of Education and Early Development (EED) from
requiring an applicant for the Alaska Performance Scholarship
(APS) to also submit the Free Application for Federal Student
Aid (FAFSA). The APS rewards Alaska high school students for
their hard work, he stated, which is measured by coursework,
grade point average, and ACT, SAT, or WorkKeys test scores. The
FAFSA is used to determine a student's eligibility for federal
financial aid based on the family's financial situation, he
explained. He said that [HB 97] was introduced because there is
no compelling state interest in gathering personal financial
data to award a merit-based scholarship.
8:04:42 AM
REPRESENTATIVE COLVER pointed out that this bill serves to
reduce paperwork as well as protect privacy. He noted that
parents in his district, who were not seeking financial aid,
could not understand why they had to fill out the FAFSA. He
suggested that EED "describe what their mission is in requiring
that, because it sure came with a lot freight-huge fiscal notes
on retooling data." He said he believed that the APS was a
simple program based on merit and not a data-mining operation,
but he may be mistaken. It may be difficult to move this bill
because of the financial cost, but he said that going through
this process may lead to streamlining education funding, so it
can go into the classroom instead paying for data management.
8:07:30 AM
REPRESENTATIVE SEATON recalled that the APS is not just a cash
grant, but a student must apply for all other money and then the
APS would fill in over a maximum of six years. If that is the
case, "are we now saying that it wouldn't be a last dollar
scholarship?" The scholarship would then be available regardless
of whether the student had expenses to cover or not, he
surmised.
8:08:48 AM
DAVID SCOTT, Staff, Representative Jim Colver, Alaska State
Legislature, said that the Commission on Post-Secondary
Education can answer that; however, it is his understanding that
the scholarship is based on merit: grades and test scores.
8:09:51 AM
REPRESENTATIVE VAZQUEZ asked about the application for the APS.
REPRESENTATIVE COLVER said he will provide a copy.
8:10:37 AM
MR. SCOTT said that the APS is created and administered by
Alaskans, and he does not think the FAFSA should be required to
award a merit-based scholarship that is created by Alaskans. The
constitution provides a right to privacy, "and that is something
we all love and we all cherish." He said there is private
financial information in the FAFSA that is not necessary in
order to award a merit-based scholarship.
8:12:16 AM
DIANE BARRANS, Executive Director, Alaska Commission on Post-
Secondary Education, said she understands the sponsor's concern
about the apparent disconnect between a merit-based scholarship
and the need to use FAFSA as part of the qualifying information;
however, Representative Seaton is correct in that there was no
intent for the scholarship to be "walking-around money." The
cost of the student's education and other available financial
assistance were to be used to determine, to the extent that the
student qualified for the scholarship, how much a student could
receive. If a student's unmet costs were less than the
scholarship amount, the student would only be awarded the unmet
costs.
8:13:32 AM
REPRESENTATIVE KREISS-TOMKINS asked if the APS is a hybrid of a
need-based and merit-based scholarship.
MS. BARRANS said the term "need-based" usually denotes a
financial need demonstrated by a given family, but all
scholarships are forms of financial aid.
8:14:30 AM
REPRESENTATIVE SEATON questioned if passing HB 97 would create a
cash benefit to students whether they attend college or not. He
asked the question if the APS is merely a reward or if it is a
scholarship to go toward qualified institutions. The "last-
dollar" concept was incorporated into the original bill, and he
asked what HB 97 will do regarding the financial liability of
the state to provide money to students.
MS. BARRANS said that she does not see that aspect of the
program changing. She noted that FAFSA is a universal financial
aid application, and about 85 percent of students use it. The
FAFSA allows the state to ensure that students apply for any
sort of aid that was available to them. The intent was to spend
the APS funds as efficiently and effectively as possible, and it
was not intended to be money that could be spent on anything
other than attending a post-secondary institution, she
explained. The commission is the grant administrating agency for
the state, so it already receives FAFSA information. She said
that without requiring students to complete yet another form,
the FAFSA is an efficient means of standing up the program and
getting information on students before even knowing whether they
are eligible for the APS. The institutions do not learn which
students are eligible for the APS until late July, so the
commission would have very little time to reach out to the
eligible students, make an application available, and make sure
they get it in in time for the funds to be dispersed to the
schools.
MS. BARRANS said that using FAFSA not only accomplishes the
statutory goals of having the students apply for other aid, but
the form, itself, indicates that the application is for Alaska's
grant and scholarships programs. It is also a means to get
student addresses, she noted. The process would have to be
replicated and students would need to be reeducated that the
application could not be used for the APS, and, in fact, Section
2 of HB 97 actually nullifies any application. If the bill
passes, there would be no application process, whatsoever, and
one would need to be created through the regulatory process,
which may take until 2016 or 2017.
8:20:12 AM
REPRESENTATIVE VAZQUEZ asked what bill created the APS and
whether committee members could get a copy, including "what you
perceive to be the legislative intent."
MS. BARRANS offered to ask the Legislative Information Office
for legislative information. She suggested reading the statute,
as well.
8:21:27 AM
REPRESENTATIVE VAZQUEZ asked whether Ms. Barrans is saying that
the APS is a scholarship of last resort.
