04/10/2009 08:00 AM Senate EDUCATION

          SJR  2-FED. HIGHER EDUCATION FUNDING/PROGRAM                                                                      
                                                                                                                                
8:05:50 AM                                                                                                                    
VICE CHAIR DAVIS announced consideration of SJR 2.                                                                              
                                                                                                                                
DON  BURRELL, staff  to  Senator  Davis, said  that  SJR 2  urges                                                               
Congress to appropriate adequate  funding for higher education to                                                               
all U.S.  citizens. This  resolution allows  Alaskans in  need of                                                               
assistance to  receive a higher  education without  the burdening                                                               
dilemma of  cover all educational  expenses. President  Obama has                                                               
set higher education  as a major priority for our  nation, and in                                                               
order for  us to remain  a leading nation, higher  education must                                                               
become more accessible.                                                                                                         
                                                                                                                                
Over the past 20 years,  higher education enrollment has risen by                                                               
20 percent.  During this  same period  state subsidies  of higher                                                               
education  has  continued to  decline.  This  has caused  student                                                               
tuition and fees  to rise by 316 percent  while overall inflation                                                               
only   rose   about   83  percent.   This   increased   financial                                                               
responsibility on  many students  and their  families dis-incents                                                               
higher education  for many minorities,  low income  families, and                                                               
individuals trying to  excel in their career  of choice. Alaskans                                                               
can obtain  a higher education,  but the federal  government must                                                               
do  more  to  make  higher   education  more  accessible  to  our                                                               
citizens.                                                                                                                       
                                                                                                                                
SJR  2 recognizes  the financial  and  foundational changes  that                                                               
must be  made, and asks  for the  establishment of a  new program                                                               
appropriating  $70 billon  to rebuild  student  access to  higher                                                               
education.  This is  less  than  10 percent  of  the total  funds                                                               
allocated  by  American  Recovery  and Reinvestment  Act.  SJR  2                                                               
includes  college grants  for military  veterans, allows  student                                                               
loan forgiveness and increases the  funding available through the                                                               
existing Pell Grant Program. It  urges the President and Congress                                                               
to close the educational achievement gap in our country.                                                                        
                                                                                                                                
8:08:42 AM                                                                                                                    
SENATOR STEVENS said he is very  much in support of this bill. It                                                               
is  essential   that  students  with  financial   needs  have  an                                                               
opportunity to go to college, but  he questioned the logic in the                                                               
second paragraph.  He didn't understand how  increased enrollment                                                               
and decreasing state subsidies had  caused tuition and fees to go                                                               
up  316  percent.  A  big  issue  is  the  cost  of  running  the                                                               
university  -  administration,  faculty and  facilities.  Why  is                                                               
education becoming so expensive in  the country? He remarked that                                                               
Alaska is doing pretty  badly; the NCSL gave it a  rating of F in                                                               
assisting students with needs.                                                                                                  
                                                                                                                                
SENATOR OLSON said he is also very concerned about the trend.                                                                   
                                                                                                                                
8:11:33 AM                                                                                                                    
SAICHI OBAI,  Associate Vice  President for  Students, University                                                               
of Alaska, said  the university supports this  resolution and all                                                               
of  the  efforts  the  legislature  has made  on  behalf  of  the                                                               
university and its students.                                                                                                    
                                                                                                                                
MR. OBAI said that Senator Stevens  has a very valid point; there                                                               
are a number  of factors that have gone into  the increased costs                                                               
of  higher  education   -  capitalism  is  one.   Costs  for  all                                                               
universities  have  increased,  but  his central  point  was  the                                                               
reason  for  higher costs  cannot  be  attributed solely  to  the                                                               
reduction of state subsidies.                                                                                                   
                                                                                                                                
VICE CHAIR  DAVIS asked if  he could  help with language  on that                                                               
issue to put in the resolution.                                                                                                 
                                                                                                                                
MR. OBAI replied that he would be happy to.                                                                                     
                                                                                                                                
8:14:01 AM                                                                                                                    
SENATOR  OLSON  asked how  the  $70  billion  would be  spent  to                                                               
establish  a new  program  that would  rebuild  access to  higher                                                               
education.                                                                                                                      
                                                                                                                                
VICE  CHAIR DAVIS  replied that  it  is for  universities at  the                                                               
federal level.                                                                                                                  
                                                                                                                                
SENATOR STEVENS  asked what the  University is doing in  terms of                                                               
containing  costs and  if the  University's investments  had lost                                                               
anything because of the fiscal crisis in the country.                                                                           
                                                                                                                                
MR.  OBAI answered  that said  the  CFO for  the University,  Joe                                                               
Trubach,  has  been clear  in  communicating  to staff  that  the                                                               
investment  losses  at  the  university are  severe  due  to  the                                                               
economy. He  could not give  a specific dollar amount,  but knows                                                               
it  is  in the  millions.  Before  the  fall  of last  year,  the                                                               
President  asked system  administration to  take steps  to reduce                                                               
their costs  by 17  percent. This included  a minimum  10 percent                                                               
reduction in travel  for this fiscal year, and  they have reduced                                                               
administrative staff by  18 positions and will  reduce it further                                                               
by 2 more -  with a goal of 20 people for  this fiscal year. They                                                               
have implemented a hiring freeze  to slow the process down, which                                                               
also  increases  their  ability   to  save  salaries.  The  other                                                               
campuses have also been engaged in cost cutting measures.                                                                       
                                                                                                                                
SENATOR  OLSON  asked what  the  private  institutions are  doing                                                               
about this.                                                                                                                     
                                                                                                                                
8:17:33 AM                                                                                                                    
MR. BURRELL  replied that based  on this resolution,  these funds                                                               
from the federal government would  be going to all programs based                                                               
on financial  need as long  as it addresses  financial assistance                                                               
for returning  veterans and financial needs  students; they could                                                               
be used  to increase the  Pell grants,  too. The purpose  of this                                                               
resolution is to request those funds and to rebuild the system.                                                                 
                                                                                                                                
SENATOR  OLSON  asked if  the  funds  would  also go  to  private                                                               
institutions.                                                                                                                   
                                                                                                                                
VICE CHAIR DAVIS said  she is not sure if this  money would go to                                                               
private institutions.                                                                                                           
                                                                                                                                
MR.  OBAI said  typically private  universities and  colleges are                                                               
eligible for funding  as long as they meet the  criteria set down                                                               
by the federal government.                                                                                                      
                                                                                                                                
8:20:05 AM                                                                                                                    
SENATOR  STEVENS asked  Mr. Obai  if  there is  still a  National                                                               
Defense Student Loan Program. Is this similar to that?                                                                          
                                                                                                                                
MR.  OBAI  replied that  he  didn't  think the  National  Defense                                                               
Student Loan  Program was still  in existence. There is  a direct                                                               
student program that is still  available, but the University does                                                               
not participate  in direct  student lending;  it works  through a                                                               
network of lenders.                                                                                                             
                                                                                                                                
SENATOR  STEVENS asked  if Pell  grants are  just for  those with                                                               
financial need.                                                                                                                 
                                                                                                                                
MR. OBAI  replied that they are  only for those with  the highest                                                               
financial need as determined on  the application for student aide                                                               
(FAFSA).                                                                                                                        
                                                                                                                                
VICE  CHAIR DAVIS  found no  further comments  and closed  public                                                               
testimony.                                                                                                                      
                                                                                                                                
SENATOR STEVENS moved to report SJR 2 from committee with                                                                       
individual recommendations and attached fiscal note(s). There                                                                   
being no objection, the motion carried.