HB 397-POSTSECONDARY SCHOLARSHIPS [Contains discussion of HB 403.] 4:48:01 PM CHAIR WILSON announced that the next order of business would be HOUSE BILL NO. 397, "An Act creating a postsecondary scholarship grant program for Alaska residents based on high achievement and financial need." [Testimony was heard on HOUSE BILL NO. 403, "An Act appropriating $100,000,000 to the Alaska achievers' scholarship fund; and providing for an effective date," although the bill was not formally before the committee.] 4:48:56 PM REPRESENTATIVE DAVID GUTTENBERG, Alaska State Legislature, introduced HB 397, as the prime sponsor. He informed the committee that the bill establishes an endowment to fund a combination needs-based and merit-based college scholarship program. Representative Guttenberg pointed out that Alaska ranks last in the U. S. in supplying this type of scholarship and it was a critical aspect of the legislature to assist residents with the ability to go to college. 4:50:54 PM WILLIAM ANDREWS, Member, Board of Regents, University of Alaska; Student, University of Alaska Southeast, stated his support for HB 397 and HB 403. Through his experience as a member of the Board of Regents and as a former legislative staffer, Mr. Andrews realized the importance of the services the legislature provides to the residents of the state. Furthermore, as a student, he realized that there is a growing population of students falling through the cracks due to their inability to meet the cost of tuition. These bills would help bridge the gap for students who can not afford to continue at the University of Alaska (UA). He opined that there was a discrepancy between the affluence of the state and the lack of scholarship programs. Existing scholarship programs are not increased with rising costs, and students who need scholarships to complete their educations are disenfranchised. Mr. Andrews advocated for the need to support students who have the potential to develop the Alaska work force. He concluded that the accountability aspect of this fund requires successful academic performance, on behalf of the student, to continue to receive financial aid. 4:55:57 PM REPRESENTATIVE ROSES asked how Mr. Andrews is paying for college. MR. ANDREWS stated that he is receiving scholarship funding through various Native corporations. In addition, he receives about $300 per month through the G. I. bill, and found additional funding through the Preparing Indigenous Teachers and Administrators for Alaska's Schools (PITAAS) scholarship. 4:57:56 PM REPRESENTATIVE ROSES recounted his college experience attending a private school, and how he paid for his education. The education was dear to him because he had to pay every cent; however, some students do not take personal responsibility in paying for their educations. Representative Roses pointed out that students today have scholarships and the Permanent Fund Dividend (PFD) to help pay for college. 5:00:11 PM MR. ANDREWS noted that his PFD was not available to him until he was 18 years of age. He agreed that it is a resource now, but should not be considered as an entitlement available to pay for college into the future. Furthermore, he opined that the availability of the PFD has accounted for raises in tuition at the UA. 5:02:15 PM DIANE BARRANS, Executive Director, Postsecondary Education Commission, Department of Education and Early Development, informed the committee that there was a clear unmet need for needs-based aid for students. The additional element of merit is laudable; however, the goal of the Postsecondary Education Commission is to assist those with the greatest need. She said that these funds would be administered in conjunction with existing programs and indicated that there would be a sizable demand for the scholarships. 5:03:40 PM REPRESENTATIVE CISSNA recalled that Alaska ranks last in the achievement of bachelor's degrees. She asked Ms. Barrans to comment. 5:04:52 PM MS. BARRANS stated that incentives and information need to be provided to students and their families. Academic preparation and ability, and the ability to pay tuition, are critical for students to successfully complete their studies and obtain a degree. In Alaska, fewer than one in six college students complete their higher education in a timely manner, one barrier being the accumulated debt. 5:06:53 PM REPRESENTATIVE SEATON asked whether there should be a limit on the number of years an applicant was eligible for a scholarship. MS. BARRANS advised that amendments have been prepared to address this issue. 5:07:56 PM REPRESENTATIVE ROSES asked whether Ms. Barrans' office is responsible for managing the portion of PFD funds that are dedicated for college. MS. BARRANS said no. The PFD allotment is managed through the UA. 5:08:34 PM REPRESENTATIVE ROSES expressed his interest in how many people choose to dedicate funds for education. This is another example of removing an individual's responsibility to provide for his or her education. He then asked whether there is a limit in the amount of student loans given per year by the Postsecondary Education Commission. 