04/01/2010 09:00 AM Senate FINANCE

SENATE BILL NO. 224                                                                                                           
                                                                                                                                
     "An   Act  establishing   the  governor's   performance                                                                    
     scholarship  program  and   relating  to  the  program;                                                                    
     establishing  the  governor's  performance  scholarship                                                                    
     fund  and relating  to the  fund;  relating to  student                                                                    
     records;  making conforming  amendments; and  providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
10:10:44 AM                                                                                                                   
                                                                                                                                
LARRY  LEDOUX  COMMISSIONER,  DEPARTMENT  OF  EDUCATION  AND                                                                    
EARLY  DEVELOPMENT opined  that  the bill  emerged from  the                                                                    
Senate  Education  Committee  a stronger  and  more  focused                                                                    
piece   of  legislation.   He  explained   that  the   Merit                                                                    
Scholarship  was a  contract inviting  students to  choose a                                                                    
rigorous  curriculum  and  to  validate  good  grades  by  a                                                                    
standardized  assessment. He  believed that  the legislation                                                                    
was transformative  and would change the  mindset of Alaskan                                                                    
students.  Alaska must  create  a culture  of success.  Many                                                                    
students  dream of  attending college  or technical  school.                                                                    
The  Alaska commission  on post  secondary education  quoted                                                                    
statistics  that in  ten years  among 50  of today's  Alaska                                                                    
ninth graders,  three will  have a  college degree,  19 will                                                                    
not  graduate  from  high  school,  eleven  will  have  some                                                                    
college and  17 will  only have a  high school  diploma. The                                                                    
goals of  the Merit Scholarship  are to improve  high school                                                                    
graduation rates  and to  improve the  rigor of  high school                                                                    
courses. He explained that he  wants to create a college and                                                                    
post secondary culture in Alaska.                                                                                               
                                                                                                                                
Mr.  LeDoux  described  the  specifics  of  the  scholarship                                                                    
program. He noted  that the program is open  to graduates of                                                                    
Alaska  high schools  whether they  are home  school, public                                                                    
school, or  private school students. The  scholarship can be                                                                    
used at  any Alaska  post secondary  private or  public tech                                                                    
school or  college and is  not restricted to  the University                                                                    
of   Alaska.  He   mentioned   three   levels  of   academic                                                                    
scholarships.  The   academic  scholarships   provide  eight                                                                    
semesters of  funding over a  six year period. The  six year                                                                    
time period  is important because many  of Alaska's students                                                                    
are nontraditional. The criteria  to achieve the scholarship                                                                    
are  based  on  a   student's  grades,  an  assessment  that                                                                    
validates  the   grades  and  a  rigorous   curriculum  that                                                                    
predicts  students'  success in  college.  If  a student  is                                                                    
unable  to   complete  the  curriculum  due   to  geographic                                                                    
location   or   availability,   they  can   apply   to   the                                                                    
commissioner's  office  that  will  devise  and  develop  an                                                                    
individualized alternative  program for the student  to meet                                                                    
the same  standard. The other criterion  for the alternative                                                                    
pathway is  a situation beyond  the control of  the student.                                                                    
The  criteria is  an  A  average for  the  highest level  of                                                                    
academic  scholarship,  a  B average  for  middle  level  of                                                                    
academic scholarship, and  a C+ average for  the lower level                                                                    
of academic scholarship.                                                                                                        
                                                                                                                                
10:18:17 AM                                                                                                                   
                                                                                                                                
Mr.   LeDoux  highlighted   the   assessment  criteria.   He                                                                    
explained the importance of the  grades achieved by students                                                                    
in rigorous  courses. Another criterion is  validated by the                                                                    
standardized assessment  test. It is  not the intent  of the                                                                    
program to  create a rigorous  assessment test  for students                                                                    
to  qualify.  The  rigorous  curriculum  demanded  from  the                                                                    
Senate Education  Committee was four years  of English, four                                                                    
years  of math,  four years  of science,  and four  years of                                                                    
social studies,  of which one  year can be an  Alaska native                                                                    
language, a  foreign language, or  an arts  program. Another                                                                    
option includes four  years of language arts,  four years of                                                                    
social  studies,  three years  of  science,  three years  of                                                                    
math, and two years of foreign language.                                                                                        
                                                                                                                                
Mr. LeDoux  informed that  the highest  academic scholarship                                                                    
is 100 percent  tuition at the University of  Alaska for the                                                                    
2010-2011 school  year for 15 credits.  The gold scholarship                                                                    
is 75 percent tuition at  the University of Alaska for eight                                                                    
semesters. The silver academic is  50 percent of the tuition                                                                    
using  the University  of Alaska  over eight  semesters. The                                                                    
current technical scholarship awards $3000  a year for a two                                                                    
year  period.  Both  the  House  and  the  Senate  Education                                                                    
committee added  a needs-based component to  the scholarship                                                                    
following the achievement of  the academic program. Students                                                                    
apply through  the Free Application for  Federal Student Aid                                                                    
(FAFSA) based on their criterion  which would be determined.                                                                    
The minimum expected cost for any student would be $2000.                                                                       
                                                                                                                                
