Legislature(2011 - 2012)SENATE FINANCE 532
02/15/2012 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB104 | |
| SB130 | |
| SB144 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 104 | TELECONFERENCED | |
| + | SB 130 | TELECONFERENCED | |
| + | SB 144 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR HOUSE BILL NO. 104(RLS)
"An Act renaming the Alaska performance scholarship
and relating to the scholarship and tax credits
applicable to contributions to the scholarship;
relating to AlaskAdvantage education grant funding and
to Alaska performance scholarship funding;
establishing an account and fund for those purposes;
making conforming amendments; and providing for an
effective date."
9:04:22 AM
DIANE BARRANS, EXECUTIVE DIRECTOR, ALASKA COMISSION ON
POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION AND EARLY
DEVELOPMENT, gave a presentation titled "HB 104 APS
Outcomes Report."(copy on file)
HB 104 APS Outcomes Report:
This first report was produced based on data provided
by school districts through EED, by the University of
Alaska and by the National Student Clearinghouse.
Framing the report are several basic questions--most
of which can only be answered in subsequent years.
Those questions are: who is eligible and receives the
scholarship, what are they doing with it, how well are
they progressing through their programs, and are they
becoming contributing members of Alaska's workforce.
To provide context for the information in the report,
it is important to emphasize that we are at the
earliest stage in a process of engaging Alaskans on a
critically important topic; the topic is preparing to
succeed in postsecondary education and training and
the hard work that truly entails. The timing of the
scholarship's implementation was such that students
had little or no opportunity to factor eligibility for
APS into their educational objectives. Given that, I
found the data to include both encouraging and
sobering results because they reflect the pattern of
behavior that exists in our districts today.
Ms. Barrans discussed "Exhibit 1" of the report.
Exhibit 1 (pages 6/7) summarizes the Alaska
Performance Scholarship's (APS) eligibility and
recipient information based on their school district.
As is generally true throughout the report, these
numbers contain few surprises - with nearly 40% of the
state's high school graduates, the Anchorage SD has
the largest number of eligible graduates and the
largest number of recipients, with Fairbanks a fairly
distant second. At the other extreme, twelve of the
state's districts had fewer than 10 graduates and
three of those indicate they had no senior graduates.
Family Educational Right to Privacy Act (FERPA)
protocols warranted the suppression of data for cell
sizes below five so the cells containing asterisks
should not necessarily be read as zeros. Statewide,
29% of last year's graduates were eligible for the
APS, but there are differences across the districts.
Ketchikan, Copper River, Sitka, Denali, and Kodiak
Island districts each had eligibility rates above 35%,
while Petersburg, Unalaska, Skagway and Haines had
eligibility rates above 40%. Because this is
essentially a current situation analysis, were we to
analyze the local demographics we would likely find a
correlation between the eligibility rates and
communities which either have or lack a college going
tradition. This is reflected in locally-set graduation
requirements as well as the expectations and attitudes
of adult role-models. We consider this to be baseline
data against which to compare future years' outcomes
as a means of measuring the effects of APS in terms of
increasing educational opportunity and success in
every region of the state.
Ms. Barrans discussed the different regions referenced in
the APS report on Appendix E and noted that the regions
that were referenced in report hereafter approximated the
boundaries used by the Department of Labor and Workforce
Development for the state's economic regions. Appendix E
depicted the different regions of the state.
9:09:13 AM
Ms. Barrans spoke to "Exhibit 2" of the report.
Exhibit 2 (page 8) presents the data from the first
exhibit by regions of the state. This chart is one of
the more interesting ones in the report, allowing
cross region comparisons using percentages. In exhibit
2, we see that the Southcentral region had the highest
percentage of graduates who were academically eligible
to receive an APS award - 31.7%, and the Far North
region had the lowest - 11.4%. Still, school district
results within these regions differed. For example,
Nome in the Far North region had an eligibility rate 5
percentage points above the statewide average.
However, when we consider the percentage of those
students who were eligible who then went on to
actually use the scholarship, the Far North and
Interior regions are the clear leaders. Nearly one-
half of the eligible students in these two areas take
advantage of the APS.
Ms. Barrans explained "Exhibit 3" of the report.