MS. BARRANS said, no. The Alaska Education Grant would be a
grant of last resort; however, most of the APS students do not
qualify for it, so if the only other source of financial aid a
student has is the APS, "you could certainly use that term."
CHAIR KELLER said there will be time to look at that history and
noted that it was part of the governor's bill. He sees this bill
as a way to discuss the legislature's intent.
8:22:49 AM
REPRESENTATIVE COLVER said the APS was endowed at $400 million,
and he asked what revenue was "spinning off every year."
MS. BARRANS said that the Higher Education Investment Fund was
established a year after the APS program was created, and the
legislature set aside $400 million. She said she thinks it has a
6 to 7 percent return. It is managed as a subset of the general
fund, and in June, 2014, there was $444 million in the fund. The
fund is a source for both the Alaska Performance Scholarship and
the Alaska Education Grant, she explained.
REPRESENTATIVE COLVER asked how much has been awarded and the
amount needed to administer the programs.
8:24:17 AM
MS. BARRANS said the administrative costs are not paid with
those funds. The Alaska Student Loan Corporation pays, she
explained, and the fund has been "stepped up" each year, as
additional classes graduate. In FY15, the amount for
scholarships was about $11 million, and there was about $8
million for grants. She offered to provide the accumulated total
spent to date.
REPRESENTATIVE COLVER indicated that the fund has $19 million in
outflow and "we've gained $44 million in the fund." He asked how
the commission pays for the administrative costs.
MS. BARRANS said the Alaska Student Loan Corporation pays for
the operating costs of the commission-not the GF [general fund].
REPRESENTATIVE COLVER asked about the [fiscal note] of retooling
the application evaluation, which is $144.2 million this year
and then $91.7 million annually.
MS. BARRANS corrected him, saying it is thousands, not millions.
REPRESENTATIVE COLVER asked, "This would have nothing to do with
general fund budgets … it could be funded out of revenues from
the scholarship fund as a possibility, but now you're saying
that this is going to come out of the budget of the Post-
Secondary Education Commission?"
MS. BARRANS clarified that the costs have been paid by the
Student Loan Corporation, but these new costs created by HB 97
would come from the Higher Education Investment Fund.
REPRESENTATIVE COLVER said it is, therefore, a covered cost for
doing business to administer the loan fund. So, "we're not
creating a budgetary issue; this is a fully funded, endowed
program that's spinning off excess revenue." He asked if Alaska
wants to use the federal form for financial aid, or "do we want
Alaska to have our own form that merely identifies students'
academic achievements?" As he understands, no money goes to the
student but is distributed to the institution, he stated.
MS. BARRANS said the funds are dispensed through the
institution, which are then released to the students if they do
not have unpaid fees.
8:29:01 AM
REPRESENTATIVE COLVER asked about the entire process.
MS. BARRANS said to qualify for the APS, a student must complete
the rigorous high school curriculum, have a certain GPA, and
score at minimum levels on one of the standardized tests. The
determination for eligibility is made in a student's senior
year, and the department has that information within its
existing data collection. School districts provide eligibility
information to the department by July 15, and the data is
transmitted to the commission. The commission takes the
eligibility information and matches it to the FAFSA data as to
the student's current address. The students are notified through
mail that they have qualified for the award and at what level.
The students are encouraged to use an online portal where they
can go in and register and monitor the status of their state
financial aid. The scholarship is available to complete the cost
of education that is not offered through other grants or other
scholarships. The APS can replace the amount that the family
would be expected to pay, so it is available before a student
needs to take out a loan.
8:33:03 AM
REPRESENTATIVE SEATON surmised that if a student was not
required to apply to the FAFSA for Pell grants or other federal
aid, it may cause more funding to be drawn from the APS. "Is
that why the FAFSA is required?"
MS. BARRANS said yes, that is the objective. The students should
maximize the attainment of available money, including Pell
grants and state grants, in addition to the APS.
8:34:17 AM
CHAIR KELLER asked if the Higher Education Investment Fund ever
operates in excess, putting money back into the general fund.
MS. BARRANS noted that the Department of Revenue manages that
fund, and there is no mechanism for overflow money to the
general fund. The fund has only been in existence for four
years, and it is very unpredictable what future draws will be.
There is a brief history with the APS. About 32 percent of each
graduating class tends to be eligible, but the number of
eligible students who use it fluctuates. If there is a jump up
in its use, the financial demands will increase, and there needs
to be more time to calculate average expenses, she said.
8:36:13 AM
REPRESENTATIVE DRUMMOND asked which institutions the APS can be
used for.
MS. BARRANS said all University of Alaska campuses and six or
seven others, which she offered to provide. The APS can only be
used in Alaska.
8:37:14 AM
REPRESENTATIVE COLVER asked what triggers the request for the
FAFSA application.
MS. BARRANS said the FAFSA information already comes to the
commission as the state's grant administrating agency. It
receives the information for any Alaska resident or anyone
planning to attend an Alaska institution.
REPRESENTATIVE COLVER said, obviously, some students would not
fill out the FAFSA so there would be a trigger when they
qualified for the APS. He asked what that data base "looks
like."
