Legislature(2009 - 2010)Anch LIO Room 220

11/24/2009 01:00 PM House EDUCATION


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01:04:58 PM Start
01:05:38 PM Report by Larry Ledoux, Commissioner of the Department of Education and Early Development on Governor's Performance Scholarship Proposal
04:21:48 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Teleconference --
--Joint with Senate Education Committee--
-Report: Commissioner of Dept. Education
and Early Development on Governor's
Performance Scholarship proposal
-Report: Western Interstate Commission
for Higher Education (WICHE) on hybrid
merit/need based scholarship programs
in other states, particularly Oregon
and Minnesota
-- Testimony <Invitation Only> --
                                                                                                                              
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
               HOUSE EDUCATION STANDING COMMITTEE                                                                             
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                       November 24, 2009                                                                                        
                           1:04 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
SENATE EDUCATION STANDING COMMITTEE                                                                                             
                                                                                                                                
 Senator Kevin Meyer, Co-Chair                                                                                                  
 Senator Joe Thomas, Co-Chair                                                                                                   
 Senator Charlie Huggins                                                                                                        
 Senator Donald Olson                                                                                                           
                                                                                                                                
HOUSE EDUCATION STANDING COMMITTEE                                                                                              
                                                                                                                                
 Representative Paul Seaton, Chair                                                                                              
 Representative Cathy Engstrom Munoz, Vice Chair                                                                                
 Representative Wes Keller                                                                                                      
 Representative Peggy Wilson (via teleconference)                                                                               
 Representative Robert L. "Bob" Buch                                                                                            
 Representative Berta Gardner                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
SENATE EDUCATION STANDING COMMITTEE                                                                                             
                                                                                                                                
 Senator Bettye Davis, Vice Chair                                                                                               
 Senator Gary Stevens                                                                                                           
                                                                                                                                
HOUSE EDUCATION STANDING COMMITTEE                                                                                              
                                                                                                                                
 Representative Bryce Edgmon                                                                                                    
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Senator Fred Dyson                                                                                                              
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
Report by Larry LeDoux, Commissioner of the Department of                                                                       
Education and Early Development on Governor's Performance                                                                       
Scholarship proposal                                                                                                            
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LARRY LeDOUX, Commissioner                                                                                                      
Alaska Department of Education and Early Development                                                                            
POSITION   STATEMENT:   Explained  the   Governor's   Performance                                                             
Scholarship (GPS) proposal.                                                                                                     
                                                                                                                                
EDDY JEANS, Director                                                                                                            
School Finance                                                                                                                  
Alaska Department of Education and Early Development                                                                            
POSITION  STATEMENT:  Commented  on  the  Governor's  Performance                                                             
Scholarship proposal.                                                                                                           
                                                                                                                                
DIANE BARRANS, Executive Director                                                                                               
Alaska Commission on Post Secondary Education                                                                                   
Alaska Department of Education and Early Development                                                                            
POSITION STATEMENT: Commented on college financial aid issues.                                                                
                                                                                                                                
SAICHI OBA, Assistant Vice President                                                                                            
Student Services and Enrollment Management                                                                                      
University of Alaska (UAA)                                                                                                      
POSITION STATEMENT: Commented on college financial aid issues.                                                                
                                                                                                                                
JOHN BOUCHER, Senior Economist                                                                                                  
Office of the Governor                                                                                                          
POSITION  STATEMENT:  Commented  on  the  Governor's  Performance                                                             
Scholarship.                                                                                                                    
                                                                                                                                
DAVE LONGANECKER, President                                                                                                     
Western Interstate Commission on Higher Education (WICHE)                                                                       
POSITION STATEMENT: Commented on college financial aid issues.                                                              
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:04:58 PM                                                                                                                    
CO-CHAIR JOE  THOMAS called the  joint meeting of the  Senate and                                                             
House  Education  Standing  Committees  to  order  at  1:04  p.m.                                                               
Senators  Olson, Meyer,  and Thomas,  and Representatives  Munoz,                                                               
Keller, Buch,  Gardner, and  Seaton were present  at the  call to                                                               
order. Representative  Wilson was present via  teleconference and                                                               
Senator Huggins arrived as the meeting was in progress.                                                                         
                                                                                                                                
^Report  by  Larry  LeDoux, Commissioner  of  the  Department  of                                                             
Education  and   Early  Development  on   Governor's  Performance                                                             
Scholarship proposal                                                                                                          
                                                                                                                                
1:05:38 PM                                                                                                                    
CO-CHAIR THOMAS announced the first  order of business would be a                                                               
report from the  commissioner of the Department  of Education and                                                               
Early   Development   regarding    the   Governor's   Performance                                                               
Scholarship  proposal. He  remarked that  the issue  of providing                                                               
access to  post-secondary education is  a pressing one  in Alaska                                                               
that  ranks  "dead last"  nationally  in  the percentage  of  low                                                               
income  families who  can  afford  a higher  education,  be it  a                                                               
vocational  school  a  community  college or  the  University  of                                                               
Alaska. The  state would  have to double  the enrollment  rate of                                                               
low-income Alaskans before  it could catch the number  50 spot on                                                               
the list.                                                                                                                       
                                                                                                                                
1:07:50 PM                                                                                                                    
LARRY LeDOUX,  Commissioner, Alaska  Department of  Education and                                                               
Early  Development, said  the Governor's  Performance Scholarship                                                               
(GPS) proposal is an important  move forward to improve education                                                               
by  inviting  our  students   to  pursue  excellence.  Graduation                                                               
requirements can be increased, but they  know now that if that is                                                               
done  unilaterally it  actually decreases  graduation rates.  The                                                               
real battle with  young people is attitude; they  must be engaged                                                               
in a vision  and be invited to move forward.  Sometimes they need                                                               
help in  developing a  personal vision for  success, and  that is                                                               
one thing  the scholarship program  does. The path begins  when a                                                               
child  in the  middle  schools  sits down  with  his parents  and                                                               
school officials and lays out  an education plan. The student can                                                               
then pursue excellence with his parents' support.                                                                               
                                                                                                                                
1:12:26 PM                                                                                                                    
COMMISSIONER  LeDOUX  stated   that  the  Governor's  Performance                                                               
Scholarship (GPS) program would  provide financial incentives for                                                               
high  school students  to earn  admission to  and be  prepared to                                                               
excel  at  public  and  private  institutions  of  vocational  or                                                               
academic  higher education  in  Alaska. GPS  recipients would  be                                                               
required to complete  a rigorous course of study  in high school,                                                               
have good  grades and score  well on an assessment.  Students who                                                               
meet  the  eligibility  requirements   would  be  entitled  to  a                                                               
scholarship;  Alaska  Post-Secondary  institutions  would  remain                                                               
free to determine their own admission policies.                                                                                 
                                                                                                                                
The  program would  begin with  the  high school  class of  2011,                                                               
which would  enter college  or technical schools  in the  fall of                                                               
2011.  The high  school course  requirements would  be phased  in                                                               
over time with the full  curriculum requirements being four years                                                               
of English, math and science and three years of social studies.                                                                 
                                                                                                                                
Rigorous course  requirements are central to  the program's value                                                               
he said.   The state currently requires high  school graduates to                                                               
take four  years of  English and three  years of  social studies,                                                               
but  only  two years  of  math  and  science. ACT,  a  nationwide                                                               
nonprofit   with  extensive   experience   in  college   entrance                                                               
assessments, reports  that students  are much  more likely  to do                                                               
well  in college  if  they  have taken  at  least  four years  of                                                               
English, three years of math,  social studies and science in high                                                               
school. The GPS has even  higher requirements than that. In fact,                                                               
ACT has found that students who  take a curriculum similar to the                                                               
GPS  requirement are  significantly  more likely  to  do well  in                                                               
college  than  other  students. The  GPS  program  would  require                                                               
school  districts to  talk to  students  in the  spring of  their                                                               
eighth-grade year or  to students who are enrolling  in an Alaska                                                               
public high  school for  the first time  about their  high school                                                               
curriculum  options in  the GPS  program.  Parents and  guardians                                                               
would be invited to attend.                                                                                                     
                                                                                                                                
The goals of  the GPS program are to  improve student performance                                                               
in  high school,  to increase  high school  graduation rates,  to                                                               
improve students' preparation for  college level work, to improve                                                               
students' scores on  college entrance exams, which  are the basis                                                               
for  some national  scholarships, to  bolster the  rigor of  high                                                               
school  curriculum,  to  boost   students'  opportunity  for  job                                                               
training, to  increase parents' involvement  in the  education of                                                               
their children,  to reduce students'  remediation in  college, to                                                               
increase  students'  academic   achievement  in  institutions  of                                                               
higher  education, and  provide for  timely completion  of higher                                                               
education  degrees. The  proposal envisions  these categories  of                                                               
scholarships:                                                                                                                   
   · A career and technical scholarship has to have an                                                                          
     acceptable GPA and assessment score on a work ready                                                                        
     assessment for awards capped at $3,000/year for two years.                                                                 
   · A silver scholarship has a C+ or higher GPA, an acceptable                                                                 
     score on a college entrance assessment for an award equal                                                                  
     to 50 percent of UA's tuition for the 2010/11 academic                                                                     
     school year for up to eight semesters.                                                                                     
   · A gold scholarship requires a B or higher GPA and an                                                                       
     acceptable score on a college entrance assessment for an                                                                   
     award equal to 75 percent of UA's tuition in the 2010/11                                                                   
     academic year for up to eight semesters.                                                                                   
   · A platinum scholarship requires an A average GPA, an                                                                       
     acceptable score on a college entrance assessment, and                                                                     
     would pay 100 percent of UA tuition for the 2010/11                                                                        
     academic school year for up to eight semesters.                                                                            
                                                                                                                                
The  GPS  may  be  use  for tuition  and  other  academic  costs.                                                               
Students  would  be  allowed  to  use  the  GPS  only  after  all                                                               
scholarship funds  including the Alaska Scholars  funds have been                                                               
expended. The GPS  funds would be sent directly  to the education                                                               
institutions.  The  eligibility   criteria  are  pretty  straight                                                               
forward; eligible students must  be Alaska residents, home school                                                               
and private  school students are  eligible if they  can establish                                                               
they  have  the equivalent  of  a  high  school diploma  and  the                                                               
required GPA,  assessment scores and curriculum.  Recipients must                                                               
apply for  the scholarship within  six months of  graduating from                                                               
high school and would have  six years from high school graduation                                                               
to use  their scholarship  unless they  receive an  extension for                                                               
military service. They must maintain  an acceptable GPA of 2.5 in                                                               
a post secondary school to maintain eligibility.                                                                                
                                                                                                                                
Part-time students  would receive  an award appropriate  to their                                                               
part-time  status. Recipients  would be  eligible to  continue to                                                               
receive  scholarships during  graduate school  if they  completed                                                               
their  four  year  degree,  are   within  six  years  of  initial                                                               
eligibility  and  have received  fewer  than  eight semesters  of                                                               
support for the program.                                                                                                        
                                                                                                                                
Non-eligible  students include  students  who are  in default  of                                                               
government  education loans,  have  not  complied with  selective                                                               
service requirements or are convicted  felons. The last mentioned                                                               
can  appeal  their  eligibility   to  the  Alaska  Department  of                                                               
Education and Early Development (DEED).                                                                                         
                                                                                                                                
1:16:01 PM                                                                                                                    
COMMISSIONER  LeDOUX said  the responsibilities  for implementing                                                               
the  program  have  been  divided  between  several  agencies  to                                                               
minimize the  cost of operating  the program. High  schools which                                                               
hold  students' transcripts  would  certify student  eligibility.                                                               
The DEED  would adopt regulations  regarding eligibility  such as                                                               
requirements for courses, GPAs and  assessment scores in the high                                                               
school,  and the  process by  which home  schooled and  privately                                                               
schooled  students demonstrate  eligibility and  requirements for                                                               
satisfactory progress in post secondary institutions.                                                                           
                                                                                                                                
The Alaska  Commission on Post Secondary  Education would provide                                                               
financial accountability and disburse  the funds to institutions.                                                               
The  DEED  in  consultation  with the  Department  of  Labor  and                                                               
Workforce Development would adopt  regulations to set criteria by                                                               
which career  and technical programs are  eligible to participate                                                               
in  the program.  The Governor  envisions this  program would  be                                                               
paid  for by  using  interest  gained from  fencing  off some  of                                                               
Alaska's earnings.                                                                                                              
                                                                                                                                