The second topic area in the report was the
characteristics of APS eligible and recipient
students. As shown in Exhibit 3, (page 8) female
graduates are slightly more likely to be eligible to
receive the APS than are male graduates. However, any
gender differences disappear when we consider the
likelihood that an eligible student would make use of
the scholarship - just over 1/3 of both sexes, when
eligible, went on to use the scholarship. However,
when we reviewed the graduates' eligibility data by
their ethnicity, we saw wider differences in the
eligibility rates. On average, 28.8% of all graduates
were APS eligible, but nearly 38% of Caucasian
graduates were eligible, compared to 8.3% of Alaska
Native and American Indian graduates. Still, similar
to the analysis of APS usage by gender, once a student
becomes APS eligible, the usage rates are very similar
across the various ethnic groups, with about one in
three eligible students taking advantage of the
scholarship.
Ms. Barrans discussed "Exhibit 6" of the report.
Skipping to Exhibit 6, (page 10) where we analyze the
attendance patterns of high school graduates. This
exhibit uses data obtained from the National Student
Clearinghouse, a repository of data on students
attending postsecondary institutions throughout the
United States. Of the 8,064 public school graduates
in 2011, 30% attended in-state and 17% attended an
out-of-state postsecondary institution. However,
there's a notable difference in the attendance rates
for the APS eligible population versus the ineligible
population. 83% of APS eligible students pursued
postsecondary education somewhere, while only 33% of
the ineligible population did so. There were also
notable differences in the attendance patterns of the
APS eligible population based on their award level.
While there's a larger economic incentive for the
higher award level students to stay in state - since
the top award amount is twice that of the lowest award
amount -- APS eligible students at the top award level
are more likely to attend an out-of-state institution,
while those at the second and third award levels are
more likely to attend in-state. For those interested,
the National Student Clearinghouse identifies the
states in which these students were attending. Maybe
not surprisingly, Washington and Oregon were the two
states attracting the largest number of Alaska
graduates. A complete list of attendance by states is
in Appendix B, on page 25 of the report.
Ms. Barrans explained "Exhibit 9" of the report.
Continuing to the next topic area, where APS
recipients are pursuing their postsecondary education,
we skip to Exhibit 9 (page 12). Overwhelmingly, it was
at one of the University of AK system schools. This
table was created with recipients' data as of November
11th. Since then, numbers for the UA system schools
have increased slightly, to 505, 339, and 46 for UAA,
UAF and UAS. Since this is only the first year the
scholarships have been awarded, we don't have any
historical data to compare these results to. However,
I think there were some expectations that there would
be more postsecondary institutions represented in
Exhibit 9. Although it's not broken out in the table,
there were only 22 of these students who were using
the APS to pursue a certificate, while the majority
were pursuing a bachelor's degree.
9:14:32 AM
Ms. Barrans discussed "Exhibit 10" of the report.
This leads us to the next topic area of how much in
APS funds was awarded, and for what types of
enrollment? Exhibit 10 (page 13) graphically displays
what I just mentioned - the APS recipients were
predominantly enrolling in bachelor's degree programs.
Also, as displayed in Exhibit 11, they were
overwhelmingly enrolled on a full-time basis. When we
reviewed the data in Exhibit 6, we saw that the
students eligible for the highest level award were the
ones least likely to attend in-state and thus be
eligible to receive the award. This tendency affected
the amount of APS expenditures by award levels.
Ms. Barrans explained "Exhibit 14" of the report.
The next two topic areas, how does the APS affect
educational attainment and how it affects workforce
success, are areas that are much harder to judge at
this time. Workforce data for the class of AY11 is
nonexistent, since APS recipients have not had an
opportunity to pursue their postsecondary education in
order to attain more gainful employment. As for the
APS' effect on educational attainment, we have only
one semester of postsecondary education data available
to analyze, and that data's still preliminary and
subject to change. Exhibit 14 (page 15) does capture
some of the earliest available information - the
information on students' needs for preparatory classes
once they enter postsecondary education. Using
information from the University of Alaska, a total of
3,631 AY11 Alaska graduates attended UA in the fall
semester immediately following their graduation. Of
these, 880 were APS eligible. An analysis of the
course taking patterns of the APS eligible population
compared to the non-APS eligible population showed
some interesting differences. For example, ineligible
students were more than twice as likely to take a
preparatory class than were APS eligible students, at
64.8% versus 27.4%. In terms of average preparatory
hours taken, ineligible students took 2.9 hours
compared to 1 hour for the APS eligible students. In
addition, eligible students took more total hours as a
group, 2.3 hours more than ineligible students. These
numbers represent only the hours attempted in the fall
semester, and are subject to change. Still, if both
groups of students completed their semesters as
planned, the average APS eligible student would earn
12.6 credit hours applicable to a degree at the end of
their fall semester, while the average ineligible
student would have earned only 8.4.
