AN ANALYSIS OF THE TUITION ASSISTANCE PROGRAM

Transcription

1 The State University of New York AN ANALYSIS OF THE TUITION ASSISTANCE PROGRAM Prepared by the State University of New York In Fulfillment of Requirements Set Forth in Chapter 260 of the Laws of 2011

2 An Analysis of the Tuition Assistance Program TABLE OF CONTENTS I. Affordability at SUNY...3 II. The Current Tuition Assistance Program...5 III. Analysis of the Tuition Assistance Program...5 A. Analysis of increasing the maximum TAP award to meet public college tuition...6 B. Analysis of the continuation of the Tuition Assistance Credit...6 C. TAP award calculation formulas Analysis of the TAP income calculation formula Analysis of the Expected Family Contribution Calculation...9 D. Analysis of the definition of financial independence...9 E. Analysis of TAP award schedules...10 F. Current TAP eligibility criteria Analysis of citizenship eligibility Analysis of the ability to benefit requirement Analysis of residency requirements for TAP...11 G. Analysis of other policies related to TAP Financial aid for part-time study Financial aid for remedial study Pre-TAP remedial study pilot Analysis of removing restrictions from STAP Analysis of scholarship opportunities Analysis of the consistency and stability of TAP support...16 Analysis of the TAP uppercut...16 Analysis of the 18-month lag in payment for accelerated study...16 Analysis of an additional semester of TAP durational eligibility Analysis of TAP regulations Appendix A - College Affordability in New York State: Previous New York State Student Aid Reports Appendix B - TAP Analysis Charts Chart 1: Historical Comparison of Public College Tuition and Maximum TAP Awards Chart 2: Estimated TAP Recipients and Expenditures...21 Chart 3: Analysis of Five-year Phased-in TAP s...22 Chart 4: Five-year Analysis of Tuition Credit Extension and TAP s Appendix C - TAP Award Schedules through the Academic Year... 24

3 An Analysis of the Tuition Assistance Program Pursuant to Chapter 260 of the Laws of 2011, the Board of Trustees of State University of New York (SUNY) was tasked with examining the Tuition Assistance Program (TAP). 1 The legislation requires that SUNY undertake a comprehensive analysis of the program. Thus, the following statutorily mandated 2 areas were examined: Costs associated with pursuing a degree in undergraduate study; TAP award levels and program thresholds; TAP award schedules (calculation formulas); and Eligibility criteria. 3 I. Affordability at SUNY SUNY s top priority is ensuring that all New Yorkers have access to top-quality public higher education that they can afford. Thanks to the leadership of Governor Cuomo and the Legislature, our five-year rational tuition policy, which took effect in the fall of 2011, allows our students and their families to plan for the cost of the college in its entirety. Even with the annual increases enabled by 1 The legislation requires the report be submitted to the Governor, the temporary president of the senate, the speaker of the Assembly, the director of the Division of the Budget, the Senate Finance committee, the Assembly Ways and Means committee, and the Higher Education committees of the legislature. 2 Chapter 260 of the Laws of 2011 states: The State University Trustees shall conduct a study regarding the effectiveness and functionality of the New York State Tuition Assistance Program, which shall consider a variety of factors including, but not limited to, the costs associated with pursuing a degree in undergraduate study, current tuition assistance program thresholds and award levels, current eligibility criteria to qualify for an award under the tuition assistance program, and any other information the trustees determine to be relevant. The study shall also include recommendations to improve the tuition assistance program to better meet the future financial aid needs of students and to ensure continued access and affordability of the State University of New York. 3 In addition, the following related areas were examined: financial aid for part-time study; financial aid for remedial study; scholarship opportunities; consistency of TAP funding; and, review of statutes and regulations for clarity and accuracy. 3