1:18:37 PM                                                                                                                    
CO-CHAIR  THOMAS  noted that  John  Boucher  from the  Office  of                                                               
Management and  Budget (OMB) was  online to answer  questions. He                                                               
asked how  different the curriculum  would be from  what actually                                                               
takes place now.                                                                                                                
                                                                                                                                
COMMISSIONER  LeDOUX  answered  that   Alaska  does  not  require                                                               
students to take more than two  years of math or science and this                                                               
program would  require four. These  are skills  that universities                                                               
and employers  say students  are weak in.   Many  schools already                                                               
require  four years  of English,  but not  all. Also,  they can't                                                               
just  think   of  traditional  course   work  in   sciences  like                                                               
chemistry, physics and biology.  Many different kinds of sciences                                                               
will meet the  requirement. Before No Teacher  Left Behind (NTLB)                                                               
came  on  line,   school  districts  did  a  lot   of  work  with                                                               
integrating   math  and   some   of   the  necessary   vocational                                                               
programming.  So he  thought  they we  would  see creativity  and                                                               
innovation  in  designing  real rigorous  science,  math,  social                                                               
studies, and language arts courses.                                                                                             
                                                                                                                                
CO-CHAIR THOMAS asked if he  felt that people are basically doing                                                               
minimum requirements,  so this  would have  a dramatic  impact on                                                               
the amount of math and science that students will take.                                                                         
                                                                                                                                
COMMISSION LeDoux  replied that students  who are on  the college                                                               
track  would take  these  courses anyway,  but  he believes  this                                                               
program will  invite students  who would  not consider  college a                                                               
possibility to  engage in a  more rigorous  program and go  on to                                                               
college  or  technical  school.  If   they  have  hope,  that  is                                                               
motivation to engage on that path.                                                                                              
                                                                                                                                
CO-CHAIR THOMAS asked how that would affect staffing.                                                                           
                                                                                                                                
COMMISSIONER LeDOUX  replied they  would certainly be  looking at                                                               
that. Some  courses go  away and  others move  in, but  you still                                                               
have the same number of students taking courses.                                                                                
                                                                                                                                
CO-CHAIR THOMAS  asked if the school  districts would standardize                                                               
which classes would qualify as math, science, et cetera.                                                                        
                                                                                                                                
COMMISSIONER  LeDOUX replied  that  each district  would set  its                                                               
curriculum,  but the  DEED  would work  very  closely to  develop                                                               
alternative methodologies  and curriculum to assist  districts to                                                               
develop that course work.                                                                                                       
                                                                                                                                
1:22:39 PM                                                                                                                    
CO-CHAIR MEYER  asked if the  language arts  requirement includes                                                               
foreign languages or is it just English.                                                                                        
                                                                                                                                
COMMISSIONER  LeDOUX answered  that it  does not  include foreign                                                               
language,  although some  national  scholarship programs  include                                                               
two years of a foreign language.                                                                                                
                                                                                                                                
CO-CHAIR  MEYER said  that seems  like something  to consider  in                                                               
committee  discussion.   It  seems   like  foreign   language  is                                                               
important any more to everything.                                                                                               
                                                                                                                                
COMMISSIONER LeDOUX  agreed with that  point; but they  felt that                                                               
needs to go through the  deliberative process. Some rural schools                                                               
and distance education programs would find difficulty with that.                                                                
                                                                                                                                
CO-CHAIR  MEYER   said  he   has  found   a  lot   of  need-based                                                               
scholarships, but not much for  middle class students who may not                                                               
be "A" students. Did he have  any idea of how many students would                                                               
take advantage of the GPS?                                                                                                      
                                                                                                                                
COMMISSIONER  LeDOUX  said  he  expected  that  interest  in  the                                                               
scholarship  would grow;  it  will be  talked  about from  eighth                                                               
grade on.   The nearest estimate  they have is from  the State of                                                               
Wyoming  that instituted  a similar  program called  the Hathaway                                                               
Scholarship.  About  25 percent  of  their  students use  it.  He                                                               
emphasized  that  the  criteria  for  this  scholarship  is  very                                                               
rigorous. "We want  them to be proud.  This is not going  to be a                                                               
cakewalk."                                                                                                                      
                                                                                                                                
CO-CHAIR  MEYER said  the PFD  is already  set up  to go  so that                                                               
students can have  a free ride at the University,  which is good,                                                               
but  he wanted  to know  if the  scholarship has  flexibility for                                                               
folks who might want to go  to technical school who wouldn't need                                                               
the four years of math, for instance.                                                                                           
                                                                                                                                
COMMISSIONER   LeDOUX  replied   that  other   scholarships  have                                                               
differing levels  of curriculum  demands. However,  industry says                                                               
that their  young people need  to be  proficient in the  areas of                                                               
math,  technical writing  and problem  solving; and  so they  are                                                               
holding  to a  rigorous standard.  This  does not  mean that  all                                                               
students would  take calculus  and new curricula  may have  to be                                                               
developed, which  has been done  in the past. For  instance, math                                                               
concepts have been combined with welding or technical reading.                                                                  
                                                                                                                                
CO-CHAIR MEYER asked if a student  has to complete all four years                                                               
of college and graduate before getting the scholarship.                                                                         
                                                                                                                                
COMMISSIONER LeDOUX  replied that  students receive the  funds as                                                               
they  become  eligible  and eight  semesters  of  eligibility  is                                                               
envisioned that  a student  would have to  use within  six years.                                                               
Students  would  have to  register  for  the program  within  six                                                               
months of graduating from high school.  So, if a student goes for                                                               
two years under  this program, for instance, and  then chooses to                                                               
not go any  more the institution would be paid  for the first two                                                               
years they had attended.                                                                                                        
                                                                                                                                
1:29:06 PM                                                                                                                    
REPRESENTATIVE SEATON said  the first grant is  proposed to start                                                               
in 2011 with the idea  of building expectations from eighth grade                                                               
on to  engage students in  something they are not  already doing.                                                               
Now it  seems like they are  saying the current A  and B students                                                               
will be getting  scholarships and it's not going  to be dependent                                                               
on  changing   of  attitude  or   requirements.  "Am   I  missing                                                               
something?"                                                                                                                     
                                                                                                                                
COMMISSIONER LeDOUX said he had  accurately portrayed it, but the                                                               
reason  to implement  the  scholarship in  2011  is because  they                                                               
believe they have  students who are working hard  in school right                                                               
now.  They will  clear the  pathway  for other  students who  are                                                               
being  motivated. Implementation  could take  two years,  because                                                               
all students take two years of those core areas.                                                                                
                                                                                                                                
REPRESENTATIVE SEATON  said he  wanted to keep  the goals  of the                                                               
program in  sight. He also  wanted to know if  these scholarships                                                               
are going to be other than GPA-based.                                                                                           
                                                                                                                                
COMMISSIONER  LeDOUX replied  that they  envision three  criteria                                                               
for eligibility.  The first is  to complete a rigorous  course of                                                               
study, the  grade point  requirement must be  met, and  the third                                                               
criterion is the assessment score  that would be set depending on                                                               
the scholarship.  The highest assessment score  would be required                                                               
for the  platinum scholarship;  the lowest  would be  silver. All                                                               
three would have  to be met, and each has  a place in determining                                                               
the goals of  the program. Without the assessment  they could end                                                               
up with rampant  grade inflation, something that  has happened in                                                               
other states. That  doesn't do any good; the criterion  has to be                                                               
rigorous  enough  to  actually   prepare  the  students  for  the                                                               
college.  A correlation  between student  performance in  college                                                               
and  some  national  exams,  the  ACT  and  SAT,  has  been  well                                                               
established  statistically. The  State Board  of Education  would                                                               
actually set the  cut scores. He advised  that legislation should                                                               
not provide too  many specifics, because it would get  in the way                                                               
during implementation  of the program.  Having the Board  set the                                                               
scores  would   provide  for  public   input  and  be   based  on                                                               
regulations promulgated by the department.                                                                                      
                                                                                                                                
REPRESENTATIVE SEATON  said he was  trying to figure out  how all                                                               
three were  going to be done.  Does an ACT score  override a good                                                               
GPA, for instance?                                                                                                              
                                                                                                                                
COMMISSIONER LeDOUX  answered that  they believe a  student's ACT                                                               
score will be commensurate with his GPA - they go together.                                                                     
                                                                                                                                
1:36:24 PM                                                                                                                    
REPRESENTATIVE  BUCH questioned  if the  funding would  require a                                                               
constitutional   amendment,  because   they  are   talking  about                                                               
dedicating funds.                                                                                                               
                                                                                                                                
CO-CHAIR THOMAS  said he  hadn't heard the  issue raised,  and he                                                               
didn't know the answer.                                                                                                         
                                                                                                                                
1:37:50 PM                                                                                                                    
COMMISSIONER  LeDOUX   responded  that  the   Governor's  initial                                                               
proposal talked  about "fencing off"  some of the savings  to pay                                                               
for  the  scholarship. Other  states  have  set aside  a  certain                                                               
amount of money  and pay for the  scholarship through accumulated                                                               
interest; some  states do  direct appropriations;  some set  up a                                                               
lottery system. He  thought it was up to the  legislature to come                                                               
up with the funding process.                                                                                                    
                                                                                                                                
1:38:38 PM                                                                                                                    
EDDY  JEANS, Director,  School Finance,  Department of  Education                                                               
and  Early  Development,  said that  the  Governor  talked  about                                                               
setting aside $400  million out of current savings  and using the                                                               
interest  from  that  through   appropriation.  He  thought  John                                                               
Boucher  from the  Office of  Management and  Budget (OMB)  could                                                               
respond  to the  constitutional question,  but basically  that is                                                               
why they are not calling it an endowment fund.                                                                                  
                                                                                                                                
1:39:36 PM                                                                                                                    
REPRESENTATIVE BUCH said  it seems to him to  still be dedicating                                                               
funds.                                                                                                                          
                                                                                                                                
CO-CHAIR   THOMAS   said   he  realizes   if   it's   an   annual                                                               
appropriation, "that might be where the break line is."                                                                         
                                                                                                                                
1:40:43 PM                                                                                                                    
SENATOR OLSON  remarked that some  of his district's  schools are                                                               
not on  A,B,C,D,F system and  asked how are those  students would                                                               
be ranked.                                                                                                                      
                                                                                                                                
COMMISSIONER LeDOUX  replied that  all school districts  that are                                                               
involved in a standards-based system  have developed an algorithm                                                               
to report grades,  and they will have to do  the same to evaluate                                                               
grade  point  averages. The  great  equalizer  is the  curriculum                                                               
taken and the assessment score.                                                                                                 
                                                                                                                                
SENATOR  OLSON asked  how  older students  who  are still  having                                                               
trouble because of family or getting a  late start - with a GED -                                                               
can become eligible for the GPS.                                                                                                
                                                                                                                                
COMMISSIONER LeDOUX replied that some  states have put together a                                                               
different pathway  for students  who score a  certain score  on a                                                               
GED to  receive merit  support. This  program currently  does not                                                               
include  that pathway,  but it  does  exist. He  knows that  some                                                               
people  do take  some time  to settle  down and  get some  common                                                               
sense in  their head, and the  DEED is working very  closely with                                                               
the Alaska Department of Labor  and Workforce Development (DLWFD)                                                               
to respond to  those young people. He just visited  a facility in                                                               
Kodiak that  is jointly sponsored  by the district and  the DLWFD                                                               
that works with  young people from the ages of  16-24 - providing                                                               
services   like   credit   recovery,  high   school   graduation,                                                               
preparation for the GED, and  job and career counseling. Agencies                                                               
are starting  to cooperate to provide  opportunities for success.                                                               
Providing a pathway for these  young people could be an important                                                               
component of this program.                                                                                                      
                                                                                                                                
SENATOR OLSON asked on the  other end of spectrum, how provisions                                                               
can be  made for the required  four years of math,  for instance,                                                               
with  a student  who is  highly motivated  and gets  through high                                                               
school in three years.                                                                                                          
                                                                                                                                
COMMISSIONER  LeDOUX answered  that  usually  those students  who                                                               
graduate  in three  years  meet all  of  the graduation  criteria                                                               
already.  There  are many  opportunities  for  high achievers  to                                                               
engage  in co-credit  opportunities and  doubling up  for college                                                               
credits  before  they  graduate  from  high  school  -  sometimes                                                               
amounting to their whole first and second years.                                                                                
                                                                                                                                