Ms. Barrans addressed "Exhibit 17" of the report.
In the future, additional measures of the
scholarship's effects on educational attainment will
become available. Examples include the one and two
year retention rates for students pursuing a degree,
and degree completion rates. Exhibit 17 and 18 (pages
18 and 19) use UA data for the entering classes for
AY05 through AY07. It is not specifically APS data but
data that we anticipate changing for the better
because of the APS, and it provides a benchmark for
future analysis. In exhibit 17, we see that for those
students attending UA within one year of their high
school graduation, approximately 3 out of 10 students
do not show up for their second year, and roughly 4
out of 10 do not continue into their third year. This
does not mean that these students dropped out - many
may have attended UA to earn credit hours and
transferred to another school. However, if the APS
provides an incentive for students to stay and study
in Alaska, we can expect these percentages to go up in
future years.
Ms. Barrans explained "Exhibit 18" of the report.
Exhibit 18 (page 19) tracks these same populations of
students through AY11, analyzing the percentage of
students completing their programs and the average
years to completion. Degree completion rates are
generally calculated using 150% of the normal time to
degree, meaning allowing a student 6 years to complete
a 4 year degree. As seen in the table, the difference
in completion rates between the entering class of AY05
is significantly higher than the class of AY07, at
31.6% compared to 14%. While calculating comparable
information for APS recipients will take several
years, it's expected that these rates will rise if the
APS has its intended effects.
9:19:55 AM
Co-Chair Stedman requested a further explanation of levels
1, 2, and 3 on Exhibit 14. Ms. Barrans responded that
college levels 1, 2, and 3 related to GPA and test score
criteria. She explained that students in college level 1
met the highest standard for APS eligibility, based on high
SAT or ACT scores, as well as the highest GPA. She stated
that level 3 represented modest level test scores and a
high school GPA of 2.5 or better. She pointed out that the
curricular requirements for the scholarship program were
being phased in over time and that the requirements at the
current time, particularly in math and science, were
moderate. She indicated that the requirements would be more
rigorous in the future and that the Department of Education
and Early Development (DEED) expected to see the
preparatory course-taking pattern for APS eligible students
to improve over time.
Co-Chair Stedman asked for an explanation of the 23 percent
figure in the "total eligible" column. Ms. Barrans
responded that 23 percent of APS eligible students needed
some math remediation.
Co-Chair Stedman inquired if 8 percent of the top level
graduates, roughly 23 percent of the middle group, and 37
percent of the lowest scoring students all needed help with
math. He queried what level of math students were expected
to be at by the time they entered college. Ms. Barrans
responded that the requirement would be a credit-bearing
math course and deferred the question to the University of
Alaska. She stated that she was unsure what assessment
result required that a student take a preparatory math
class, but pointed out that studies showed that students
often needed a refresher math course before college. She
observed that when a student did not take math their senior
year of high school, they often needed a refresher course.
She opined that requiring four years of math would
eliminate the need for a refresher course.
9:25:29 AM
Senator Egan expressed concerns that students who qualified
for the APS were mostly from larger districts and pointed
out that the 28 smaller districts had a very low percentage
of qualifying students. He mentioned that the rate of
eligible students in Petersburg was 47 percent and was
"phenomenal." He wondered how the percentage of qualifying
students related to other factors, such as district size.
Ms. Barrans replied that rather than using generalities, it
was more useful to look at the particulars within school
districts. She stated that certain aspects within a
particular district needed to be taken into account, such
as the graduation requirements, whether or not
postsecondary education was a goal, and whether
postsecondary education was relevant for families within
the area. She offered that in a situation like Petersburg,
there was a college going culture that had developed, which
permeated the community. She opined that young people and
teenagers relied on parents and school leaders as mentors.
She indicated that it was unwise to generalize by district
size or location.
Senator Egan expressed interest in examining the successful
districts in order learn how to apply the successes to
other districts. He acknowledged that lifestyles were
different in "bush" communities, but stated that students
from those areas should have an opportunity and stressed
that he did not want to see those students forgotten. Ms.
Barrans voiced agreement and furthered that having data
"like this" available to policy makers and agencies would
enable the state to focus its resources in the areas where
there was the greatest ability to benefit. She added that
she did not presume that the goals of the program would be
fully embraced by every resident in the state.