5:09:33 PM MS. BARRANS said that the limit, per student, per year, is $8,500. The total loan volume last year was $85 million. REPRESENTATIVE ROSES further asked whether there were qualified students who did not receive funds. MS. BARRANS recalled that qualified applicants have not been denied funds since 1987. REPRESENTATIVE ROSES observed that an applicant that qualifies for this scholarship would also qualify for a student loan. MS. BARRANS explained that all of the students would need to combine grant aid with loans from various sources. A small minority of students would be able to pay for their education, which costs about $17,000 per year at a public institution, solely with grants or scholarships. The committee took an at-ease from 5:10:48 PM to 5:11:46 PM. 5:11:51 PM CHAIR WILSON explained the procedure for public testimony. 5:13:00 PM REPRESENTATIVE ROSES opined that the bill allows scholarships to "qualifying postsecondary institutions in the state" and may apply to students attending trade and vocational schools, or working under an apprenticeship. 5:13:42 PM MS. BARRANS clarified that the eligible institutions must be regionally or nationally accredited, and located in Alaska. 5:14:16 PM REPRESENTATIVE GARDNER asked whether union apprenticeships charge tuition. MS. BARRANS opined that they do not. 5:14:49 PM REPRESENTATIVE SEATON asked for a list of the qualified schools. 5:15:08 PM ANNAMARIA DICOLA, Student, University of Alaska, stated her support for HB 397 and HB 403. She pointed out that the non- traditional students in Homer are focused on career development and this program would help to meet the state's workforce need. 5:16:39 PM JOHN ROBERSON III, Student Body President, University of Anchorage, asked for the committee's help in assisting Alaskans to achieve their academic goals. He recalled the recent legislation to give incentives to outside businesses that come to Alaska; in fact, HB 397 and HB 403 would give incentives for students to stay in Alaska and improve the state's workforce. Mr. Roberson stressed the importance of keeping students in the state so that they will stay and work here. 5:18:57 PM RYAN BUCHHOLDT, Student, University of Alaska Anchorage, stated his support for HB 397 and HB 403 and echoed the sentiments of the previous witness. To pay for school he works a full-time job and lives with family. Mr. Bucholdt opined that this incentive would help prevent future students from leaving the state. In response to questions from Representative Roses, he said that he carried 12 credits and works full-time. 5:20:43 PM MISTY M. GIL MARTINEZ, Student, University of Alaska Fairbanks, stated that she is a wife, the mother of three, a full-time student, and an employee. She reviewed her highly successful high school history and stated that she did not attend college due to financial constraints. Ten years later she began college to improve her employment opportunities. Ms. Gil Martinez spoke of her financial difficulties and the effect full-time employment had on her grade point average. She opined that financial aid relieves stress and facilitates learning. She concluded that funding for education will improve Alaska in many ways. 5:24:34 PM MEREDITH CAMERON, Student, University of Alaska Fairbanks, stated her support for HB 397, paraphrasing from a prepared statement, which read as follows [original punctuation provided] As a resident of Fairbanks, a student of the University of Alaska Fairbanks and an Alaskan, I would like to express my support for the Alaska Achievers Incentive Program (AAIP) [HB 397 and HB 403]. This program is our first step towards college affordability and increased student success. Higher education should be a top priority to our state, as we are the future of Alaska. Through this program those who have the grades and skills will be able to think about attending University without needing to think about the money. For graduating high school grads the cost of a higher education is the most important topic discussed by the student and the family. It is a shame that students do not move on to higher learning because of the cost. The AAIP looks to provide assistance to these students who have a 3.0 High School GPA and meet financial aid standards. As a Junior here at the University of Alaska and a high school graduate of West Valley, I have seen way too many of my fellow students drop out of college because they cannot afford it. They did not leave because their classes were too hard, or they felt they were not getting a steller education, it was because they could not afford the rising costs. No sutdent should be forced to work 40 hours a week to stgruggle to pay for the 12 credits they now are struggling in because they are too busy working. Our students of Alaska high schools deserve more. They need to know that some [one] out [there] cares and worries about the rising cost of tuition. We have a very successful merit based scholarship, the UA Scholars, now it is time for a needs ased scholarship. I have never seen a group of students more passion [ate] about a need. Here at the University of Alaska Fairbanks, the Associated Students of UAF have finally stood up and demanded an equal opportunity for the students of Alaska. There were many sleepless nights, pouring over thousands of pages of material and reports, and dialogue with students, staff, and administrator. In the end they achieved something that they were told was impossible. A House Bill No. 397 now sits in committee that would start an endowment to provide scholarships on a merit and needs based system. The great state of Alaska and the nation thrive on our higher education institutions. The University of Alaska engages the community, provides a skilled labor force, and builds a stronger state. As your voting constituent I urge [you] to please support bill number 397 and open up the future of many young Alaskans. 