SENATOR  OLSON asked  what affect  he  saw this  having on  rural                                                               
students who are struggling.                                                                                                    
                                                                                                                                
COMMISSIONER  LeDOUX answered  that their  challenges in  getting                                                               
rural students ready  to enter this program are great  - the same                                                               
that they face now. Steps  are being taken through implementation                                                               
of their education  plan; they are developing  the initial stages                                                               
of a comprehensive virtual school  to insure that every child has                                                               
access  to   a  highly  qualified  teacher   wherever  he  lives.                                                               
Improving the  quality of education  available to  rural students                                                               
will be  very important  to the  implementation of  this project,                                                               
but he emphasized they are not there yet.                                                                                       
                                                                                                                                
CO-CHAIR THOMAS  asked him  to explain more  fully the  levels of                                                               
scholarships and what the tie-breaker would be for them.                                                                        
                                                                                                                                
COMMISSIONER LeDOUX said he had  not considered such a process at                                                               
this point, but he  would have to come up with  a fair process to                                                               
spread the money out. A  student who takes a rigorous curriculum,                                                               
works hard  and gets  a C+,  who is working  at the  very highest                                                               
ends of  their ability, to  him, merits  the same as  someone who                                                               
gets an A and maybe works at half of their ability.                                                                             
                                                                                                                                
1:47:12 PM                                                                                                                    
REPRESENTATIVE MUNOZ  said she thought  the program  is positive.                                                               
Following  up Senator  Olson's  question in  the  same vein,  she                                                               
asked how they ensure that kids  in the seventh and eighth grades                                                               
are  adequately taking  advantage of  this opportunity  when they                                                               
know that  scholarships tend to  favor those already on  the fast                                                               
track.                                                                                                                          
                                                                                                                                
COMMISSIONER LeDOUX answered that  as an elementary principal, he                                                               
always  asked his  sixth grade  students  where they  will go  to                                                               
college or where  they will go to tech school,  and they all have                                                               
an answer. Some  say they don't know, but it's  only because they                                                               
have not thought about it yet  and are surprised at the question.                                                               
But at  that age they all  have a dream and  see themselves doing                                                               
that.  They  also know  at  the  other  end  only 60  percent  of                                                               
students are  graduating in four years;  and so many of  them are                                                               
not. One  of the  key components  of this program  is to  build a                                                               
vision  in  each child  and  that  vision  starts in  the  sixth,                                                               
seventh  and eighth  grades.  Students who  perform  well at  the                                                               
middle school level carry that  performance on to the high school                                                               
and  likewise, students  who start  failure in  the early  grades                                                               
carry it on  to high school.   A sixth grader who  is behind just                                                               
one  grade  level  in  math   or  language  arts,  who  has  poor                                                               
attendance and who  may get a negative in discipline,  has a one-                                                               
in-ten chance of  graduating from high school.  Dreams must start                                                               
early so  parents can see  the pathway with their  children. It's                                                               
so   important   that  the   Governor   has   initiated  a   very                                                               
comprehensive  effort  to  develop interventions  at  the  middle                                                               
school level.  If he  had his  way, he  would have  every student                                                               
come  in with  their parents  every  year and  update and  review                                                               
their education plan.                                                                                                           
                                                                                                                                
1:51:38 PM                                                                                                                    
REPRESENTATIVE KELLER said normally  when one thinks about access                                                               
to  post  secondary education  one  thinks  about money,  and  he                                                               
                                                st                                                                              
wanted to know what was meant by Alaska being 51 in access.                                                                     
                                                                                                                                
1:53:04 PM                                                                                                                    
DIANE  BARRANS, Executive  Director,  Alaska  Commission on  Post                                                               
Secondary Education,  explained that is  a reference to  the rate                                                               
at which  college age kids go  on from high school  to [indisc.].                                                               
Typically  they  look at  the  umber  of  19-year olds  that  are                                                               
currently   enrolled  in   post  secondary   institutions  as   a                                                               
percentage of the number of ninth graders.                                                                                      
                                                                                                                                
1:53:53 PM                                                                                                                    
CHAIR  SEATON asked  since  the GPS  scholarships  will be  given                                                               
after  application of  other  scholarships  including the  Alaska                                                               
Scholars and since they are  both merit-based tuition grants, how                                                               
they relate financially.                                                                                                        
                                                                                                                                
1:54:46 PM                                                                                                                    
COMMISSIONER LeDOUX explained  that they decided to  make the GPS                                                               
the  scholarship of  "last pay"  and before  student loans.  Many                                                               
students get  several scholarships and  when those are  added up,                                                               
the GPS would be  the last to pay. It wouldn't  pay any more than                                                               
was necessary to pay for  tuition and those costs associated with                                                               
the college.                                                                                                                    
                                                                                                                                
1:55:39 PM                                                                                                                    
MS.  BARRANS  added  that  the   way  student  financial  aid  is                                                               
administered the  funds typically flow through  the financial aid                                                               
office.  The  financial  aid  directors  are  their  partners  in                                                               
administering those  aids and  are familiar  with the  rules that                                                               
apply, whether it's a Pell,  state or university grant. The rules                                                               
that  guide the  funds  for  this program  could  be  set in  the                                                               
legislation.  She   understood  that   the  GPS  funds   were  to                                                               
supplement, not supplant other non-loan aids.                                                                                   
                                                                                                                                
CHAIR  SEATON  asked if  under  the  current proposal  a  student                                                               
qualified for  a full Alaska  scholarship, would he  get anything                                                               
out of the GPS if he went to the University of Alaska.                                                                          
                                                                                                                                
MS.  BARRANS  replied that  they  have  talked about  having  the                                                               
dollar amount  of the  award be associated  to tuition,  but that                                                               
the use of the award would  not be restricted to tuition only. So                                                               
if  tuition  is  satisfied  from  another  earned  financial  aid                                                               
source,  non-loan,  or  other  source   the  certified  costs  of                                                               
attendance could be defrayed from the scholarship award amount.                                                                 
                                                                                                                                
CHAIR SEATON said  they need more information on that.   He asked                                                               
if  the  criteria  for  career  or  technical  requirements  were                                                               
similar  to  the  Hathaway  plan  that  has  qualifications  with                                                               
WorkKeys or are they still talking about ACT tests.                                                                             
                                                                                                                                
COMMISSIONER LeDOUX  replied that the  intent is to  use WorkKeys                                                               
with  vocational   and  career  technical  scholarships   as  the                                                               
assessment  of choice,  but that  will  be decided  by the  State                                                               
Board of Education - but he wouldn't suggest using the ACT.                                                                     
                                                                                                                                
CO-CHAIR  THOMAS asked  for  information  on existing  need-based                                                               
scholarships.                                                                                                                   
                                                                                                                                
2:00:04 PM                                                                                                                    
MS. BARRANS  replied that  currently the  state has  one program,                                                               
the Alaska Advantage Education Grant;  it is not portable and the                                                               
maximum a student can receive through  it is $2,000.  It has been                                                               
funded  through the  current fiscal  year from  a combination  of                                                               
sources. The first is $500,000/year  from the Alaska Student Loan                                                               
Corporation, about  $100,000 from  the federal LEAP  program, and                                                               
about a  year ago  the legislature  made a  $800,000/year capital                                                               
appropriation  over a  three-year  period. The  total numbers  of                                                               
awards they make under that program are relatively limited.                                                                     
                                                                                                                                
She explained  that their current  financial situation  would not                                                               
allow the  Alaska Student  Loan Corporation to  do that  into the                                                               
foreseeable future  and the current year  is the last one  to put                                                               
funds into that program. One more  year of funding remains in the                                                               
capital appropriation; so for 2010/11  they expect the funding to                                                               
be  limited to  just the  capital appropriation  and the  federal                                                               
dollars.  After that  they need  to take  a new  look at  funding                                                               
sources for that program.                                                                                                       
                                                                                                                                
CO-CHAIR THOMAS asked for a summary of that for the committee.                                                                  
                                                                                                                                
MS.  BARRANS  agreed  to  get   that  and  added  that  the  more                                                               
materially important  thing for need  based financial aid  is the                                                               
federal  Pell grant,  which is  in excess  of $5,000/year  at the                                                               
maximum level.                                                                                                                  
                                                                                                                                
2:02:43 PM                                                                                                                    
REPRESENTATIVE GARDNER  expressed her understanding  that tuition                                                               
covers a small portion of the  actual cost of having a student at                                                               
the  University   and  asked   Melissa  Hall   [representing  the                                                               
University of  Alaska] if  a student  has a  scholarship covering                                                               
tuition and the GPS program brings  in a lot more students to the                                                               
University, would  that impact  its funding for  a host  of other                                                               
things unless the  legislature also increased the  funding to the                                                               
University. [Waiting for Ms. Hall to come back on line.]                                                                        
                                                                                                                                
2:03:52 PM                                                                                                                    
CHAIR SEATON asked for more information  on the use of ACT scores                                                               
by other states that use the Taylor Plan.                                                                                       
                                                                                                                                
2:05:19 PM                                                                                                                    
CO-CHAIR MEYER  asked if Alaska could  go back to a  program like                                                               
the  student loan  forgiveness  program that  the  state used  to                                                               
have.                                                                                                                           
                                                                                                                                
MS. BARRANS  responded that  from about  1968-1987 Alaska  had an                                                               
education loan  program that was  funded directly by  the general                                                               
fund  and  during that  period  of  time essentially  a  borrower                                                               
agreed that  if they  completed their  certificate or  degree for                                                               
which they borrowed  the funds and then returned to  Alaska for a                                                               
period of time  (initially it required that they  be employed and                                                               
later simply to reside) that they  could have up to 50 percent of                                                               
the loan forgiven.  Switching back to that  program would require                                                               
the state  to again begin  to fund  that program at  whatever the                                                               
value  of the  expected forgiveness  benefit would  be with  some                                                               
expectation for  losses. She  noted that  one of  the unfortunate                                                               
side effects of that program  was that students borrowed with the                                                               
expectation that they  would complete their degree  and return to                                                               
Alaska, so they  borrowed more than they needed at  the time. The                                                               
end  result was  very high  default rates  of 28-29  percent. So,                                                               
there were costs to the program beyond the cost of forgiveness.                                                                 
                                                                                                                                
Probably  less   than  one  quarter  of   the  students  actually                                                               
completed their degree  and met the residency  criteria. Even so,                                                               
the  cost associated  with forgiveness  over time  was about  $70                                                               
million.  The  flip side is that the state  was funding the loans                                                               
to  the  tune   of  $60-80  million  annually   in  general  fund                                                               
appropriations. So  there are some complexities  to consider with                                                               
that model.                                                                                                                     
                                                                                                                                
2:08:32 PM                                                                                                                    
CO-CHAIR MEYER  remembered when he  was co-chair of  Finance that                                                               
the Student Loan  Corporation would pay the state  a dividend and                                                               
he  asked if  it is  still paying  a dividend  and if  that money                                                               
could be used to fund the GPS program.                                                                                          
                                                                                                                                
MS. BARRANS  replied that  the statutory  authority by  which the                                                               
Corporation  Board has  paid returns  to  the state  in the  past                                                               
still exists, but  they have not paid a dividend  to the state in                                                               
the  current  fiscal year  and  the  Board will  be  recommending                                                               
against paying one in the  upcoming fiscal year simply because of                                                               
the  financial  circumstances  in  which  the  corporation  finds                                                               
itself. This year  it was unable to issue bonds  in the market to                                                               
continue to finance  their programs and the  legislature passed a                                                               
bill that allowed  them to essentially have an  investment in the                                                               
Student  Loan  Corporation  in  the  form  of  a  loan  from  the                                                               
Department of  Revenue. So, until the  corporation normalizes its                                                               
financial status, they have recommended  to the Board, and it has                                                               
agreed, to  retain earnings for use  in making the new  loans and                                                               
to continue paying the costs of operating the agency.                                                                           
                                                                                                                                