9:29:14 AM
Senator Thomas commented on the usefulness of the report's
statistics. He observed that out of the total number of
students who were eligible for the APS, 30 percent needed a
remedial math or English course. He observed that the data
might be useful for school districts in examining
curriculum. He mentioned Exhibit 6 and queried how the
figures on the first line compared to the national average.
He clarified that it appeared that more than half of the
Alaskan graduates did not go on to college and wondered how
this compared to the national average. Ms. Barrans stated
that she believed the national average of students going to
college was 48 percent, but that it varied greatly from
state to state. She observed that some states had college
going rates that were north of 70 percent.
Senator Thomas asked if the number of students going on to
college in Alaska was about average when compared to the
national level. Ms. Barrans replied in the affirmative, but
that Alaska had poor completion rates and was at the bottom
in that category.
Senator Thomas mentioned that there had been uncertainty
regarding the longevity and funding of the APS the prior
year and that it had impacted student applicants, who may
have stayed in state otherwise. Ms. Barrans stated that the
commission had conducted an e-mail survey, which had
elicited over 300 responses. Students commented in the
survey that the uncertainty had impacted their decision.
She furthered that the funding for the APS was not settled
until April of the prior year, at which point many students
had already committed to attend a particular institution.
She offered that the timing of the funding approval
impacted the recipient use rate. She noted that there was a
six-year window for the APS and that it was anticipated
that some students would transfer back into the system.
9:33:28 AM
Co-Chair Stedman observed that there were asterisks in
Exhibit 1 and pointed to a footnote, which stated,
"Information cannot be disclosed without potentially
releasing personally identifiable information." He inquired
if an executive session was needed to look at the asterisks
and queried if they represented zeros. Ms. Barrans
responded that the asterisks were not all zeros and that if
you summed all the numbers on the chart, there were missing
figures. For instance, in the "APS recipient" totals, there
were 46 recipients that were spread across the asterisk
column. She stated that she could not advise the committee
on what protocols to use to "drill down" into those numbers
further because she was not an expert on the Family
Educational Rights and Privacy Act (FERPA).
Co-Chair Stedman stated that he wanted to be sure that
schools that had asterisks attached to them were not
forgotten.
Co-Chair Stedman discussed Mt. Edgecumbe High School in
Exhibit 1 and stated that it had only 13 eligible students
out of 74 graduates. He offered that an 18 percent
eligibility rate seemed low and queried if the system
precluded some students from being eligible for the APS
because of a high concentration of high-achieving students.
Ms. Barrans responded that there should not be a barrier
that would preclude students and that a student would be
eligible if they took the right course offerings, met the
grade requirements, and achieved the test scores.
Ms. Barrans stated that the first year of data did not tell
the commission which of the components of the program a
student had failed to satisfy. In the next year of
reporting, schools had been asked to provide the underlying
data, such as whether a student met the standards for
curriculum, GPA, and test scores. She offered that the
second year of data would enable an investigation of the
underlying causes for ineligibility. The data on where
students had gaps could be used as a feedback loop to state
agencies.
9:37:24 AM
Co-Chair Stedman observed that although the mount Mt.
Edgecumbe and Sitka high schools were essentially in the
same community, Sitka seemed to have a much higher rate of
eligible students. He pointed out that 38 percent of
Sitka's 98 students were eligible, while only 18 percent of
Mt. Edgecumbe's 74 students were eligible. He stated that
he suspected something was wrong with the numerics or the
system itself. He explained that the public had a desire to
attend Mt. Edgecumbe and that it had an extremely high
perceived level of high school education. He offered that
he would expect Mt. Edgecumbe to rank very high on a list
that ranked high schools by what colleges its graduates
attended. He reiterated that only 18 percent of Mt.
Edgecumbe's students had qualified for the APS and noted
that none of them received the scholarship. He requested
that Ms. Barrans look into the disparity of eligibility in
the different districts and make direct comparisons between
Mt. Edgecumbe, Sitka, and Petersburg. He concluded that the
quality of the education at Mt. Edgecumbe was not reflected
in the numbers. Ms. Barrans responded that analysis on
these topics was exactly what was needed. She added that
data would go back to the districts and that it would
generate a serious conversation. She mentioned that the
commission was also engaged in contracting the National
Student Clearinghouse to provide information to each
district in the state about where its students were going
to college and how many were doing so.