Mr. LeDoux stated that the  cost of implementing the program                                                                    
is approximately  $417 thousand. The legislature  could fund                                                                    
the  operating   cost  this  year  which   would  allow  the                                                                    
Department   of  Labor   and   Workforce  Development,   the                                                                    
commission of  post secondary education, and  the Department                                                                    
of  Education   and  Early  Development  to   institute  the                                                                    
regulations necessary for funding in 2010.                                                                                      
                                                                                                                                
10:24:02 AM                                                                                                                   
                                                                                                                                
MARK  HAMILTON, PRESIDENT,  UNIVERSITY OF  ALAKSA, testified                                                                    
in support  of the  legislation. He  explained the  needs of                                                                    
preparation  and access.  The instrument  of addressing  the                                                                    
needs is  the responsibility  of the legislature.  He stated                                                                    
that  scholarships  work.  Most  scholarships  address  high                                                                    
school  students  moving  directly to  college.  Alaska  has                                                                    
nontraditional students who are  not eligible for the Alaska                                                                    
Scholars. These nontraditional  students comprise 50 percent                                                                    
of University  of Alaska students.  He recommended  that the                                                                    
legislature  seek  a  needs-based  requirement  that  exists                                                                    
outside of the traditional high school student.                                                                                 
                                                                                                                                
10:26:31 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman   commented  that  the   Alaska  Scholar's                                                                    
Program has been  as successful with an increase  from 42 to                                                                    
60  percent. He  recalled a  request from  the President  to                                                                    
expand the  Alaska Scholars Program. Mr.  Hamilton advocated                                                                    
for an  expansion of the  Alaska Scholar's Program by  15 or                                                                    
20 percent.  He noted  that the  program has  an inexpensive                                                                    
method of administration.                                                                                                       
                                                                                                                                
10:28:49 AM                                                                                                                   
                                                                                                                                
Senator   Thomas  asked   about  the   existing  scholarship                                                                    
programs. Ms.  Barrans responded  that the  Alaska Advantage                                                                    
Education Grant is the only  other non-loan aid program. The                                                                    
Alaska  Advantage Education  Grant  is  a needs-based  grant                                                                    
that  has  been funded  with  a  blend of  federal  dollars,                                                                    
student loan corporation interest  income on an unencumbered                                                                    
account,  and  with  a general  fund  appropriation  in  the                                                                    
capital budget in  2009. She noted that the  funding for the                                                                    
program  is modest  and lacks  the components  cited in  the                                                                    
proposal today regarding academic  criterion. The grant is a                                                                    
$2000 per year maximum grant.                                                                                                   
                                                                                                                                
Senator Thomas requested information  on the concept of loan                                                                    
forgiveness versus  scholarship. Ms. Barrans  responded that                                                                    
from the late 1960s through  1986, the state funded its loan                                                                    
program  with general  funds. The  loan forgiveness  program                                                                    
allowed   for  entitlements   for   up   to  fifty   percent                                                                    
forgiveness. She  observed that the aggregate  impact of the                                                                    
program  was  unsuccessful  as  only  one  in  five  of  the                                                                    
borrowers  returned to  the state.  The  overall impact  was                                                                    
that  the state  continues  to collect  from  some of  those                                                                    
borrowers today  and default rates approach  28 percent. The                                                                    
cost  of  the  investment was  substantial  with  relatively                                                                    
indifferent returns.                                                                                                            
                                                                                                                                
10:33:26 AM                                                                                                                   
                                                                                                                                
Senator Thomas noted that the  proposed program is broad and                                                                    
would cost less than the previous one. Ms. Barrans agreed.                                                                      
                                                                                                                                
Senator Ellis  asked about the Alaska  Advantage Program and                                                                    
targeted  nature of  the program  toward workforce  needs of                                                                    
the state. Ms. Barrans answered  that the statute allows the                                                                    
commission to  create priorities in high  achieving students                                                                    
and to provide  larger grants to those  students enrolled in                                                                    
career  programs leading  to workforce  shortage areas.  The                                                                    
three  areas  of study  that  qualify  are process  industry                                                                    
extraction, education, and health  and public safety related                                                                    
careers.                                                                                                                        
                                                                                                                                
Senator Ellis  commented that  the Alaska  Advantage Program                                                                    
has   promise   in   targeting   students   with   workforce                                                                    
development needs,  high achieving  students, and  those who                                                                    
simply need the help.                                                                                                           
                                                                                                                                
Co-Chair Stedman mentioned one fiscal  note from DOL for $25                                                                    
thousand  in general  funds to  contract  services to  adopt                                                                    
regulations, one fiscal  note from DOR for  $115 thousand in                                                                    
interagency  receipts  to cover  the  cost  of managing  the                                                                    
endowment fund, and  one fiscal note from  DEED for $376.300                                                                    
in  general  funds   to  cover  the  cost   of  the  program                                                                    
implementation.  The  fiscal  note   reflects  the  cost  of                                                                    
funding the scholarship in the amount of $25,341 in general                                                                     
funds which increases in the out years.                                                                                         
                                                                                                                                
SB 224 was HEARD and HELD in Committee for further                                                                              
consideration.