2:10:31 PM                                                                                                                    
SAICHI  OBA,  Assistant  Vice  President,  Student  Services  and                                                               
Enrollment  Management,  University  of  Alaska,  said  he  would                                                               
respond to the question from  Representative Gardner who asked if                                                               
these programs attract more students,  would the legislature have                                                               
to provide more operating money  to the University. The answer is                                                               
that  tuition  does  not  cover   the  total  cost  of  educating                                                               
students,  so there  is the  chance  that the  GPS program  could                                                               
increase enrollment  dramatically and  that the  University would                                                               
have to ask for more funds.                                                                                                     
                                                                                                                                
In  reference  to a  comment  by  Commissioner LeDoux  about  the                                                               
estimated  number of  students  that might  be  attracted to  the                                                               
University or  post secondary education following  something like                                                               
GPS,  he said  that the  University for  two years  in a  row has                                                               
attracted  17  percent  more  first-time  freshmen  than  in  the                                                               
previous year. So, if enrollment  were to increase by 25 percent,                                                               
that would  be about 8  percent more than current  increases. So,                                                               
Representative  Gardner's question  about the  University needing                                                               
more money is appropriate.                                                                                                      
                                                                                                                                
REPRESENTATIVE GARDNER commented that  they would probably need a                                                               
fiscal  note from  the University,  too, before  moving any  bill                                                               
forward.                                                                                                                        
                                                                                                                                
2:12:57 PM                                                                                                                    
CHAIR  SEATON  asked  the department  to  provide  the  relative                                                                
increments    of   increases    that   took   place   under   the                                                               
Hathaway  plan to  use  as a  base  line for  what  to expect  in                                                               
university enrollment.                                                                                                          
                                                                                                                                
COMMISSIONER LeDOUX  said he would  try to make  that information                                                               
available. He just  spent some time with  the deputy commissioner                                                               
in Wyoming  that has  the Hathaway  scholarship program,  and she                                                               
emailed 200  pages of that data  to him. He reminded  everyone of                                                               
something that  is different  than all the  other states  in that                                                               
the  GPS scholarship  is not  just limited  to the  University of                                                               
Alaska, it's  limited to  credited institutions  in the  State of                                                               
Alaska  and technical  schools that  have been  certified by  the                                                               
Alaska  Department of  Labor and  Workforce  Development. So  the                                                               
increase will  not just  be to  universities, but  throughout the                                                               
state.  He   thought  they  would  see   enrollment  increase  at                                                               
community  colleges  because  students  can live  at  home  while                                                               
attending school,  and they will  see the development  of quality                                                               
technical  programs to  support building  the pipeline.  This may                                                               
balance  some of  the  costs associated  with  the University  of                                                               
Alaska.                                                                                                                         
                                                                                                                                
2:14:48 PM                                                                                                                    
REPRESENTATIVE  MUNOZ asked  Ms. Barrans  if the  Corporation had                                                               
analyzed the  impacts that fewer loans  will have on it  with the                                                               
implementation of the GPS program.                                                                                              
                                                                                                                                
MS. BARRANS replied that the  corporation continues to be a sound                                                               
financial entity, but the marketplace  to issue bonds backed with                                                               
student loans  has disappeared during this  period of disruption.                                                               
That  could normalize  with  respect to  their  ability to  issue                                                               
fixed rate debt.                                                                                                                
                                                                                                                                
She  explained  that  the student  loan  situation  has  multiple                                                               
moving parts  right now.  President Obama  has proposed,  and the                                                               
House  has  adopted,  a  plan to  eliminate  the  federal  family                                                               
education  loan  program.  This  means  that  going  forward  the                                                               
federal government  would make education loans  available through                                                               
the Department of Education directly.  The commission has already                                                               
been engaged in  that area since 2002 when it  became a lender in                                                               
the  federal Education  Loan Program,  which represents  about 60                                                               
percent of  the annual lending  volume that she  makes currently.                                                               
Once some  certainty regarding timing  of the change to  a direct                                                               
loan-only  program has  been established,  their entire  business                                                               
model will have to be looked at.                                                                                                
                                                                                                                                
Additionally,  Ms. Barrans  said,  at their  request  a bill  was                                                               
passed to  raise the credit  criteria on alternative  state loans                                                               
(the  state  funded  loans,  not  those  that  have  the  federal                                                               
guarantee). As a  result of this raise, they saw  a steep drop in                                                               
the  number  of  loans  made through  that  program.  So,  absent                                                               
federal  lending  activity,  they  expect to  see  their  lending                                                               
activity drop by about 80 percent.                                                                                              
                                                                                                                                
Everyone  agrees that  the impacts  of the  GPS would  be gradual                                                               
over time. The  expectation is that those students  going on over                                                               
the three-to-four-year phase-in would  be much better prepared to                                                               
benefit from the  post secondary education training.  They do see                                                               
students being able  to substitute non-loan aid for  loan debt as                                                               
being a positive thing, not  necessarily for the corporation, but                                                               
for the students.                                                                                                               
                                                                                                                                
CO-CHAIR  THOMAS  said  he  wanted John  Boucher  to  respond  to                                                               
Representative  Buch's  question  about  dedicated  funds  versus                                                               
annual appropriations.                                                                                                          
                                                                                                                                
JOHN  BOUCHER, Senior  Economist,  Office of  the Governor,  said                                                               
they  initially envisioned  that  the fund  would be  capitalized                                                               
with $400 million;  however, the source of that  funding is still                                                               
under discussion. The  idea is that approximately  $20 million of                                                               
the earnings from this "400 Fund"  would be spun off on an annual                                                               
basis,  and that  would  be subject  to  an annual  appropriation                                                               
process by the  legislature. The first appropriation  to the fund                                                               
would be a one-time appropriation.  The actual scholarships would                                                               
be granted and used for operations  out of the smaller of the two                                                               
funds.                                                                                                                          
                                                                                                                                
REPRESENTATIVE   BUCH  said   he   thought   having  a   one-time                                                               
appropriation would make the Governor's  long term budgeting much                                                               
easier and  he wanted the public  to understand the plan  so they                                                               
support it.                                                                                                                     
                                                                                                                                
MR.  BOUCHER  assured  them  that  they  are  not  interested  in                                                               
creating a dedicated fund.                                                                                                      
                                                                                                                                
2:24:07 PM                                                                                                                    
REPRESENTATIVE GARDNER asked  if "holding out a  carrot here" for                                                               
students and  parents to follow  the plan might create  a problem                                                               
when  a  future legislature  chooses  not  to appropriate  funds.                                                               
"What happens then?"                                                                                                            
                                                                                                                                
MR. BOUCHER responded  that is an excellent point  that will have                                                               
to be deliberated in the process of creating the fund.                                                                          
                                                                                                                                
2:25:10 PM                                                                                                                    
CO-CHAIR MEYER  remarked that this  is no different than  what is                                                               
done with  school bonds  that are  subject to  appropriation each                                                               
year.                                                                                                                           
                                                                                                                                
2:25:40 PM                                                                                                                    
CHAIR SEATON said the Amerada Hess  Fund in the Permanent Fund is                                                               
similar;  it  automatically spins  out  the  interest which  gets                                                               
appropriated or  not for any  purpose, and the Legislature  has a                                                               
pretty good history of following up with appropriations.                                                                        
                                                                                                                                
2:26:40 PM                                                                                                                    
CHAIR SEATON  remarked that  other states  have been  looking for                                                               
ways to increase the competency of  their work forces, and one of                                                               
the things that has been most  productive has been looking at the                                                               
non-traditional  student  - like  some  which  Senator Olson  was                                                               
talking about. It seems this  program would look only at students                                                               
who  go  through a  certain  curriculum  and finish  the  program                                                               
within a  certain amount of  time -  and that goes  against ideas                                                               
that are being generated in other parts of the United States.                                                                   
                                                                                                                                
2:29:04 PM                                                                                                                    
COMMISSIONER LeDOUX  restated his  belief that this  program will                                                               
invite students to graduate from  high school after going through                                                               
a rigorous curriculum. It does not  mean that students who do not                                                               
qualify  for the  scholarship will  not go  to college  or pursue                                                               
some  other avenue  of financing  their  college education.  This                                                               
will create a culture of  learning and achievement in schools and                                                               
it will draw all students forward.  It raises the bar and demands                                                               
excellence and if those are achieved,  there will be a pathway to                                                               
go to college.                                                                                                                  
                                                                                                                                
Also, he  said, the design  of the  legislation is such  that the                                                               
DEED and  the DOLWFD  can provide the  flexibility to  respond to                                                               
individual  students within  the program.  That is  why they  are                                                               
trying to be non-specific about students' qualifications.                                                                       
                                                                                                                                
CHAIR  SEATON said  he thought  he heard  "high school  graduates                                                               
within  six months  of graduation,"  which  does not  seem to  be                                                               
flexible  enough  for  non-traditional  students.  He  hoped  the                                                               
department could come forward with other avenues for qualifying.                                                                
                                                                                                                                
COMMISSIONER   LeDOUX  responded   that  requiring   students  to                                                               
register for the program within  six months of graduation doesn't                                                               
mean  they  have to  go  to  college  right  then; it  means  the                                                               
department  needs to  know in  terms of  financial accountability                                                               
how  many students  are eligible  to  draw on  the funds  - so  a                                                               
student who qualifies  for a scholarship and chooses  to go spend                                                               
three years going  to school outside the state would  not give up                                                               
the  right  to  access  their scholarship  when  they  return  to                                                               
Alaska.  It's  more  of  a  registration  of  participation.  For                                                               
instance,  a  student  can  go   outside  to  school  and  get  a                                                               
Bachelor's  degree,   come  back   to  Alaska,  and   because  he                                                               
registered for the  scholarship he would still have  two years of                                                               
eligibility (for a total of six years).                                                                                         
                                                                                                                                
He  related  that  the  Hathaway  scholarship  has  80  pages  of                                                               
regulations. Further he said that  University of Alaska graduates                                                               
don't have to  leave the state because of  the declining economy;                                                               
they  are getting  hired by  Alaskan  institutions. This  program                                                               
encourages them to stay and fill the state's workforce needs.                                                                   
                                                                                                                                
CO-CHAIR THOMAS  asked if they  had looked  at all of  the states                                                               
that use the  Hathaway plan. Were some more  relative to Alaska's                                                               
economy?                                                                                                                        
                                                                                                                                
COMMISSIONER LeDOUX replied  that they looked at  all states, but                                                               
the Hathaway Plan in Wyoming is  the most similar to ours. It set                                                               
aside $400 million, for instance.                                                                                               
                                                                                                                                
2:35:59 PM                                                                                                                    
SENATOR OLSON  asked if WAMI is  the only program this  caters to                                                               
as far  as students going to  medical school, and if  they aren't                                                               
accepted into the WAMI program,  could they still be provided for                                                               
if they have  the incentive to get accepted  into another medical                                                               
school outside the State of Alaska?                                                                                             
                                                                                                                                
2:36:51 PM                                                                                                                    
MS. BARRANS  responded that  the use of  funds outside  the state                                                               
hadn't been  extensively discussed.  The initial proposal  is for                                                               
non-portable funds.                                                                                                             
                                                                                                                                
SENATOR OLSON  asked if the intent  of the bill is  to get higher                                                               
       st                                                                                                                       
than 51   place or  to get more students  to stay in  Alaska, and                                                               
why don't they  focus on some of the state's  needs especially in                                                               
the medical field.                                                                                                              
                                                                                                                                
COMMISSIONER LeDOUX  replied that  the intent of  the scholarship                                                               
program is  to insure  that Alaskan  students have  the knowledge                                                               
and capability  to engage  in any  profession when  they graduate                                                               
from  high school.  He believes  that one  of the  limitations to                                                               
students entering  the medical  and science  fields right  now is                                                               
their lack  of preparation in  math, science, and  language arts;                                                               
this program  will invite students  to achieve a  higher standard                                                               
of  excellence so  that  universities do  not  have to  remediate                                                               
them.  The  department  feels  that because  of  the  quality  of                                                               
Alaska's post  secondary institutions its students  will elect to                                                               
stay if  they have that  opportunity. Other  institutions besides                                                               
the university will  grow and continue to  invite these students.                                                               
"So, our  intent is, as  the Governor  has indicated, that  in 20                                                               
years  we want  to be  able to  fill our  own jobs  with our  own                                                               
people, with a  highly trained workforce in the  State of Alaska.                                                               
We feel this is one of the steps to make that happen."                                                                          
                                                                                                                                