Co-Chair Stedman requested a comparative analysis of how
many students from Sitka, Petersburg, and Mt. Edgecumbe
went on to college. He suspected that Mt. Edgecumbe would
be at the top of the list, if the criteria were the
percentage of students who attended college. Ms. Barrans
replied that she was unsure if the requested data was
currently available at the district level, but that she
would be happy to include it if it was.
Co-Chair Stedman commented that phoning a district's
superintendent would probably be a good way to get the
information.
9:41:47 AM
Co-Chair Hoffman queried why there was such a large
variance among the different school districts regarding how
many students were eligible and how many received the
scholarship. He pointed out that in Valdez, over 50 percent
of the 13 eligible students received the scholarship, while
other districts that were eligible did not receive any
scholarships. Ms. Barrans indicated that in order to
receive the scholarship, a student would have to enroll in
a school in Alaska. A large percentage of students were
eligible for the scholarship, but had elected to enroll in
institutions outside of the state.
Co-Chair Hoffman asked if Ms. Barrans could back up her
assertion regarding low recipient numbers with data. Ms.
Barrans replied in the affirmative and that there was data
in the report that depicted the rate at which students went
to college outside of the state. She explained that 83
percent of the APS eligible students enrolled in school
"somewhere," while only 39 percent of those students
enrolled in Alaska.
Co-Chair Hoffman inquired how much effort was being made to
inform students about the availability of the program and
queried if the effort was being conducted in a fair manner
throughout the state. Ms. Barrans responded that some
schools had been more aggressive in pushing the information
that DEED and the commission had provided. In addition to
relying on schools to distribute information about the
program, the commission had used the PFD database to send
direct mailings into the homes of students. She shared that
once the information had gotten to a student, there was no
real way of assessing its impact. She stated that one of
the commission's challenges was to make the APS a "kitchen
table topic" in Alaskan homes. She related that the
commission had not sought funding for a marketing campaign
for the APS, but that it had been doing public service
announcements in addition to the mailings.
Co-Chair Hoffman queried if the success of the APS was left
up to the school districts more than it was to the state.
Ms. Barrans replied that she would not characterize it that
way.
Co-Chair Hoffman pointed out that the APS was a state
program and that it seemed like it was the state's
responsibility to contact students directly. He offered
that the program would potentially have a higher success
rate, particularly in the smaller school districts, if the
state took a more active role. Ms. Barrans responded that
the commission had outreach staff in Anchorage who visited
every school district every other year. The outreach staff
held seminars and sessions and the parents were invited to
attend. She shared that some communities had a very high
turnout for outreach events, while other communities had a
smaller response. She stated that the commission was using
multiple modes of outreach such as webinars and
teleconferences and furthered that the commission had
reallocated staff to serve in an outreach capacity.
9:46:55 AM
Co-Chair Stedman stated that some districts, such as
Hydaburg or Hoonah, had very few students and that he
understood the asterisks were necessary due to the small
headcount. He pointed out that there were 106 students in
the Bering Strait/Far North district and 78 students in the
Northwest Arctic/Far North district, and stated that the
number of students in those districts seemed too high to
justify asterisks on eligibility. He pointed out that Mt.
Edgecumbe High School, with 74 students, had four less
students than the Northwest Arctic district, but that it
did not have asterisks associated with it and was reported.
He requested an explanation of the discrepancy in the
disclosure between districts. Ms. Barrans responded that an
asterisk indicated a number of eligible students between
zero and four. Co-Chair Stedman inquired if the asterisks
should be based on how many students were in the district.
He stated, for instance, that if there were only four
eligible graduates from the Bering Straits out of 106
students, the committee should be privy to that
information. He observed that figuring out who five
students were out of 106 was considerably more difficult
than determining who one or two students were out of five,
as would be the case in an area like Hydaburg. Ms. Barrans
stated that the researcher who had drafted the report had
requested guidance from the FERPA main office, but that he
was not led in a direction that made him feel comfortable
including some of the smaller numbers. She added that the
suppression did not make much sense to her either.
Co-Chair Stedman continued that given that the Bering
Strait/Far North district had 106 students, he didn't
understand how the report justified not disclosing it,
unless it did not disclose any school systems with 106
students or less. He added that Petersburg had 53 students
and that it was disclosed. He stated that the asterisks
represented data that the committee needed to know. Ms.