4 the policy, SUNY tuition is the least expensive of any public institution in the Northeast and in the bottom quartile nationally. 4 SUNY s track record of leadership in this area attracted U.S. President Barack Obama to launch his higher education affordability campaign from two of our university centers: Buffalo and Binghamton. The five-year rational tuition policy required that SUNY provide a tuition credit to cover the gap between TAP and tuition. SUNY has reinvested 27.8 percent of resident undergraduate rational tuition revenue to help cover cost for students at the maximum TAP level. We provided $10.7M to cover the tuition credit in its initial year, and SUNY is projected to invest a total of $175M in the tuition credit through In the first year of this policy alone, we reinvested in students by creating 326 new jobs, 192 of those in the faculty area. We have also committed our campuses to being better stewards of tuition dollars through a shared services campaign that will move at least $100M in administrative costs to instruction and student services over five years. The typical cost of attendance 6 (including all expected expenses) for SUNY colleges and universities for students who live on campus is $22,700 per year for the academic year. The most significant difference between the cost of attendance and public and independent colleges is tuition, which at private institutions in New York currently averages $35,000. TAP helps students pay for tuition and most of the neediest students who receive TAP also receive a federal Pell Grant. Currently, the maximum Pell Grant is $5,645 and can be applied to room & board and other costs. Currently, TAP and Pell provide the neediest students with $10,645. The remaining gap is often filled by federal and private student loans. Though SUNY will continue to find efficiencies to maintain affordability for students, the tuition credit is a unique burden on public colleges. Students at most of New York s independent colleges face a much bigger TAP/tuition gap, and those institutions are not mandated to provide a tuition credit. 4 Based on the Trends in College Pricing report by The College Board (2012) 5 SUNY students at state-operated campuses and community colleges represent 40 percent of the total number of TAP recipients across the state. Over $318M of the $920M program total is awarded to SUNY students annually. As outlined in Chart 2 in Appendix B, SUNY has the highest number of TAP recipients of all sectors. 6 The cost of college attendance includes tuition, fees, room and board, books and other related supplies, personal expenses, and transportation. The cost of attendance is a combination of costs paid directly to a college (for example: tuition and fees) and indirect costs (for example: personal expenses and transportation), which vary based on individual lifestyle choices such as choosing to live on or off campus, or with parents. 4

5 II. The Current Tuition Assistance Program New York State s Tuition Assistance Program (TAP) helps eligible New York residents pay tuition at public and approved independent schools in New York State. New York State residents who are full-time undergraduate students enrolled in an eligible program at an institution within the state currently receive annual awards ranging from $500 to $5,000 or tuition, whichever is less. TAP awards are based on the family s New York State net taxable income. If more than one member of the family is attending an approved post- secondary educational institution on a full-time basis, the net taxable income figure is reduced. Undergraduate students may receive TAP for four years of full-time study. Students enrolled in approved five-year programs or in state-sponsored opportunity programs may receive undergraduate aid for up to five years. III. Analysis of the Tuition Assistance Program SUNY conducted a comprehensive review of TAP and analyzed various data and resources. Research was conducted on the current methodologies used for the calculation of federal Pell Grant awards and TAP, and the two were compared. In addition, we reviewed Department of Health and Human Services poverty level charts to better understand their use in determining eligibility and aid amounts for other social programs. SUNY also reviewed research sponsored by the College Board, the Institute for Research on Poverty, and others. The role of poverty and financial aid in the enrollment and success of students, and the role of financial aid in the persistence of enrollment as well as graduation rates are difficult to assess. However, research continues on many levels to determine if and how need-based financial aid can be used to increase academic success. The SUNY Board of Trustees was required to analyze current TAP thresholds, award levels, and eligibility criteria and other options for consideration by policymakers. Given the economic challenges facing the state, we have provided cost estimates for proposals, so policymakers have the relevant facts and figures when making determinations related to TAP. While there are a number of ways to enhance the program, given the current economic situation in New York, the unstated imperative would be to make the proposals as cost effective as possible while maintaining the integrity of this vital program. 5