MS. BARRANS said she does not know exactly, but a substantial
majority of students have already completed that form before the
commission receives the eligibility information. There is a
campaign informing students that they need to file the FAFSA by
the end of June. Because of funding availability, the deadline
extends to December, so students can continue to apply.
8:39:58 AM
CHAIR KELLER said that he hopes the school districts are
listening. Financial counselors at different schools have the
responsibility to communicate this to the students, and, in
Representative Colver's case, a Valley resident "just missed"
the deadline. He noted that the students need to be informed.
MS. BARRANS said that, for the first time, the commission
partnered with the University of Alaska to help identify
students who fell into that category of being eligible but had
not completed the FAFSA.
8:41:13 AM
REPRESENTATIVE SEATON noted that, under the regulations, there
is a process for institutions that cannot receive federal funds,
and he asked about those institutions.
MS. BARRANS said there are a few technical institutions that
have not received accreditation.
8:42:07 AM
REPRESENTATIVE VAZQUEZ asked for information on legislative
intent by March 23. "If you're correct on the legislative
intent, I think it sheds a whole new light on this bill." She
was under the impression that only the students' performance was
looked at, and the APS would be based solely on that.
MS. BARRANS clarified that in terms of a student's eligibility,
the APS is based solely on meeting the merit-based requirements.
The question is to what extent does a student have unmet
educational costs that can be covered. That is not determined by
the FAFSA; the school's financial aid office determines what
amount of unmet costs the student has, she stated. In most
cases, students have unmet costs, and it is very rare for the
APS to be reduced.
8:45:00 AM
REPRESENTATIVE COLVER said there are two fiscal notes on the
bill, and he asked to hear from the Department of Education.
8:46:17 AM
LES MORSE, Deputy Commissioner, Department of Education and
Early Development, said that, regarding the fiscal notes, EED
was looking at the most efficient means to collect information
that FAFSA now provides. There may be a way to combine the two
fiscal notes, but there needs to be more dialogue with the
sponsors. He said the FAFSA collects student contact information
that the department does not have, so that would be a new data
collection system, along with the eligibility for students.
"Every time we add an element to our data collection, it costs
us approximately $40,000 in programing," he said, and the new
system would have about four different elements. The remaining
costs in the fiscal note include the outreach and manuals. It
would be a one-time cost, but there would still be some ongoing
expenses experienced by the commission, he stated.
REPRESENTATIVE COLVER surmised that just the student addresses
need to be added and transmitted to the commission.
MR. MORSE said the student contact information would be the new
element to collect, and "we would pull the eligibility
information from the July 15 report that all districts do for
other reporting requirements … so the APS information would all
be collected together." All of the districts would have an
additional report due in late May or June, he added.
REPRESENTATIVE COLVER asked if the FAFSA tracks student
information through a student ID or a Social Security number.
MR. MORSE said he cannot not speak to the FAFSA "and all of its
requirements," but EED only uses a student ID number.
REPRESENTATIVE COLVER said the FAFSA will use the Social
Security numbers, and somewhere there is a linking factor
between the department data base and the FAFSA data base.
8:52:45 AM
MR. MORSE said that the EED information can generally be matched
based on gender, date of birth, and name.
8:53:22 AM
CHAIR KELLER announced that HB 97 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 97.pdf |
HEDC 3/2/2015 8:00:00 AM |
HB 97 |
| HB 97 - Sponsor Statement.PDF |
HEDC 3/2/2015 8:00:00 AM |
HB 97 |
| HB 97 - what is FAFSA.PDF |
HEDC 3/2/2015 8:00:00 AM |
HB 97 |
| HB 97 -- FAFSA paper application.pdf |
HEDC 3/2/2015 8:00:00 AM |
HB 97 |
| HB 97 - APS.PDF |
HEDC 3/2/2015 8:00:00 AM |
HB 97 |
| HB 97 -- 20 U.S.C. 1090.PDF |
HEDC 3/2/2015 8:00:00 AM |
HB 97 |
| HB 97 -- 20 U.S.C. 1082 (m)(1)(c).PDF |
HEDC 3/2/2015 8:00:00 AM |
HB 97 |
| 20 AAC 16.215.PDF |
HEDC 3/2/2015 8:00:00 AM |
|
| HB97 Fiscal Noten2.pdf |
HEDC 3/2/2015 8:00:00 AM |
HB 97 |
| HB97 Fiscal Note.pdf |
HEDC 3/2/2015 8:00:00 AM |
HB 97 |
| HB 98.pdf |
HEDC 3/2/2015 8:00:00 AM |
HB 98 |
| HB 98 - SPONSOR STATEMENT.docx |
HEDC 3/2/2015 8:00:00 AM |
HB 98 |
| HB098-ACS-TRC-02-26-15 Fiscal Note.pdf |
HEDC 3/2/2015 8:00:00 AM |
HB 98 |
| HB 98 Letter of Support Academy.pdf |
HEDC 3/2/2015 8:00:00 AM |
HB 98 |
| HB98 Letter of Support NEA.pdf |
HEDC 3/2/2015 8:00:00 AM |
HB 98 |