Barrans voiced her agreement and stated that she was
unclear as to why the FERPA protocols required suppression
in the mentioned cases. She indicated that she would
attempt to find an explanation that clarified the issue for
the committee.
Co-Chair Stedman inquired if the asterisks represented a
number from zero to five. Ms. Barrans responded that the
asterisks represented a number between zero and four.
Co-Chair Stedman stated that if an asterisk could mean a
zero, then in a district the like Bering Strait/Far North,
it was just as likely that none of the 106 students
qualified as it was that four did. He stated that he found
this prospect "alarming."
Co-Chair Stedman expressed that the committee would like
all the districts to benefit from the APS. He requested
that Ms. Barrans look into the particulars of the
undisclosed districts and get back to the committee, as
well as obtain a written response from "whoever is trying
to control that information."
9:51:23 AM
Senator Egan observed that the report's information
regarding some of the districts was not very concise. He
noted that there were 28 districts that had fewer than five
eligible graduates and that out of those districts, there
were 542 graduates, only 29 of which were eligible for the
APS. He concluded that the number of eligible students in
these districts only represented about 5 percent of the
total and that only 11 students actually received the
scholarship in those 28 districts.
Senator Egan inquired if there was a breakdown of needs-
based versus merit-based regarding where grant funding had
gone and the number of students that applied for the
scholarship. Ms. Barrans replied that she would come back
to the committee with a response.
Co-Chair Stedman inquired if asterisks that represented a
zero could be disclosed to the committee. Ms. Barrans
replied that she would look into the matter.
Co-Chair Stedman reiterated that the committee would like
something in writing from whoever was controlling the
information. Ms. Barrans responded in the affirmative.
9:53:39 AM
AT EASE
9:54:02 AM
RECONVENED
9:54:06 AM
Senator Ellis MOVED to ADOPT the proposed committee
substitute for HB 104(RLS), Work Draft 27-GH1893/R (Mischel
2/10/12) as a working document.
Co-Chair Stedman OBJECTED for purpose of discussion.
DARWIN PETERSON, STAFF, SENATOR BERT STEDMAN, spoke to the
changes in the work draft, version R. He stated that the
committee substitute amended subsection 3, on page 3, line
8. He explained that in the previous version, eligibility
for a performance scholarship was based on a student's
completion of a core academic curriculum "in high school,"
but that the change allowed a student to complete a core
academic curriculum of "high school level course work." He
related that the reasoning behind the change was to make
advanced high school courses that were taken in the 8th
grade apply towards the scholarship. He shared that in
subsection 8, there was also exemption to the core academic
curriculum; it provided a waiver of any portion of the core
academic curriculum that was not made available in the
student's school district. Subsection D, on page 4, was
also included in the bill in order to allow a mechanism for
students who obtained a General Education Development
Diploma (GED). He stated that on page 4, Section 6,
language was added whereby a student who scored in the 90th
percentile on the GED would be eligible for the highest
scholarship award. He continued that scores in the 80th
percentile would result in a second tier award and the 70th
percentile score would result in the third tier award. On
page 5, line 7, the words "or national" were inserted so
that qualified institutions in the state could be
accredited by either a regional or national accreditation
association. At the bottom of page 5, Section 10, two
subaccounts, the AlaskAdvantage Education Grant Account and
the Alaska Performance Scholarship Award Account, were
created. He explained that money would be deposited into
the two accounts from the Alaska Higher Education
Investment Fund. He stated that the Alaska Higher Education
Investment Fund was a new fund where the $400 million,
which had been appropriated the prior year and was being
housed at the Alaska Housing Finance Corporation, would be
deposited. He noted that depositing the $400 million into
the fund would require another appropriation because the
original appropriation had been for scholarships only and
with the addition of grants, further action was required.
Section C, line 10 and Section D, line 21 were both new.
Section C, on page 6, represented the one-third/two-thirds
split concept, whereby one-third of the amount available
each year from the Alaska Higher Education Investment Fund
would be made available for the AlaskAdvantage Grants and
two-thirds would go towards the APS; the section also
stated that if there was an insufficient number of eligible
applicants for the APS pool of funds, the remaining balance
would be allocated to the AlaskAdvantage Grant account.