2:38:52 PM                                                                                                                    
SENATOR  OLSON said  his concern  as a  policy maker  is that  it                                                               
looks like  they are putting more  emphasis on people who  can go                                                               
to graduate  school and  get a  Ph.D. in physics  - which  is not                                                               
necessarily what is needed in Alaska.   More people are needed in                                                               
the health care field he repeated.                                                                                              
                                                                                                                                
COMMISSIONER LeDOUX responded  that GPS has a  strong emphasis on                                                               
opportunity for those  students who are interested  in career and                                                               
technical  education. It  doesn't differentiate  between a  four-                                                               
year and  a two-year  degree and  it is  open to  other non-state                                                               
institutions  in  Alaska  that  are  career  and  technical  type                                                               
programs. And,  he said,  it's to make  sure that  every graduate                                                               
wherever  they  go  to  school  has  the  skills,  knowledge  and                                                               
confidence, and vision to be successful.                                                                                        
                                                                                                                                
2:44:33 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
2:55:51 PM                                                                                                                    
CO-CHAIR THOMAS called the meeting back to order at 2:55.                                                                       
                                                                                                                                
DAVE  LONGANECKER, President,  Western  Interstate Commission  on                                                               
Higher Education (WICHE), said his  purpose isn't to critique the                                                               
GPS program, but to talk  about the experience around the country                                                               
with respect to financial aid  programs and how they have worked,                                                               
and what the strengths and  weakness of different approaches have                                                               
been.  He  would talk  about  both  need  based and  merit  based                                                               
financial aid programs.                                                                                                         
                                                                                                                                
2:58:02 PM                                                                                                                    
MR.  LONGANECKER said  whenever you  are talking  about financial                                                               
aid you  have to  think about  it in the  context of  the overall                                                               
financing structure  of post secondary  education in  Alaska. You                                                               
can't think  about financial aid  without thinking about  the way                                                               
and  extent to  which you  are supporting  your institutions  and                                                               
appropriations, tuition  policy and financial aid  policy. All of                                                               
those programs  affect student success and  institutional quality                                                               
and should be in sync, but he would focus on financial aid.                                                                     
                                                                                                                                
As  a starting  point five  key factors  make good  financial aid                                                               
policy.  The first  is a  strong clear  rationale and  philosophy                                                               
behind what is going to be done  and what it is that will get you                                                               
from here  to there; and what  is it about today's  policies that                                                               
aren't getting  you there.  The second is  knowing what  will get                                                               
you to  those goals and how  you will know that  you have reached                                                               
them. Third, you  want a program that supports the  goals and the                                                               
rationale.  Then  you design  the  program.  Fourth, you  want  a                                                               
winning  coalition for  program; it  makes very  little sense  to                                                               
develop the perfect  program that nobody can  support. Fifth, you                                                               
want a program that you can afford into the future.                                                                             
                                                                                                                                
2:59:32 PM                                                                                                                    
MR.   LONGANECKER  said   there  are   generally  two   perceived                                                               
rationales  behind financial  aid programs;  one is  using it  to                                                               
make college accessible  financially, and the other  is to reward                                                               
meritorious   behavior.   Both    have   passionate   supporters.                                                               
Louisiana is  very passionate about  its Taylor Program  which he                                                               
wouldn't support.                                                                                                               
                                                                                                                                
He  remarked that  there is  more to  the story  than the  little                                                               
battle between  need based  and merit  based financial  aid. Some                                                               
say  that the  Taylor Plan  and the  Hope scholarship  in Georgia                                                               
were the  great discoveries  of the  1990s, but  that is  not so.                                                               
Need based  aid started in  about 1960,  and some would  say with                                                               
the G.I. bill after 1945. Until  then financial aid was only done                                                               
for  meritorious students.  The Higher  Education Act  of 1964/65                                                               
really started providing need based  grant aid and encouraged the                                                               
states  to do  the  same  with a  state  student incentive  grant                                                               
program.  The  LEEP  program (Laclede  Early  Education  Program)                                                               
brought  a  lot   of  states  into  the   position  of  providing                                                               
substantial grant aid - but not Alaska.                                                                                         
                                                                                                                                
Usually  in the  modern  context these  are  focused on  covering                                                               
tuition  or  a  portion  thereof,  he  explained.  That  is  very                                                               
different than need based aid  which generally looks at the total                                                               
budget  the student  faces, trying  to  make sure  that they  can                                                               
afford to go to college -  not just that their tuition is somehow                                                               
taken care of.                                                                                                                  
                                                                                                                                
These programs  are designed to  go after  a myriad of  goals and                                                               
what  those goals  are needs  to  be determined.  There are  four                                                               
major  goals. One  is to  reward  those who  achieve the  highest                                                               
levels of  accomplishment. The  classic example  of this  was the                                                               
National Merit Scholarship  Program, which used to  provide a lot                                                               
of aid to  students who were in  the top 1 or 2  percent of their                                                               
graduating class in the country.  That program no longer provides                                                               
that kind of funding.                                                                                                           
                                                                                                                                
The second  goal is to  encourage students to prepare  better for                                                               
college.  A lot  of  provisions in  the  Governor's proposal  are                                                               
along  those  lines.   A  third  goal  is   to  increase  college                                                               
participation  rates overall  and the  fourth is  to attract  the                                                               
best and  brightest to  stay in  the state.  Those are  the goals                                                               
behind most of the merit based programs in the country.                                                                         
                                                                                                                                
3:04:03 PM                                                                                                                    
MR. LONGANECKER  addressed the question  first of how  well merit                                                               
programs  rewarding those  who achieve  the highest  levels work.                                                               
The answer is  "Well, it depends." Intuitively it  seems like the                                                               
programs  would do  great at  this  - students  are rewarded  for                                                               
doing extremely  well. And  if the program  is highly  focused as                                                               
the  National Merit  Scholarship  Program was,  it probably  does                                                               
provide something  in that regard.  If it is spread  too broadly,                                                               
it doesn't  work because those exceptional  students are thinking                                                               
they are  exceptional, but then  they see everybody  else getting                                                               
one. Therefore they don't really feel rewarded.                                                                                 
                                                                                                                                
Another problem is that the way  aid is packaged by financial aid                                                               
administrators  often diminishes  the impact  on the  very bright                                                               
students.  Many   of  the  states   with  which  he   works  have                                                               
foundations  that  provide  scholarships  to  the  best  and  the                                                               
brightest; so those  students are already getting  about the same                                                               
amount  of money  - just  from different  sources. At  that point                                                               
they feel pretty good about the  array of aid they got, but don't                                                               
see  any  particular   source  of  aid  as  the   lead  on  that,                                                               
particularly the  last dollar  in, which  is the  way the  GPS is                                                               
designed.                                                                                                                       
                                                                                                                                
The second question is how  well these work to encourage students                                                               
to better prepare for college.  Again the answer is "It depends."                                                               
But clearly,  encouraging them to  take a rigorous  curriculum is                                                               
the most  important thing to do.  It is much more  important than                                                               
encouraging them to get good  grades. A publication from the U.S.                                                               
Department  of Education  by  Cliff  Adelman provided  statistics                                                               
from the  high school  and beyond studies  that shows  what makes                                                               
the difference in  whether students succeed in college  is not so                                                               
much what  grades they  got, but whether  they took  a curriculum                                                               
that prepared  them for  college. ACT data  shows that  in effect                                                               
the skills  required to  get a  living wage  job today  without a                                                               
college education are essentially the  same as those required for                                                               
success in post secondary education. So  in fact it's to the best                                                               
interests  of  those  students  to  take  a  rigorous  curriculum                                                               
whether they are headed to college or not.                                                                                      
                                                                                                                                
3:07:21 PM                                                                                                                    
The  Georgia experience  is helpful  here,  because when  Georgia                                                               
HOPE was started it was all  based on grades, and the requirement                                                               
for remediation  actually went up,  not down. The reason  is that                                                               
students  quit taking  the rigorous  courses because  they needed                                                               
the high grades  to get the HOPE scholarship.  Mr. Adelman's work                                                               
shows that decent grades are important  - you have to do decently                                                               
- but  you don't  have to  get high grades.  Decent grades  and a                                                               
rigorous  curriculum  are  highly  related in  terms  of  student                                                               
success once  they go  to post secondary  education. The  idea of                                                               
requiring a  rigorous curriculum is very  important, particularly                                                               
for students from low income  families. An interesting detail, he                                                               
said,  is that  very smart  poor kids  are less  likely to  go to                                                               
college  and succeed  than very  modestly intellectually  endowed                                                               
rich kids.                                                                                                                      
                                                                                                                                
MR.  LONGANECKER said  the third  goal for  merit programs  is to                                                               
increase  participation  rates  overall  and  again  the  success                                                               
depends.  Nationally  research  indicates there  is  very  little                                                               
"price elasticity for demand" in  higher education except for low                                                               
income students.  That means that  middle income and  high income                                                               
students go  to college or  they don't irrespective of  the price                                                               
of going  to college  - that's  nationally. That  may not  be the                                                               
case in Alaska, because being "far  on the curve to the right" it                                                               
might not fit  the norm of the nation. Georgia  has some contrary                                                               
evidence which  sort of looks  like Alaska. They are  both states                                                               
where folks  don't go to  college, even middle income  folks. But                                                               
when  Georgia  instituted  Georgia   HOPE  they  increased  their                                                               
college participation  rate of recent high  school graduates from                                                               
30 percent  to 37 percent,  a pretty substantial increase.   More                                                               
able, low  income students and  some middle income  students went                                                               
to college.  That was made  up of three different  populations of                                                               
students;  one is  their more  able low  income students  went to                                                               
college. Some middle  income students who hadn't  gone to college                                                               
before went  to college,  but it didn't  change what  Zell Miller                                                               
had hoped for, which was a  change in the ethic of post secondary                                                               
education  in the  state. Thirty-seven  percent has  not gone  up                                                               
appreciably. The HOPE program had  a very substantial impact, but                                                               
not the one he had hoped for.                                                                                                   
                                                                                                                                
3:11:04 PM                                                                                                                    
There was  a similar  impact in  Nevada where  participation rate                                                               
went up  from 40 percent  to 47 percent.  That held for  a little                                                               
while,  but then  it started  to fall  back, in  a sort  of "halo                                                               
effect."                                                                                                                        
                                                                                                                                
3:11:56 PM                                                                                                                    
REPRESENTATIVE  GARDNER said  one of  the goals  of the  Hathaway                                                               
Program is to  build a more rigorous high school  kind of climate                                                               
where people are demanding higher  quality courses, where parents                                                               
are  trying to  get their  students to  engage in  those courses.                                                               
Georgia or Nevada have any success in that area?                                                                                
                                                                                                                                
MR. LONGANECKER  answered that Georgia successfully  reversed its                                                               
problem  of  "lowering remediation"  after  it  put in  the  core                                                               
curriculum requirement.  Nevada's Millennium  Scholarship Program                                                               
did  not  have  a  strong  connection  between  the  high  school                                                               
curriculum  and  going  on  to college;  it  didn't  work  there.                                                               
Louisiana's  Taylor Plan  has the  lowest  continuation rates  in                                                               
college of any  state in the South. But Louisiana  just adopted a                                                               
core   curriculum;   so   he  is   expecting   that   to   change                                                               
substantially.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  KELLER asked  if remediation  is the  criteria he                                                               
used to measure.                                                                                                                
                                                                                                                                
MR. LONGANECKER  responded that it  is one indicator, but  he was                                                               
using  it as  an  example of  what can  happen  as an  unintended                                                               
consequence. The better indicators  are whether students complete                                                               
their college  education. Most of the  evidence is if you  give a                                                               
harder curriculum, students achieve at higher levels. He said:                                                                  
                                                                                                                                
     We have  a sort  of crisis of  low expectations  in our                                                                    
     country  -   worrying  that   if  we   actually  expect                                                                    
     something  from our  high  school  students, they  will                                                                    
     fail -  when, in  fact, all  of the -  most all  of the                                                                    
     evidence the  only contrary evidence  is in  Texas, but                                                                    
     virtually every  other state  has shown  that students,                                                                    
     when you  imposed higher expectations  on them,  a much                                                                    
     larger   share,    particularly   of    students   from                                                                    
     economically disadvantaged families, do better.                                                                            
                                                                                                                                
3:14:49 PM                                                                                                                    
[CO-CHAIR THOMAS handed the gavel over to CHAIR SEATON.]                                                                        
                                                                                                                                