5:26:12 PM REPRESENTATIVE GARDNER asked whether Ms. Cameron held a job and was working over spring break. MS. CAMERON said yes. 5:26:46 PM REPRESENTATIVE FAIRCLOUGH asked all of the students if they know the source of the state grant money. MS. CAMERON indicated that the money comes from oil. REPRESENTATIVE FAIRCLOUGH explained the struggle of policy makers who must consider approving benefits to some who may not support the industry that provides 90 percent of the state's revenue. Conversations with students have indicated that they, and perhaps the university system, do not support development of the Pebble Mine or oil exploration in the Chukchi Sea. However, she pointed out that resource development is the source of income that would fund this $100 million grant. Representative Fairclough observed that there should be support for the revenue stream from those who receive benefits. 5:29:46 PM CHAIR WILSON supported Representative Fairclough's point. 5:30:01 PM REPRESENTATIVE CISSNA asked whether the students have ideas on how to diversify Alaska's source of revenue. 5:30:51 PM DAVID CHILDERS, Student, University of Alaska Anchorage, remarked that students in Alaska can look to economic opportunities, outside of resource development, and explore them through the university. However; the university does not have the capability to provide scholarships for needs-based students or to compete with other states that provide up to $4,000 per year to support low income students. The diversity of Alaska's economic base may depend on UA graduates developing the future resources in technology, the Internet, or in construction. REPRESENTATIVE ROSES asked whether the $4,000 provided to students in other states is a grant or a loan. MR. CHILDERS answered that the Supplemental Educational Opportunity Grant funds grants in the amount of $2,000 to $4,000. 5:34:51 PM REPRESENTATIVE ROSES suggested that the state greatly increase the amount of the student loan program and add a work incentive for those who stay in the state. MR. CHILDERS opined that the increased debt burden would prevent graduates from investing in their community for many years. REPRESENTATIVE ROSES advised that a loan program would have a source of future income that may support the program after declining oil revenues can not. 5:37:09 PM REPRESENTATIVE KELLER noted that funds for the program may be limited. He asked whether the preference would be to needs- based, or merit-based, scholars in that case. 5:37:55 PM MR. CHILDERS pointed out that the UA Scholars Program is available to support students on a merit only basis. However, HB 397 incorporates need-based and merit-based qualifications in a sustainable scholarship endowment system. In fact, a 5 percent to 10 percent investment return on the endowment would mean $5 million to $10 million available for scholarships. 5:39:16 PM REPRESENTATIVE KELLER surmised that the $100 million endowment would take care of the needs-based applicants. MR. CHILDERS related statistics by the financial aid office at the University of Alaska Anchorage that indicated that $3 million would be sufficient to allow UA Anchorage to assist its needs-based applicants. He further opined that $10 million would be sufficient for the statewide university system. 5:40:35 PM MARY GOWER, Director, Enrollment Services, University of Alaska Fairbanks, recalled that Alaska is ranked 51st in the nation for supplying need-based aid for education. She stressed the need for additional need-based grant aid and pointed out that the existing need-based programs are modest programs with limited resources. 5:41:56 PM REPRESENTATIVE ROSES asked Ms. Gower for the average yearly enrollment of the statewide university system. MS. GOWEN indicated that enrollment was about 33,000 full-time and part-time students. REPRESENTATIVE ROSES observed that 5 percent of the endowment, or about $8 million, would only help 1,600 of the students each year. MS. GOWAN pointed out that the university is awarding approximately $102 million in financial aid each year, a portion of which is loan aid. In addition, $13.1 million is distributed as need-based grants and students continue to drop out due to financial problems. 