Section D created a mechanism for reserving a proportional
amount of funds for students in a school district with an
average daily membership of less than 800; this amount
would be calculated by taking the statewide percentage of
students in a school district with 800 students or less. He
offered a hypothetical example that if 25 percent of
Alaska's students were in districts with 800 or less
students, then 25 percent of the funds available from the
Alaska Higher Education Investment Fund would be set aside
for those students; subsection E specified that if an
insufficient number of the proportionally funded students
were eligible, the remaining funds would be re-deposited
into the Alaska Higher Education Investment fund. Section
12, on page 7 created the Alaska Higher Education
Investment Fund; subsection C established the payout method
from the fund into the two sub-accounts. Annually, ten
percent of the amount available in the higher education
fund would be made available for appropriation into the
sub-accounts; one-third of that amount would go into the
grant account and two-thirds into the APS account.
Mr. Peterson stated that the legislation's one-third/two-
thirds payout method needed to be revisited and related
that the split language was added because the previous
version of the bill had established a payout method at one-
third the total value of the fund or $40 million, whichever
was less. He mentioned that $40 million was ten percent of
the $400 million that had been appropriated the prior year.
He pointed out that $40 million was a higher payout than
the fund's rate of return would be and reiterated that the
payout method needed to be changed. Sections 13 through 24
added the Alaska Higher Education Investment Fund as an
eligible recipient for all statutory tax credits that were
allowed for contributions to education. Sections 29 and 30,
on page 16, had new effective dates. Section 29 established
a delayed effective date of July 1, 2013 for Section 8 of
the bill. He explained that Section 8 described the
conditions that a postsecondary institute must meet in
order to receive scholarship funds; requirements included
an advisory program for incoming students and offering
courses that would result in the issuance of a degree in a
timely manner. Section 30 established an effective date of
January 1, 2021 that applied to all the second referenced
tax credit provisions in Sections 13 through 24; this
effective date was a result of prior legislation and would
allow contributions to the fund to continue in perpetuity.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
FURTHER OBJECTION, the proposed committee substitute for HB
104(RLS), Work Draft 27-GH1893/R (Mischel, 2/10/12) was
Adopted.
Co-Chair Stedman discussed the fiscal notes in the members'
packets and related that the notes would be updated to
reflect the changes in the new committee substitute.
10:01:57 AM
Co-Chair Stedman asked if Ms. Barrans had any feedback
regarding areas of the bill that needed further
consideration. Ms. Barrans stated that Commissioner Hanley
was present to address DEED's concerns, which primarily
dealt with K-12. She warned that there were concerns with
the bill's proposed changes on page 3, Section 5; this
section had a provision which essentially created a
"loophole" for districts to not have to make available the
curriculum that students would otherwise need to take in
order to qualify for the APS. She mentioned that the
remediation rates of Alaskan scholars were very high and
that there were concerns regarding a loophole in that
regard. She pointed out that the State Board of Education
had created a "safety net" for students who, through no
fault of their own, were unable to take the necessary
curriculum; the safety net allowed a student to take the
necessary classes the year after they graduated and still
be eligible for the scholarship during the current year.
She offered that the safety net would sunset in the current
regulations in 2012.
MICHAEL HANLEY, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, addressed the department's concerns
regarding Section 5, page 3 of the bill and indicated that
particularly in small schools, some programs may not be
able to offer the curriculum required to access the
scholarship. He stated that the safety net was added to
address concerns regarding course availability and that its
current sunset was in 2012. He added that the sunset date
could be extended if the legislature thought it was
important to do so. He noted that the department had found
it more appropriate to continue to encourage districts to
offer the curriculum that students would require rather
than providing a loophole, which removed the incentive to
offer the proper curriculum. He concluded that the
department felt there was a safety net in place currently.
Ms. Barrans explained that Section 6 of the bill inserted a
GED alternative that was concerning to the department and
related that one of the fundamental objectives of the APS
program was to incentivize students to make good decisions
early in life. She warned that creating a GED option would
allow students to avoid the rigorous curricular
requirements of the APS. She pointed out that the
department was aware of the legitimate concerns of students
who chose not to complete high school; however, there was
already an avenue for GEDs, as they were accepted through
the Education Grant Program. She mentioned that Wyoming had
incorporated a GED alternative in its program and that it
had shown that not only do very few students qualify under
the GED route, but that the few who did qualify failed at
very high rates. She stated that during the prior year in
Wyoming, fewer than 30 students had qualified for the
scholarship through the GED pathway and that by the end of
the first year, 21 of those students were no longer
eligible to receive financial aid. She related that by
adding the GED as viable pathway in statute, the state was
essentially telling young people that the GED was an ok
alternative. She offered that a GED clearly put a student
at a disadvantage when he or she moved forward with their
student career. She concluded that the GED was a viable
pathway, but that it should not be incorporated into a
performance scholarship structure.