3:14:54 PM                                                                                                                    
REPRESENTATIVE KELLER  asked how  the engagement of  the students                                                               
is measured.                                                                                                                    
                                                                                                                                
3:15:35 PM                                                                                                                    
MR.  LONGANECKER  replied  that  would  be  answered  within  his                                                               
comments as he moves along.                                                                                                     
                                                                                                                                
He said the fourth objective in  some of the states is to attract                                                               
some of  the best  and brightest  to stay  in the  state. Without                                                               
doubt that  was part of  the goal in  Georgia and Nevada.  If the                                                               
goal  is to  keep them  in  state in  college, it  appears to  be                                                               
fairly successful  - at  least at first.  Oklahoma said  it would                                                               
give every  National Merit Scholarship semi-finalist  a full ride                                                               
to  the  University  of  Oklahoma.   Well,  they  got  a  lot  of                                                               
Oklahomans  and others  to come  to  Oklahoma and  they now  rank                                                               
something like  third or  fourth behind Harvard  and a  couple of                                                               
others in  the share  of their  National Merit  Scholarships semi                                                               
finalists who  stayed in state.  But that was a  huge inducement!                                                               
They  were given  tuition  and housing.  These  students were  as                                                               
highly prized as football players.                                                                                              
                                                                                                                                
It worked  well in  Georgia. Before Georgia  HOPE, 23  percent of                                                               
high  SAT  students  stayed  in  state;  afterwards,  75  percent                                                               
stayed.  They  were losing  a  lot  of  their students  to  South                                                               
Carolina  and Florida.  As the  reputation of  the University  of                                                               
Georgia  improved   with  these   programs,  they   clearly  have                                                               
attracted  a  much  larger  share  to stay  in  state  and  South                                                               
Carolina and Florida suffered.                                                                                                  
                                                                                                                                
Nevada's evidence wasn't nearly  as favorable. Before Millennium,                                                               
59 percent of the students who  would have been eligible if there                                                               
had been a program stayed in  the state; afterwards it went up to                                                               
63  percent. And  since implementation  it  has actually  dropped                                                               
below the  previous figure  - below 59  percent according  to the                                                               
Chancellor's office.                                                                                                            
                                                                                                                                
So in terms  of attracting students to go to  college in a state,                                                               
it probably  works and would  probably work pretty well  for some                                                               
of the students being lost presently.  But you need to ask if the                                                               
real goal is  to get them to  stay in college in the  state or to                                                               
stay  in the  state after  completing  college. That  story is  a                                                               
little more mixed.                                                                                                              
                                                                                                                                
3:18:21 PM                                                                                                                    
The  National Bureau  of Economic  Research has  a working  paper                                                               
that  shows that  there  is only  a  modest relationship  between                                                               
where  a student  at the  baccalaureate-and-above level  gets his                                                               
education  and where  he  ends  up working.  In  fact, it's  much                                                               
stronger at the associate degree level and below.                                                                               
                                                                                                                                
He said they  could maybe look at another strategy,  which is try                                                               
to  attract  students  back afterward  post  secondary  education                                                               
rather  than  worrying so  much  about  whether  they go  out  to                                                               
another state  to get it. He  is intrigued by a  program in South                                                               
Dakota  called "Dakota  Roots" where  they  actually contact  the                                                               
students who  left after a while  and tell them how  good life is                                                               
in South  Dakota. They  even have an  advertisement on  TV during                                                               
the holidays  when kids  come home for  Christmas that  shows the                                                               
house and  car you can buy  for what you  can get a hovel  for in                                                               
Los  Angeles,  Denver  or  Seattle,  which  is  where  all  their                                                               
students have  gone. They will  actually arrange  five interviews                                                               
for jobs if they agree to come back.                                                                                            
                                                                                                                                
MR. LONGANECKER  next discussed if  this makes sense in  terms of                                                               
the investment.  It is  clear that  "you pay a  lot for  a modest                                                               
impact." But  it may be  worth it in a  variety of ways.  Most of                                                               
the  people who  will receive  this award  were going  to college                                                               
anyway and most  were going to go to college  in Alaska. However,                                                               
it  does  increase  the  affordability for  the  most  needy  who                                                               
qualify for merit  as well. In Georgia, for  example, currently a                                                               
lot of  people who  love need based  financial aid  complain that                                                               
this program does  not help needy students. Today  the program is                                                               
around  $300 million  and  around  $50 million  of  that goes  to                                                               
students with assessed financial need.  But Georgia didn't have a                                                               
need based  program before; so  now $50 million is  available for                                                               
needy  students.   That's  comparatively  few  compared   to  the                                                               
distribution of students of the  Taylor Plan, the TOPS program in                                                               
Louisiana, where 40 percent of  the funding goes to students from                                                               
families with  incomes over  $100,000 - and  Louisiana is  a poor                                                               
state. About 10 percent of the  Hathaway Plan goes to students in                                                               
the need based  component. So, the funds  are disproportionate to                                                               
those  from incomes  that go  up  the income  strata rather  than                                                               
down. It does reduce the burden  for all of the others, and there                                                               
is nothing  wrong with reducing  the burden of going  to college,                                                               
but it doesn't really increase their financial access.                                                                          
                                                                                                                                
REPRESENTATIVE  GARDNER  asked  how  it reduces  the  burden  for                                                               
others.                                                                                                                         
                                                                                                                                
MR.  LONGANECKER answered  that  it simply  reduces  the cost  of                                                               
going  to college,  unless they  were going  to get  it from  one                                                               
source  of aid  or another.  In most  cases, particularly  in the                                                               
context she  referred to,  if they  get a  couple of  thousand or                                                               
something  approaching  tuition,  that  reduces  their  financial                                                               
burden.                                                                                                                         
                                                                                                                                
He cautioned,  "You want to  beware of  unintended consequences."                                                               
To the  credit of the folks  in Alaska, they had  thought of some                                                               
of them, but not  all. One is the effect on  price or on tuition.                                                               
This  has gone  different ways  in different  states. In  Georgia                                                               
where  the universities  set the  tuition rates,  once this  went                                                               
into  effect,  tuition  skyrocketed at  the  major  universities.                                                               
Because at both  the University of Georgia and  the Georgia Tech,                                                               
almost  all students  were HOPE  scholarship recipients;  so they                                                               
could  pass virtually  all the  costs on  to the  state -  a very                                                               
rational   way  for   the  institutions   to  respond.   So  that                                                               
constrained  the  amount that  the  other  institutions, many  of                                                               
which serve broader  access goals, were able to do  in the way of                                                               
tuition, because they could pass it on to all of their students.                                                                
                                                                                                                                
In Louisiana  the legislature sets  the tuition, and it  has kept                                                               
tuition rates extremely  low. They have done this at  a time when                                                               
they've also  not had a  lot of resources;  so they have  to keep                                                               
their  state   appropriation  very   low.  So,   Louisiana  State                                                               
University is  starving for  funds. It  is a  research university                                                               
operating  on  far  less  funding  than  necessary  to  manage  a                                                               
research  university. If  they increase  tuition there,  it would                                                               
substantially increase the cost of the TOPS program.                                                                            
                                                                                                                                
3:26:09 PM                                                                                                                    
West  Virginia and  New  Mexico fund  their  merit based  program                                                               
through the state lottery. They  figured that students were being                                                               
taken care  of by the  merit program, so  they cut back  on their                                                               
need  based program.  In  both programs  the  need based  program                                                               
suffered at  the expense of  the merit based program  even though                                                               
it wasn't their original intent.                                                                                                
                                                                                                                                
MR. LONGENACKER  said that was not  the case in most  states with                                                               
merit  programs, because  most of  those didn't  have need  based                                                               
programs of any consequence anyway.                                                                                             
                                                                                                                                
3:28:30 PM                                                                                                                    
MR.  LONGANECKER  reminded  them   that  these  programs  exclude                                                               
essential  students  from  the future  of  the  state's  economic                                                               
development. To  complete the President's  goal of  returning the                                                               
U.S. to  being a  leader in  the world, we  can't get  there with                                                               
high  school graduates,  alone he  said. Adults  also have  to be                                                               
brought back  into the higher  education arena. He stated  that a                                                               
single program  should not try to  serve all needs, but  this GPS                                                               
program  doesn't provide  much  of an  avenue  for adults  coming                                                               
back,  for  military  and  veterans unless  they  signed  up  for                                                               
eligibility within six months of  graduating from high school, or                                                               
for late  achievers. They also  need to be careful  that whatever                                                               
they structure, that  they don't leave "a whole  bunch of federal                                                               
funding on  the table."  Most students  are eligible  for federal                                                               
tax  credits for  their tuition,  but if  they don't  pay tuition                                                               
they don't get the federal  tax credit. Ms. Barrans mentioned the                                                               
way to get around  this is to use language saying  it can be used                                                               
for any education expenses. This  kind of language will avoid the                                                               
federal problem.                                                                                                                
                                                                                                                                
3:29:53 PM                                                                                                                    
REPRESENTATIVE  GARDNER  asked  who  has offered  a  merit  based                                                               
program that doesn't leave federal tax credits on the table.                                                                    
                                                                                                                                
MR. LONGANECKER  answered that Nevada  made changes  that brought                                                               
them  into full  compliance, Hawaii  changed its  tuition voucher                                                               
program,  and Washington  was in  compliance but  they eliminated                                                               
their merit program. New Mexico  redesigned theirs so they are in                                                               
compliance.                                                                                                                     
                                                                                                                                
3:30:57 PM                                                                                                                    
MR. LONGANECKER turned  to the issue of need-based  programs.  He                                                               
said  the original  purpose of  these programs,  particularly the                                                               
ones that  grew out of  the Great  Society programs of  the 1960s                                                               
was to  expand access  to higher education.  The U.S.  was moving                                                               
from  a meritocratic  system  to an  egalitarian  system, one  in                                                               
which every  student who could  benefit from some  post secondary                                                               
education and could qualify for it  should benefit and be able to                                                               
choose the institution that best served their needs.                                                                            
                                                                                                                                
The more  recent thrust started  in about the 1990s  and expanded                                                               
the concept from  access to success. First it  was thought access                                                               
was a  goal -  if people  could go  to college  they would  get a                                                               
college education.  But it was  discovered that many who  went to                                                               
college  dropped  out.  Huge  increases   in  the  percentage  of                                                               
students going  to college were  seen, but not huge  increases in                                                               
the  share of  students  graduating from  college. So,  something                                                               
different was needed. The programs  that have evolved in the last                                                               
decade have been focused on student success as much as access.                                                                  
                                                                                                                                
How do  need based programs measure  up on the goal  of expanding                                                               
access?   Actually,  Mr.   Longanecker  said   they  were   quite                                                               
successful. The  price elasticity of  demand studies show  that a                                                               
change  in price  for  low income  students  will increase  their                                                               
participation in college  from 5-10 percent per  $1,000 change in                                                               
price.  So if  you  give a  needy  student a  $3,000-scholarship,                                                               
you're going  to substantially change  the probability  that that                                                               
student  will go  to college.  That research  goes back  into the                                                               
late 1960s and through the 70s and 80s.                                                                                         
                                                                                                                                
However,  he  said,  "We  have   been  much  less  successful  in                                                               
achieving student  success." Students  have been brought  in, but                                                               
the  dropout  rates  have  increased.  They  have  increased  the                                                               
success of low income students and  students of color, but not as                                                               
fast  as the  success  of  middle and  high  income students  has                                                               
increased. So, the gap has  actually increased. He said that even                                                               
though they  got better  in every  category slightly,  the equity                                                               
gaps remain huge  in American higher education  between the haves                                                               
and the have nots.                                                                                                              
                                                                                                                                
The other  dilemma with these  programs is  that they are  not as                                                               
politically popular.  Poor people don't  tend to vote as  much as                                                               
middle and  higher income folks.  When Zell Miller came  out with                                                               
the HOPE  Scholarship in Georgia,  all the other  southern states                                                               
came out  with HOPE-like  programs within  two years.  "These are                                                               
politically popular programs."                                                                                                  
                                                                                                                                
3:34:57 PM                                                                                                                    
MR.  LONGANECKER  said the  need  based  programs had  some  real                                                               
problems even  thought they achieved  part of the goal;  they had                                                               
the unintended  consequence of not  getting the  students through                                                               
the  college. So  over the  last 20  years blended  programs have                                                               
evolved and  these come in three  variations:  one is  those that                                                               
are  merit programs  that add  on  a need  component, another  is                                                               
those that are basically need based  programs that add on a merit                                                               
component, and those that are truly a blended of the two.                                                                       
                                                                                                                                