5:43:47 PM DELIGHT KENNEDY, Student, University of Alaska Fairbanks, stated that she is representing students from the past and the present, and from rural and urban communities. She pointed out that only twenty-seven percent of enrollees graduate in six years; in fact, the highest percentage drop out for family and financial reasons. Ms. Kennedy related her personal experience regarding family financial responsibilities. She continued to point out that many current enrollees are working full-time, which detracts from their academic success, and the existing financial aid programs are inadequate. For example, at her urban high school, the top 10 percent of the class had a grade point average of 4.2. She concluded that an investment in Alaskan students is an investment in Alaska. 5:47:04 PM CHRISTOPHER STEFANOVICH, Student, University of Alaska Anchorage, provided statistics that indicated how an increase in tuition effects enrollment at the university. He urged the committee to support the bills. 5:49:02 PM JAKE HAMBURG, President, Student Body, University of Alaska Fairbanks, stated that he was representing nine thousand students. He paraphrasing from a prepared statement, which read as follows [original punctuation provided]: I am a University of Alaska Fairbanks student who began his UA education at Kenai Peninsula College in Soldotna. I work approximately 56 ours per week both as UAF's student body president and as a weekend sales associate while also attending class fulltime. I cannot afford to work any less due to rent, inevitable car repairs, fuel, tuition, and books. I do not shy away from hard work but paying for my college education is increasingly placing a strain upon my ability to successfully complete by degree. As UAF's student body president, this [is] a common experience I hear from many of the students and groups that I have met with. I have met far too many students who have been forced to drop out because they could not personally fund their education. I know from speaking with many other students around the state that they are working long hours to make ends meet while trying to also finish their homework and attend classes. Students know how important a college education is to their future and so they work incredible hours and burden themselves with debt. The state of Alaska's employers are craving more university graduates and addressing the affordability issues plaguing students and their families will go a long way toward meeting that need. We know from existing research that a $1,000 reduction in the cost of a college education can boost enrollment by nine percent. We also know that a $160 increase in the cost of attendance can drop undergraduate enrollment by .5 percent and community college enrollment by 2.3 percent. A survey performed by the University of Alaska Southeast found that the number two reason why students were dropping out was because they couldn't afford to continue their education. The number one reason was family problems. For students approaching their high school graduation, the cost of a higher education is the most important topic discussed by the student and the family. It is unfortunate that students do not move on to higher learning because of the cost. It has also been shown that the growing cost of an education is changing the perception of affordability among our elementary and middle school students and their parents. It is at these ages that students really decide whether college is something attainable for themselves. There is some good new. The state has an opportunity to support a student-led effort to provide scholarships to those students who demonstrate academic merit and financial need. In the interest of thousands of students from all ages and regions around this state, it is my sincere hope that you will support HB 397 and HB 403. 5:50:12 PM CASEY MELIAH, Student, University of Alaska Anchorage, informed the committee that he is a freshman enrolled at UA Anchorage and HB 397 and HB 403 would allow him to better pursue his studies to be a firefighter and paramedic. He explained that he will need to exceed the recommended 20 hour work week to cover his college expenses. 5:51:48 PM CHAIR WILSON asked whether Mr. Meliah plans to stay in Alaska to work. MR. MELIAH said yes. 5:52:16 PM DANIEL SWISHER, Student, University of Alaska Fairbanks, expressed his concern that the committee was unaware that the cost of tuition is just one part of the cost of an education. He noted that fees are rising as fast, or faster, than tuition. Mr. Swisher opined that the bill proposes a one time funding that will be sustained as an endowment. Furthermore, the return on the endowment would fit with the other existing programs to assist students. 5:54:01 PM CHAIR WILSON thanked those who have been waiting to testify since 3:00 p.m. 5:54:35 PM SETH HOLTSHOUSER, Student, University of Alaska Anchorage, said that he is a life-long Alaskan. He expressed his belief that individual responsibility is the same as the state's responsibility to develop and cultivate future human resources through its own citizens. The Alaska Achievers' Incentive Scholarship Program [(AAIP)] endorses the investment and the economic development of Alaska's workforce in future leaders and provides Alaskans greater access to the training, education, and resources of the universities across Alaska. He encouraged the state's policy makers to join other states in placing economic access to education as the top priority and responsibility for its citizens. Mr. Holtshouser concluded that this program is a crucial point in addressing student's needs, now and in the future, and to make a positive impact on the state. 