Cost and Financing

Much attention has been placed on academic standards, state assessments, teacher training and effective leadership in schools. All are vital to preparing students for college and careers.  But if there is no avenue to get students to higher education and no structure or means to assist students, many will end up in low-wage jobs for life. This interactive session addressed how public/private partnerships and legislative strategies can serve as the catalyst for a culture change that will ensure students reach their goal of college completion and degree attainment.

In 2009, about 25,000 Minnesotans took advantage of one of the five tuition-reciprocity deals the state has with neighboring jurisdictions. These agreements allow residents to attend out-of-state colleges at the rates of comparable home-state institutions. Keeping these additional college options open to students requires states to coordinate and cooperate with one another, and this year, Minnesota and Wisconsin were able to strike a deal that will allow their long-standing reciprocity program to continue.

As college costs rise, and with many household incomes stagnant, students have become increasingly reliant on the various forms of tuition assistance available to them, including state grant aid.

The recently agreed upon debt ceiling deal which aims to cut nearly $2 trillion in spending will affect graduate students who have chosen to fund their higher education through federal student loans.

Business and industry have always relied on policies and programs that ensure young people receive a high-quality education. That relationship has become symbiotic as state and local school officials become increasingly dependent on outside funding sources. In return, corporate America expects improved K-12 and postsecondary schools to provide a better educated and trained workforce.

Public universities are under increased pressure to produce more high-quality degrees, even as state funding for postsecondary education tightens. Consequently, some state policymakers and education think tanks are giving performance-based funding a closer look.

Maryland became the 12th state in the country to allow illegal immigrants living within its borders to attend colleges and universities at in-state prices when Gov. Martin O’Malley signed Senate Bill 167 in early May.

Americans understand the value of a college education and have continued to prepare financially for the costs of post-secondary schooling even as the economy has slowed. Almost every state in the South offers parents an opportunity to save for college through Section 529 programs, tax-preferred accounts named after the section of the tax code created by the IRS to authorize their special treatment under federal law. These programs take the form of prepaid tuition plans which allow participants to “lock in” current tuition at state schools college savings plans structured investments designed to realize gains in excess of tuition increases under normal circumstances.

In recent years, both types of Section 529 plans have faltered, due to a poor investment climate and rising tuition. When most programs were instituted, there was an unfailing optimism in the potential for the stock market to continue to expand and create returns that would outstrip any increase in tuition which historically ranged below 5 percent, making the extension of this state guarantee a risk of a presumably remote nature. As tuition skyrocketed and the stock market failed, however, states have been forced to reconsider the guarantee extended to prepaid tuition plans, and college savings plans are not keeping up with rising costs. This SLC Regional Resource offers a look at recent trends and events on state section 529 plans within the SLC member states.  

University of Oregon (UO) President Richard Lariviere has unveiled a plan that would result in a radical new model in funding for his university which he believes will catapult it, financially anyway, toward the head of its class.

States aren’t waiting for reauthorization of the federal education law to find ways to boost academic achievement and student success. That education reform effort has already started and will continue in 2011. Despite delays at the national level, states are implementing a variety of strategies and initiatives to ensure students are prepared for the future. State legislatures will play an important role in preparing students for college and a career. States will tackle policy positions to implement common academic standards, close continuing achievement gaps, adequately prepare future teachers and find dollars to fund public education.

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