MR. LONGANECKER said the first is  the need based being add on to                                                               
the merit  based. Wyoming's Hathaway  scholars program is  a good                                                               
example  of  this.  To  qualify  you  have  to  take  a  rigorous                                                               
curriculum, you  need to achieve  a certain composite of  the GPA                                                               
and ACT. They  have three different levels up to  $3,200 per year                                                               
and you need to maintain a  specific GPS while you are in college                                                               
to  maintain eligibility  for the  award. All  qualified students                                                               
receive an  initial scholarship regardless  of whether  they have                                                               
any need  or not. Needy  students get  a supplement as  well, but                                                               
they have to qualify for the  scholarship first. So, it's a merit                                                               
program with a need based component tacked on.                                                                                  
                                                                                                                                
Many  of  these  strong  components   are  embedded  in  the  GPS                                                               
proposal. The strength of that  program is that it rewards strong                                                               
preparation  and  assists  with affordability  for  the  neediest                                                               
students. Even though  for many years cost was thought  to be the                                                               
barrier  to  higher  education,   but  research  has  shown  that                                                               
preparation is as key to success  in college as finances are, and                                                               
maybe more so.                                                                                                                  
                                                                                                                                
The other thing he liked about the  Hathaway Plan is that it is a                                                               
fixed amount  not dependent  on the  actual tuition  amounts, and                                                               
since  it is  based  on  the cost  of  tuition,  he presumed  the                                                               
students  who  attend the  community  colleges  which have  lower                                                               
tuition actually come out a little  bit ahead. So there is a cost                                                               
of choice  and it  seems to  make sense  that students  should be                                                               
making a decision  on where they go  in part on the  basis of the                                                               
cost.                                                                                                                           
                                                                                                                                
MR. LONGANECKER  also said  he liked the  fact that  the Hathaway                                                               
Program is funded  by a trust fund approach and  does not rely on                                                               
annual appropriations  that many  things do.  The other  thing he                                                               
likes is  that it  fits Wyoming  well; it  fits the  culture. The                                                               
limitations  of it  are two-fold  - that  it's available  (as the                                                               
proposed GPS)  only for  those students  who are  graduating from                                                               
high  school and  who  fit this  criteria. So  it  is limited  to                                                               
Wyoming high school graduates of the present era.                                                                               
                                                                                                                                
3:39:41 PM                                                                                                                    
MR. LONGANECKER said  the second kind of merit is  merit added on                                                               
to  need. The  best  examples of  this come  out  of the  federal                                                               
legislation -  the academic competitiveness grants  and the SMART                                                               
grants  (part of  the  Pell grant  program  today). The  academic                                                               
competitiveness grants  provide Pell grant recipients  who took a                                                               
rigorous curriculum in high school  get an additional $750 tacked                                                               
on in their first year and  $1,300 in the second year. The reason                                                               
- at the federal  level - for the increase in  the second year is                                                               
they see that  most students who drop out of  college drop out in                                                               
the first year  and they are trying to provide  some incentive to                                                               
keep them into the second year.                                                                                                 
                                                                                                                                
The  second  program is  the  National  Science and  Math  Access                                                               
Program (SMART)  for juniors or  seniors which is a  $4,000 grant                                                               
that is  tacked on  to the Pell  grant. If you  are a  Pell grant                                                               
recipient majoring  in the stem fields  and you have a  3.0 grade                                                               
point or  above, you  get a  SMART grant.  The strengths  of this                                                               
program  are that  it  rewards students  for  preparing well  for                                                               
college; it encourages  students to major in an  area of national                                                               
need and  it is focused  on those students  most underrepresented                                                               
in the desired fields. This  program has some limitations; one is                                                               
that is excludes students from  high schools that don't offer the                                                               
rigorous  curriculum. The  other is  that it  is not  permanently                                                               
authorized so  the program's sustainability  is in  question and,                                                               
in fact, it is not proposed in the budget for next year.                                                                        
                                                                                                                                
3:42:21 PM                                                                                                                    
MR. LONGANECKER said the third type  is the ones that blend merit                                                               
and need.  These programs  include non  separable merit  and need                                                               
components - both have to  be demonstrated. The standard programs                                                               
in this regard  are the ones that come out  of Indiana called the                                                               
Twenty-first  Century  Scholars  Program   and  the  one  out  of                                                               
Oklahoma called  the Oklahoma Promise Scholarship.  Each of these                                                               
essentially  say if  a student  takes a  rigorous curriculum  and                                                               
achieves  at  a reasonable  level  (2.5  in  Indiana and  3.0  in                                                               
Oklahoma)  they will  have  an  award equal  to  tuition for  the                                                               
period of  time that they go  to college. Those programs  seem to                                                               
have changed the thrust of  the high school activities; they seem                                                               
to have  a real impact  on what the  high schools offer  and what                                                               
the students  take and  how well prepared  they come  to college.                                                               
They  also require  that students  have  assessed financial  need                                                               
using a family income cut off of $50,000.                                                                                       
                                                                                                                                
The program  that he is  particularly keen on is  patterned after                                                               
one in  Minnesota called "Shared  Responsibility," and  he helped                                                               
set it up  in Oregon. Minnesota has a real  philosophy behind its                                                               
program that involves the total  expense of going to college, not                                                               
just  the tuition.  It  varies  from a  two-year  to a  four-year                                                               
institution because  while tuition might  be less at  a community                                                               
college the  other expenses will  be the  same as if  the student                                                               
goes to a  four year college. This model looks  at those students                                                               
and  has four  partners. The  first  partner they  expect is  the                                                               
student  who   is  the  principal  beneficiary.   When  Minnesota                                                               
surveyed its residents, they said  everybody should go to college                                                               
but they ought to pay their  way through college like I did. Most                                                               
people don't  fully understand  that there is  no way  they could                                                               
pay  their way  through college  today.  So they  said the  first                                                               
partner who  is going to benefit  most from this is  the student.                                                               
So  they said  is the  student who  goes to  a community  college                                                               
ought to be able  to pay for that while going to  work 10 hours a                                                               
week and working  summers, and that would  be their contribution.                                                               
They used  10 hours  a week  because research  shows if  you work                                                               
more than 20  hours a week it reduces your  likelihood of success                                                               
in college. If a student went  to a state university that is more                                                               
expensive, he should be willing to take out loans.                                                                              
                                                                                                                                
So the four-year college amount  was based on the student working                                                               
that same  amount and  then borrowing an  amount that  they could                                                               
reasonably pay  back if  they went  into a  low paying  job, like                                                               
teaching and social work.                                                                                                       
                                                                                                                                
What is  interesting about the  Oregon program and what  could be                                                               
key for a  blended program for Alaska is basing  the grant amount                                                               
on  work and  borrowing,  savings the  student  has saved  before                                                               
going to  college, or  it can come  from other  scholarships. The                                                               
benefit  of this  for Oregon's  philanthropic community  was that                                                               
their  dollars no  longer were  going to  be substituted  for the                                                               
state dollars.  If the state  gave the student a  scholarship, it                                                               
was going  to count  against his  share. So  they could  earn the                                                               
money  by working  or by  scholarship. He  suggested that  Alaska                                                               
could blend  the merit component into  a plan like this.  He said                                                               
in Oregon  this philosophy  is extended  to all  students whether                                                               
they have financial need or not.                                                                                                
                                                                                                                                
3:47:33 PM                                                                                                                    
The second  partner is the  parents and he has  portrayed parents                                                               
that don't have much in the  way of income. But for many students                                                               
this will fill up all of the  rest of what they need because they                                                               
may come from a family  with substantial wealth. But the argument                                                               
was that  even the student  from a  wealthy family should  make a                                                               
contribution  toward  their  education.  That is  where  the  GPS                                                               
scholarship component could go.                                                                                                 
                                                                                                                                
The  third partner  is to  bring in  everything that  the federal                                                               
government  was  going  to  provide  including  the  tuition  tax                                                               
credits and the Pell grants.  This is essentially identical for a                                                               
student  going to  a high  cost  and low  cost institution.  Then                                                               
their  philosophy was  a fourth  partner was  the state  and they                                                               
would fill in the difference.                                                                                                   
                                                                                                                                
He advised  that they need  to think  about whether the  state is                                                               
really prepared for  success and explained that  Oregon looked at                                                               
research  on price  elasticity  of demand  and  projected a  7-10                                                               
percent increase  in participation  rates. However, in  the first                                                               
year,  the increase  was 17  percent in  the universities  and 27                                                               
percent in the community colleges.  Oregon did not have the money                                                               
in the  appropriations to fund  this. They  came back and  in the                                                               
first year  they put all of  the money in and  then economics hit                                                               
Oregon pretty hard.  It's one of the four hardest  hit states and                                                               
they have had  to cut back and ration their  awards this year. So                                                               
the  success  of  the  program will  have  financial  impacts  on                                                               
demands for this program and on the universities in general.                                                                    
                                                                                                                                
3:49:57 PM                                                                                                                    
MR. LONGANECKER  next discussed what  is best for Alaska.  If the                                                               
goal is to  reward the best and the brightest,  merit is the best                                                               
approach,  but it  won't address  affordability.  It will  affect                                                               
where  students  go  to  college,  but not  whether  they  go  to                                                               
college. The evidence  may be different for Alaska  because it is                                                               
such a low  participation state over all - looking  a little more                                                               
like Georgia.                                                                                                                   
                                                                                                                                
If Alaska's goal is to retain  the best and brightest, merit is a                                                               
possible  approach,  but it  is  pretty  expensive. It  might  be                                                               
better to  try and  entice them  back after  they went  to school                                                               
somewhere else.  If the  goal is to  expand access  through lower                                                               
cost,  need based  will get  the students  in the  door, but  not                                                               
through it, and it doesn't  send the message about the importance                                                               
of working  hard to prepare for  college. If they want  access to                                                               
success  and that  is the  highest  priority, he  said a  blended                                                               
model may hold  the most promise - plus it's  more cost effective                                                               
than either a straight need based or straight merit.                                                                            
                                                                                                                                
REPRESENTATIVE GARDNER asked what he  would suggest if their only                                                               
goal was to increase rigor.                                                                                                     
                                                                                                                                
3:51:21 PM                                                                                                                    
MR. LONGANECKER  replied if  the intent is  to increase  rigor, a                                                               
merit  program is  the  way  to go.  But  he  thought they  could                                                               
achieve more  by doing a  blended program that covers  both rigor                                                               
and need, because you won't  get needy students with rigor alone.                                                               
He  said that  research doesn't  support Senator  Meyer's comment                                                               
that  plenty  of  scholarships  are  available.  Most  need-based                                                               
students have the greatest amount of  unmet need in almost all of                                                               
his calculations.   Ms. Barrans talked about  the current program                                                               
that  provides up  to $2,000,  which is  very similar  to a  need                                                               
based program that Louisiana started  last year to complement the                                                               
TOPS program. Students know that tuition  is not all they have to                                                               
pay; they know they will have room and board, as well.                                                                          
                                                                                                                                
3:53:07 PM                                                                                                                    
CO-CHAIR  MEYER  said  the  reason  he  supports  the  Governor's                                                               
program is if  someone is showing effort in school  with a C+ and                                                               
better  average,  they  are   accommodated  regardless  of  their                                                               
income.                                                                                                                         
                                                                                                                                
MR.  LONGENECKER agreed  and added  that is  the strength  of the                                                               
Hathaway  over the  TOPS  program,  which is  an  all or  nothing                                                               
program.                                                                                                                        
                                                                                                                                
CO-CHAIR MEYER asked  if he agreed that there is  merit to having                                                               
our children go off and see how  the Lower 48 lives, and then get                                                               
them back.                                                                                                                      
                                                                                                                                
MR. LONGANECKER said  they run the WUWI  program which encourages                                                               
interstate collaboration;  but of course he  thinks that exposure                                                               
to the rest of  the country is a valuable asset.  Kids get a good                                                               
education in Alaska  and most Alaskans would say  they wish their                                                               
kids  would  stay  home.  The  benefits of  a  program  like  the                                                               
Governor is  proposing are  that students  will be  preparing for                                                               
the University of Alaska, but it  will open up their horizons and                                                               
possibilities and  they will be  able to go other  places because                                                               
they'll be  much better  prepared. They will  be scoring  well on                                                               
the  WorkKeys and  be able  to  go in  the  trades and  a lot  of                                                               
occupational areas  that they're simply  not well prepared  to go                                                               
into today.                                                                                                                     
                                                                                                                                