5:56:44 PM REPRESENTATIVE ROSES asked whether Mr. Holtshouser saved his PFD for college. 5:56:58 PM MR. HOLTSHOUSER noted that, after the age of 18, he chose to use his PFD to offset student loans. In response to a question, Mr. Holtshouser said that he was a sophomore. 5:59:08 PM JOSEPH HICKMAN, Director, Student Support Services, University of Alaska Fairbanks (UAF), explained that he was a low-income and high achieving student at UAF. Although he qualified for many scholarship and loan programs, and worked full-time, he graduated with $50,000 of student loan debt. He opined that this bill would relieve students of much of that kind of loan debt. He listed statistics that indicated the level of support for low income students provided by other states. Mr. Hickman acknowledged that this program is not going to fix the entire problem, but it is a small step. 6:01:34 PM REPRESENTATIVE ROSES asked whether, in his capacity as the Director of Student Support Services, Mr. Hickman assisted students to get loans, grants, and scholarships. MR. HICKMAN indicated that his position is funded by the U. S. Department of Education that supports low-income students with grants, computers, and tutoring. REPRESENTATIVE ROSES further asked whether there is one area that is a clearing house for available scholarships. MR. HICKMAN said no. His office searches for possibilities and provides the information to the student. REPRESENTATIVE ROSES then asked whether all of the scholarships are distributed each year. MR. HICKMAN said yes. He added that his program is able to award only one-half of the applications received. Furthermore, the successful applicants are required to apply for UAF scholarships as well. In response to a question, Mr. Hickman stated that the loans and scholarships are available to all UAF students. 6:03:14 PM ANDY ANGAIAK, Director, Upward Bound Program, University of Alaska Fairbanks, informed the committee that Upward Bound is a federal program, funded through the U. S. Department of Education, which was created by the War on Poverty initiatives of the 1960's. Its purpose is to encourage low-income high school students to graduate and enter programs of higher education. Mr. Angaiak said that Upward Bound serves 13 Alaska high schools and he provided statistics on the Upward Bound program. 6:05:37 PM MELANIE K. LEYDON, Student, University of Alaska Anchorage (UAA), informed the committee that she was a freshman at UAA and works part-time. She shared her future plans for a career in Alaska. Ms. Leydon said that she was speaking for herself and her siblings as they are receiving no financial assistance from their parents to pay for college. She asked for the committee to assist the future leaders of Alaska. 6:07:05 PM REPRESENTATIVE GARDNER asked for the reason Ms. Leydon does not receive financial support from her parents. MS. LEYDON explained that it is a financial reason. REPRESENTATIVE GARDNER asked whether her parents are college educated. MS. LEYDON said no. 6:07:50 PM REPRESENTATIVE ROSES asked Ms. Leydon whether she had acquired any student debt. MS. LEYDON, in response to questions, answered that she works part-time to pay cash for school, lives at home, and works at a real estate office full-time in the summer. 6:09:21 PM KEVIN TURNBOUGH, Representative, Upward Bound, University of Alaska Fairbanks, addressed the issue of need-based students who leave the state for their education. He explained that for every Pell grant student that comes in to the state for higher education, five to seven Pell grant students leave. He gave examples of Upward Bound high school students who have successfully completed high school under difficult circumstances. These students need and deserve additional support in order to attend college. Mr. Turnbough stressed that the state needs to do more for students coming from low-income backgrounds so that they can better their lives through higher education. 6:13:53 PM REPRESENTATIVE ROSES asked whether granting a scholarship would guarantee that the student would stay in the state. MR. TURNBOUGH said that there is no guarantee, but it would increase the likelihood. His personal experience was that students feel a commitment to their state; however, they do not want to graduate with student debt. 6:15:25 PM DANA L. THOMAS, Professor of Statistics; Assistant Provost for General Studies, University of Alaska Fairbanks, stated that he was raised and educated in Alaska and expressed his support for the bill[s]. To answer the question of whether students should work, his data indicates that more UAF students work in excess of 20 hours per week and attend school part-time than in other states. National research shows that these students attain degrees at a significantly lower rate, and in a greater length of time, than full-time students. In his own experience, Mr. Thomas was able to work part-time and pay for college; however, the evidence is clear that, at the cost of education today, that is not possible. He pointed out that, at UAF, when student's reach a debt of about $10,000 in loans, they tend to drop out. Lastly, he related that the Postsecondary Education Commission distributed financial aid to 579 students whose family annual income was less than $15,000. 