Testimony: Greater Investment in Financial Aid, Dec. 6, 2012

December 6, 2012

TESTIMONY by Richard Doherty, President, AICUM

Calling for a more accurate and predictable funding formula for public colleges and a greater investment

in state financial aid

Executive Office of Education

 

Secretary Reville, Commissioner Freeland, Commission Chester, Commissioner Killins, and members of the panel, I appreciate this opportunity to share some thoughts as you begin to prepare a budget recommendation for Governor Patrick’s FY14 budget.

 

My name is Richard Doherty and I am the President of the Association of Independent Colleges and Universities in Massachusetts (AICUM).  AICUM represents the interests of 60 independent colleges and universities throughout the Commonwealth, the 250,000 students attending those institutions and the nearly 100,000 people working at those institutions.  Our members include large nationally renowned research universities, smaller, highly regarded liberal arts colleges, religiously affiliated institutions, and colleges with special missions focused on business, music or allied health services.

I am delighted to be joined by Carly Finegan, a junior at Assumption College and a product of the Worcester schools, who will speak about the importance of state financial aid in her own college experience. I am proud to report to you that last year, AICUM member colleges and universities awarded $546 million in institutionally funded financial aid specifically to Massachusetts residents like Carly.

 

AICUM is pleased to serve on the Special Commission on Educational Scholarships, which was established in the FY12 budget, and we look forward to presenting our findings and recommendations to the Governor and Legislature by the end of this year.  We believe that the Commission’s report can serve as the starting point for a much needed discussion of the future of higher education and financial aid funding and the important role this sector plays in the economy and culture of the Commonwealth.

 

First and foremost, with regard to the FY14 budget, we urge the Governor to present a predictable, strategic and well-funded formula for the Commonwealth’s public higher ed system.  UMASS and entire public higher ed system is an essential part of the Commonwealth’s higher education constellation and we have long believed they need and deserve predictable and appropriate funding.  Without this, Presidents within the State system are left with the near impossible task of planning multi-year budgets and strategic master plans with an uncertain financial commitment from the state.

 

Second, as part of that higher education funding package, we urge that Governor Patrick make a significant investment to the Commonwealth’s need-based scholarship line-item: 7070-0065.  This line-item, which includes the essential need-based programs, CashGrant, MassGrant and Gilbert Matching Grant, has essentially been level funded for the past few budget cycles.  However, a closer look shows that a skyrocketing increase in students eligible for state aid has resulted in a substantial decrease in the buying power of the scholarship.  For example, the MassGrant program has seen a whopping 89 percent increase in eligible applicants during the last four years, which has resulted in an average award 40 percent less than it was in FY08.  This trend has left the Commonwealth significantly below the national average for student awards.

 

In fact, if Massachusetts simply appropriated for financial aid the same percentage of its higher education budget as the national average (12 percent of the higher ed budget going to financial aid), we would need to increase the scholarship program to $132 million.

 

Given the budgetary challenges highlighted in yesterday’s papers, we understand that achieving such an increase this year is unlikely.  However, we are asking that Governor Patrick commit to raising the scholarship line item to a level of $125 million, which would be closer, but still below, the national average that states invest in scholarship aid.  We recognize that this is a substantial request that will need to be phased in over a few budget cycles, but are confident that doing so is in the best interest of our students, colleges, businesses, and the Commonwealth.  This investment is also in line with Governor Patrick’s long-held belief that investing in higher education is a key element of the Commonwealth’s economic recovery.

 

Our member colleges and universities share a common desire with Governor Patrick to ensure that all students have the opportunity to attend the college of their choosing.  That is why our members make a substantial investment each year to Massachusetts students and their families through institutional grants and scholarships.  The $546 million in aid to Massachusetts students I referenced earlier represents a 59% increase in institutional aid since FY08.

 

Year over year, more than half of the Massachusetts high school graduates who go on to a 4-year college in Massachusetts do so at an AICUM college or university.  In fact, our members account for more than 70 percent of Bachelor of Arts degrees, and more than 85 percent of graduate degrees.  Our members are recognized as leaders in adapting to our changing economic needs and educating tomorrow’s workforce today.  In fact, approximately 2/3rds of the graduates at the B.A. level and above who stay in Massachusetts to join the workforce after graduation are graduates of our private colleges.

 

We appreciate the daunting task that Governor Patrick and you have in preparing a budget given the still recovering economy and the difficult choices he had to make with the recent 9C cuts.  However, we believe that the Administration can, and indeed should, make a strong statement by investing in need-based financial aid.  There is no greater need in higher education than providing opportunity to those talented students desiring, but unable to afford, a quality education.  A properly funded financial aid program will send the right message to hard working students that the Commonwealth supports them and wants them to reach their full potential.

 

Again, I thank you for the opportunity to testify before you today and am happy to answer any questions that you may have.