3:57:16 PM                                                                                                                    
CO-CHAIR MEYER  said they  keep using  ACT as  a bench  mark, and                                                               
asked if SAT is the same.                                                                                                       
                                                                                                                                
MR. LONGANECKER replied pretty much,  but they originated on very                                                               
different  principles  and  he liked  the  rationale  behind  ACT                                                               
better  than  SAT, which  is  a  measure  of innate  ability  and                                                               
intelligence. ACT was based on achievement.                                                                                     
                                                                                                                                
3:57:51 PM                                                                                                                    
REPRESENTATIVE  GARDNER asked  if the  merit portion  of Oregon's                                                               
blended program  is a combination  of rigor, GPA  and independent                                                               
assessment or is it available to all high school graduates.                                                                     
                                                                                                                                
MR.  LONGANECKER  replied  that  Oregon does  not  have  a  merit                                                               
component.  It is  built that  way  so that  the foundations  and                                                               
institutions  would  fill  in  there.  Their  rationale  is  that                                                               
institutions  like to  give merit  aid; they  don't like  to give                                                               
need  based aid  - because  they  like to  get the  best and  the                                                               
brightest students.  They like  the UA  Scholars Program;  and in                                                               
fact,  there is  some redundancy  between that  and the  platinum                                                               
level in the  proposal. Oregon is not facing  the same statistics                                                               
as Alaska is; it doesn't have  as high a participation rate as it                                                               
would like,  but most of  the students graduate from  high school                                                               
and most of those go on to post secondary education.                                                                            
                                                                                                                                
If they are  trying to change the  ethic in the high  school in a                                                               
more substantial  way, there is nothing  wrong with intentionally                                                               
blending that in and having a  state component that would be part                                                               
of that. He  pointed out the danger  is if they tie  the grant to                                                               
tuition  at UAA  and UAF,  because  almost all  students will  be                                                               
eligible for this  scholarship at the gold or  platinum level and                                                               
that  will provide  pressure on  those  institutions to  increase                                                               
tuitions.  The way  Wyoming came  up with  $3,200 scholarship  is                                                               
because  tuition is  $3,200;  but it  is not  locked  in at  that                                                               
level. This  also makes  it easier to  defend legally  on federal                                                               
tax  issues. He  remarked  that  there was  a  lot of  redundancy                                                               
between the platinum level and  the University of Alaska Scholars                                                               
Program.                                                                                                                        
                                                                                                                                
4:01:33 PM                                                                                                                    
REPRESENTATIVE BUCH  asked about  other places  who tried  to win                                                               
back students after graduation by  using incentives like Alaska's                                                               
old forgiveness program.                                                                                                        
                                                                                                                                
MR.  LONGANECKER replied  that  no state  is  "buying back  their                                                               
talent." But  certain states will  forgive loans for  doctors and                                                               
lawyers, for example.   Most of those programs find  that about a                                                               
third  of the  people come  and  serve out  their obligation  and                                                               
leave, about  a third come  and serve their obligation  and stay,                                                               
and  about a  third "buy  out" their  obligation and  leave.   He                                                               
mentioned  that states  don't  have  all the  tools  it needs  to                                                               
follow up  on unpaid  obligations of those  who leave.  The state                                                               
would have to essentially run  a collection mechanism at the same                                                               
time. New Jersey did  that for a number of years,  but gave it up                                                               
about the same time Alaska did.                                                                                                 
                                                                                                                                
4:04:55 PM                                                                                                                    
MR. LONGANECKER  said he thinks there  is a lot that  can be done                                                               
subtly. One  possibility would  be to  provide a  more attractive                                                               
option to receive back those  students who go to graduate school.                                                               
The WICHE medical  program has a contract with  students to serve                                                               
two years for every year contract  they have with the state. They                                                               
found that 74  percent of those students return to  that state as                                                               
opposed  to  50  percent  for  those students  who  aren't  on  a                                                               
contract. You  can get  return on investment  for that,  but that                                                               
may be a  work place issue as  well as a work  force issue. There                                                               
needs to be  places for those people  to come back and  work.  He                                                               
was  interested in  seeing  how the  South  Dakota Roots  program                                                               
works over time.                                                                                                                
                                                                                                                                
4:07:04 PM                                                                                                                    
REPRESENTATIVE BUCH said part of  their obligation is to consider                                                               
the  fact  that  students  need  a  job.  So  it's  a  matter  of                                                               
economics. In  building these models  the end goal is  to improve                                                               
the economics of the state.                                                                                                     
                                                                                                                                
4:07:34 PM                                                                                                                    
SENATOR  OLSON  asked how  many  of  the  74 percent  of  medical                                                               
students  who come  back to  the state  are still  there 5  or 10                                                               
years later.                                                                                                                    
                                                                                                                                
MR. LONGANECKER didn't know the  answer to that. Within the WICHE                                                               
region  they  have a  very  strong  presence.  From his  time  in                                                               
Minnesota  that has  a federal  program  that encourages  doctors                                                               
with a  similar state loan  forgiveness he knows that  only about                                                               
half of those who came back stayed.                                                                                             
                                                                                                                                
SENATOR  OLSON asked  if he  is  familiar with  the M.D.  program                                                               
versus the D.O. program.                                                                                                        
                                                                                                                                
MR. LONGANECKER answered yes.                                                                                                   
                                                                                                                                
SENATOR OLSON  said he has  heard that  the D.O. program  is less                                                               
expensive and that  encourage medical students to go  to the D.O.                                                               
schools. Are  there any significant  differences in  their return                                                               
rates?                                                                                                                          
                                                                                                                                
MR. LONGANECKER  answered there seems  to be a much  larger share                                                               
of osteopathic  physicians who come  back to rural areas  than in                                                               
the standard allopathic medicine programs  - in part because they                                                               
don't have  areas of specialization.  The form of  education both                                                               
in terms of providing it and  receiving it is less expensive. The                                                               
best students still seem to prefer the M.D. route.                                                                              
                                                                                                                                
SENATOR  OLSON asked  how many  students in  a North  Dakota-type                                                               
program actually returned, because they  are facing the same type                                                               
of rural practice and doctor shortages Alaska has.                                                                              
                                                                                                                                
MR. LONGANECKER  replied he didn't  know the answer to  that, but                                                               
South Dakota  has a  lot of  students staying  in the  state; but                                                               
that is partly because the  South Dakota School of Medicine isn't                                                               
terribly highly thought  of elsewhere. The WAMI  program has some                                                               
pretty strong success with its clinical  sites and that is a good                                                               
way to  have students return.  Medicine and dentistry  are fairly                                                               
unique and  probably require a  different set of  strategies than                                                               
the  standard undergraduate  approach where  they could  think in                                                               
broader  terms and  look for  more standard  models than  in high                                                               
cost  programs.  Part  of  the  dilemma  with  medicine  is  that                                                               
opportunity  costs to  come in  to a  rural area  are huge.  They                                                               
might  need  to  think  about  much  different  ways  to  deliver                                                               
education,  but  he  is  very   impressed  with  the  way  Alaska                                                               
developed  capacity in  mental health  services  through a  "grow                                                               
your own building up professional  development model." He thought                                                               
it had potential in other areas for a rural state.                                                                              
                                                                                                                                
4:12:32 PM                                                                                                                    
CHAIR SEATON  mentioned that Alaska  has a unique tool  in trying                                                               
to win back  people and in two previous  legislatures they talked                                                               
about programs  for holding the PFD  in trust after two  years or                                                               
so  of allowable  absences for  students  in a  Masters or  Ph.D.                                                               
program.   They   could  get   those   back   checks  when   they                                                               
reestablished  their residence  here. He  asked for  data on  how                                                               
GPAs  coordinated  with success  rates.  He  wanted to  know  the                                                               
criteria they are using rewards future success.                                                                                 
                                                                                                                                
MR. LONGANECKER said  he would do the best he  could to pull that                                                               
together for  them, but  his sense  is that  they will  get their                                                               
biggest  bang for  the buck  from the  students who  just take  a                                                               
rigorous  curriculum  who wouldn't  have  before  and who  aren't                                                               
going to  be exceptional  performers. They  will be  just regular                                                               
folks who will  be much better prepared for college.  In terms of                                                               
rewarding, that's  where they would  have to be  comfortable with                                                               
the larger  awards, the platinum  level for instance,  farther up                                                               
the continuum. That  might keep some students in  state who would                                                               
have  gone  elsewhere,  and  it clearly  provides  a  reward  for                                                               
exceptional  students -  and there  is nothing  wrong with  that.                                                               
But  they have  to determine  how  valuable that  is compared  to                                                               
other focuses and how much that will cost the state.                                                                            
                                                                                                                                
The profile for future eligible  students could be drawn from the                                                               
Louisiana State University  where 92 percent of  the students are                                                               
TOPS eligible.  About 17 percent  of the students at  Baton Rouge                                                               
Community College  are TOPS  eligible. He  referenced a  graph by                                                               
John LeGuardy that looked at income distributions.                                                                              
                                                                                                                                
4:17:25 PM                                                                                                                    
CHAIR SEATON said  one of his concerns with the  Hathaway Plan is                                                               
that the profile of Alaska students  is similar to the profile of                                                               
the two-year  "outside" college students  - and only less  than 5                                                               
percent of  those students in  those two-year  colleges qualified                                                               
for the need based portion.                                                                                                     
                                                                                                                                
MR. LONGANECKER agreed that something  was "screwy" with the need                                                               
component there that  he would have to figure  out. It's possible                                                               
that  the  Pell  grant  is   making  their  need  based  students                                                               
ineligible for  the need  component of  Hathaway. He  would share                                                               
that information when he figured it out.                                                                                        
                                                                                                                                
CHAIR SEATON  said the  Alaska Scholars Program  is based  on the                                                               
top  10  percent  of  each  graduating class,  and  he  wanted  a                                                               
comparison of  what increase in  participation would be  for this                                                               
program versus that one.                                                                                                        
                                                                                                                                
MR.  LONGANECKER said  he would  work  with them  on that  issue.                                                               
Texas has  a 10  percent scholars program,  but the  real problem                                                               
with the GPA and the  assessment is if students actually achieved                                                               
at a higher level it would cost the state a lot of money. That                                                                  
would be a nice problem to have, though, he mused.                                                                              
                                                                                                                                
4:21:48 PM                                                                                                                    
CHAIR SEATON said he thought the presentation had been helpful.                                                                 
Finding no further comments or questions the meeting was                                                                        
adjourned at 4:21 p.m.                                                                                                          

Document Name Date/Time Subjects
2008 Wyoming Hathaway Scholarship Report.pdf HEDC 11/24/2009 1:00:00 PM
11-24-09-Alaska.ppt HEDC 11/24/2009 1:00:00 PM
Governor's Performance Scholarship Q&A.docx HEDC 11/24/2009 1:00:00 PM
HSP Freshmen 200809.pdf HEDC 11/24/2009 1:00:00 PM
HSP Fall-09.pdf HEDC 11/24/2009 1:00:00 PM
HellerMeritImpact.pdf HEDC 11/24/2009 1:00:00 PM
hathway_rubric.pdf HEDC 11/24/2009 1:00:00 PM
Hathaway 2008-09.pdf HEDC 11/24/2009 1:00:00 PM
Hathaway 2007-08.pdf HEDC 11/24/2009 1:00:00 PM
FarrellMeritImpact (2).pdf HEDC 11/24/2009 1:00:00 PM
counselors_quick_ref.pdf HEDC 11/24/2009 1:00:00 PM
College Access Report 2007.pdf HEDC 11/24/2009 1:00:00 PM
HSP Juniors 200809.pdf HEDC 11/24/2009 1:00:00 PM
HSP Sophomores 200809.pdf HEDC 11/24/2009 1:00:00 PM
Merit-Need ACPE e-mail.docx HEDC 11/24/2009 1:00:00 PM
WPE-CACG-10-2009.pdf HEDC 11/24/2009 1:00:00 PM
Rep_Seaton_on_UA_Scholars.pdf HEDC 11/24/2009 1:00:00 PM