10:07:17 AM
Ms. Barrans discussed page 5, Section 10 of the bill. She
stated that the department was supportive of the separate
sub-accounts, but that there was an issue regarding the
structure of the one-third/two-thirds split. She pointed
out that what had been discussed the prior year was that
the grant program would be funded at one-third the level of
the scholarship program, but that the legislation had set
the funding at a one-third/two-thirds split of the account
value. In order to fully fund the APS program,
substantially more money was being spent and would be
needed. She furthered that the scholarship program would
require general fund support and that the Higher Education
Investment Fund was not large enough to sustain both
programs, given the current proportion of the funding
split.
Co-Chair Hoffman inquired how much additional funding,
beyond the $400 million, would be required to make the
Alaska Higher Education Investment Fund sustainable under
the current terms of the bill. Ms. Barrans responded that
she had not performed any calculations and deferred the
question to the Department of Revenue.
Co-Chair Hoffman queried if providing additional funds
would alleviate the concerns regarding the split of
funding. Ms. Barrans replied that she was unable to speak
for the administration regarding its support of increasing
capital to the fund.
Co-Chair Stedman indicated that the committee would work on
the allocation issue. He mentioned that the fund's maximum
payout was at 10 percent and that it was way too high. He
stated that if appropriations to the fund were inadequate,
the general fund would need to cover the difference.
Ms. Barrans stated that the bill also had a provision for a
reserve of funds and related that the department wanted to
fund the programs at a level that would make a reserve of
funds unnecessary. She shared that there were some
technical issues regarding "essentially having to create a
program within a program that would prioritize funding for
students from particular districts. We would need to be
able to track those students. As you know, they have six
years within which to use this." She mentioned that the new
committee substitute's proposed preferential treatment for
some students added a complication that the current program
structure did not contemplate. She stated that it was even
more complicated for the grant program.["It" was made in
reference to the preferential treatment of fund dispersal.]
She stated that the department did not track the high
school that students came from for the grant program. The
average age of grant recipients was in the late-20s. She
related that she was unsure what bearing a student's high
school would have on eligibility, given that the grant
program was needs-based. She shared that preferential
treatment for particular school districts was not something
that was built into the grant structure. She stated that
the grant program had applicants every year and that the
department ranked the students from the greatest need to
the least need; money was then allocated until it was
exhausted. She offered that how the department would treat
a student who was towards the bottom of the list if the
student had earlier graduated from a high school in one the
qualifying districts was problematic. She concluded that
whether a student from a qualifying district would have
preferential treatment over a student with the greatest
need represented a complication that would need to be
resolved.
Co-Chair Stedman stated that the computer programmers could
probably track the students if the state so desired. Ms.
Barrans responded that with enough time and money, it could
be done.
Co-Chair Stedman asked if the Department of Education and
Early Development had any other concerns regarding the new
committee substitute. Commissioner Hanley reiterated that
on page 3, he would like the words "courses taken in high
school" to be changed to "high school courses." He shared
that he had a significant amount of discussion with
different districts, many of which offered middle school
students that were ready the option to pursue high school
level courses and move forward. He offered that many of the
districts, particularly smaller ones, were supportive of
the language change. He pointed out that it was important
to consider the possible downside with offering courses too
early. He mentioned that typically, a student's level of
success at the university level could be how much math a
student had taken in the last two years and not how much he
or she had taken total; a downside could be if students
took all their math early on, they may need a refresher
course before they entered college. He concluded that the
positive side of the language change would be that it would
incentivize kids to push themselves earlier on and take the
necessary courses.
Co-Chair Stedman requested that Ms. Barrans ask whoever was
suppressing the asterisked information if it was possible
to lump the smaller schools together in the report ",so
there might be six or seven, or some number of schools
combined together" in order to get a feel for the group in
general. He stated that he would like to examine the small
schools in aggregate because he had difficulty with being
unable to have access to information that was needed for
the committee to fulfill its obligation. Ms. Barrans voiced
her agreement. She responded that she could look at
different ways of aggregating the districts and would be
able to answer the question for the committee.
10:14:48 AM
SCSCS HB 104(FIN) was HEARD and HELD in committee for
further consideration.