6:18:20 PM LINDSEY FORREST, President, Student Government, University of Alaska Southeast, stated her support for HB 397 and HB 403, paraphrasing from a prepared statement, which read as follows [original punctuation provided]: I am the President of the UAS Student Government. I am the Speaker Pro-Tem for the Coalition of Student Leaders. I am a senior with one moreyear to go before I graduate at UAS with a BLA in English Literature and a minor in Law. I wear many caps but the one that I wear today is that of a student in financial need. I work seven days a week, either at one of my two jobs, or both, as the President of the Student Body, which is a full time job in itself, or on school work, which is another full time job. However, as a representative of the students at UAS it is my duty to inform you that there area a number of my own constituents who would benefit greatly from the passing of HB 397y and 403 as they currently exist. As a representative of the Coalition of Student Leaders it is my duty to inform youthat a vast majority of the constituents of my colleagues would benefit hugely from the passing of HB 397 and 403 as brought to you by the members of this Legislative body and the members of the Coalition of Studen Leaders. As a member of this jury it is yourduty to deliberate and express you[r] decision on the inception of HB 397 and 403. However, it is also your duty as state representatives to be concerned with the financial well-being of your students attending post-secondary educational institutes in Alaska. It is you[r] duty as a state representative to be concerned with the welfare of the future of this great state. Ladies and gentlemen of this jury the students before you today and the students whose voices do not bet [to] be heard are the future of this state, a bright future indeed, and it is your duty to provide for us the means to be the growth you wish us to be, we cannot do it all on our own. Give us another avenue to seek financial aid from, give us the means to attend college and further our dreams, you will not [be] disappointed at the outcome nor the caliber of students that will graduate and remain in this great state of Alaska that we want ... to call home. Thank you all for your support for the students of the University of Alaska, your support for higher education and your support for making Alaska a better state and better home. 6:21:17 PM REPRESENTATIVE ROSES spoke of the other needs in the state, such as programs to support the mentally ill or senior care. He pointed out the difficult choice between funding a student grant program or replacing federal funds for the Department of Health and Social Services. He asked whether a student loan program, with incentives to benefit students who stay and work in Alaska after graduation, would be more effective than a grant in growing Alaska's workforce. MS. FORREST responded that she was unsure; however, she opined that supporting the state's future leaders can not be detrimental to the state. REPRESENTATIVE ROSES said he is not necessarily against a grant, but all of the options around this issue should be explored. He described his personal experience during his college years and assured those attending college now that the committee has an understanding of their situation. 6:26:54 PM REPRESENTATIVE CISSNA pointed out that, without a state income tax, Alaska residents have a disassociation with state government. In addition, Alaska does not produce a sufficient number of professionals and must pay a high price to bring people in, especially in the fields of health and education. She opined that HB 397 and HB 403 will entice graduates to stay in the state. Representative Cissna asked Ms. Forrest whether a large, or a smaller, debt after graduation will keep graduates in Alaska. MS. FORREST responded that a student with a smaller debt would be more willing to stay in Alaska because entry level jobs pay less here. Her experience is that students can go to school and live more cheaply in other states, thus graduating with less debt. Ms. Forrest shared her personal plan to leave Alaska after graduation. 6:31:59 PM CHAIR WILSON related a personal history of education and repaying school loans. She then reminded the witnesses of the source of the state's wealth. 6:34:38 PM REPRESENTATIVE SEATON spoke regarding the "brain drain" and how students who go outside to college choose spouses and jobs during their time at college and stay outside. If legislators want people to stay in Alaska, the legislature needs to help them graduate from college in Alaska. He expressed his frustration at funding the senior bonus instead of programs that will keep young people in Alaska and free from the limitations of large amounts of debt. Representative Seaton stated that it is good policy to provide a program that requires students to maintain a high level of academic achievement and he indicated his support for the bill. 6:39:03 PM CHAIR WILSON closed public testimony. 6:39:12 PM [HB 397 was held over.]