6 A. Analysis of increasing the maximum TAP award to meet public college tuition Currently, SUNY resident undergraduate tuition is $5,870 (plus a $25 college fee) and the maximum TAP award is $5,000. Tuition for the neediest students is supplemented by an additional $895 under NYSUNY 2020 s tuition credit program. Some tuition credit is given to all SUNY students who receive TAP based upon income, with higher-income students receiving 10 percent of the difference between $5,000 and the SUNY tuition charged for the relevant academic year. When the SUNY tuition credit sunsets at the end of the academic year, there will be a $1,495 gap between the maximum TAP award and SUNY tuition. Several options for increasing the maximum TAP award to meet public college tuition were analyzed for consideration by policymakers, all of which can be considered based on cost and other factors. The attached Chart 3 in Appendix B illustrates the TAP yearly increases if a phased-in approached were adopted. Consideration by policymakers of a phased-in approach would reduce the gap between TAP and tuition. This approach, coupled with a continuation of the SUNY tuition credit, will reduce the amount SUNY will need to expend for the tuition credit until the tuition/tap gap is closed. We also analyzed several different iterations. Students who are financially dependent on their parent(s) make up the majority of students who receive TAP. If the increase applies to these students, to students with children, and to married students, it would cost $172M after five years. If the increase applies to single independent students, it would cost $57M after five years. 7 Such students include some of the state s neediest, such as orphans, wards of the court, foster children, and adults who are returning to school. If the TAP income threshold is raised from $10,000 to $35,000 Net Taxable Income, the cost of increasing the maximum award will be less than $1M per year. B. Analysis of the continuation of the Tuition Assistance Credit The attached Chart 4 in Appendix B illustrates the effect a phased-in TAP increase will have on 7 The maximum award for these students has been $3,025 per year for over 20 years, which in 2015 will leave a $3,470 large tuition/tap gap for the neediest students. 6

7 the SUNY and CUNY Tuition Credit if continued beyond The TAP increases are incremental, not cumulative; as such they do not represent a cumulative cost, but rather the yearly increase in expenditures. As Chart 4 illustrates, the implementation of the TAP increase will reduce the amount of tuition credit SUNY has to provide from if the policy is continued. If there is no change to the TAP program and the tuition credit is extended, SUNY will contribute nearly $300M in tuition credits to TAP eligible students for the same time period. As the chart illustrates, if the TAP increase is enacted, there will be more than $200M available for SUNY to use for academic and other student experience enhancements. C. TAP award calculation formulas There are a number of ways in which TAP award calculation can be simplified or aligned with federal financial aid standards in order to make the application process easier for both students and financial aid professionals. 1. Analysis of the TAP income calculation formula Since the beginning of the program, TAP has defined income as New York State Net Taxable Income, which is a term no longer used by the Department of Taxation and Finance. 8 The current definition of income used in TAP calculations is complex. It is unlike any other definition of income used for financial aid purposes. The most common income definition is Federal Adjusted Gross Income (AGI), which is reported on all federal and state tax returns. Federal and New York State AGI are the same for the vast majority of TAP recipients. A simple and more understandable definition of TAP income should be considered for calculating awards. A simplified application process using Federal Gross Income in TAP calculations should also be considered. 8 The following statute explains the current TAP requirements for definition of income: Income shall be the total of the combined net taxable income and income from pensions of New York state, local governments, the federal government and any private employer of the applicant, the applicant s spouse, and the applicant s parents, including any pension and annuity income excluded for purposes of taxation pursuant to paragraph three-a of subsection (c) of section six hundred twelve of the tax law, as reported in New York state income tax returns for the calendar year next preceding the beginning of the school year for which application for assistance is made, except that any amount received by an applicant as a scholarship at an educational institution or as a fellowship grant, including the value of contributed services and accommodations, shall not be included within the definition of income for the purposes of this article. See Education Law, Art 14, Section

8 A formula for the new TAP income could use Federal Adjusted Gross Income (AGI) as a starting point. Federal AGI is used in financial aid formulas for the Pell Grant and for determining other federal financial aid eligibility. This concept of income is easily and generally understood. The differences between federal and New York State AGI are nonexistent or minimal for the vast majority of TAP recipients. A new TAP calculation could include subtractions for New York State itemized or standard deductions and a more family-friendly adjustment based on family size, as detailed below. The use of standard or itemized deductions is a current component of Next Taxable Income (NTI), as noted in the above section of statute. The following elements could be used to determine income for the TAP award calculation as a way of simplifying the process: 1. BASE - Federal Adjusted Gross Income as reported on federal or state tax returns 2. SUBTRACTION - New York State standard or itemized deductions as reported on New York State tax return. The following is a partial list of allowable and common deductions: i. Medical and dental expenses ii. Local real estate taxes iii. Mortgage interest iv. Charitable contributions v. Job-related expenses vi. College tuition reduction vii. Theft and losses viii. Unreimbursed business expenses 3. SUBTRACTION Family-friendly allowance for dependent family members Current allowances for family members are based upon state tax law exemption amounts of $1,000 for each child (or other allowed dependent); there is no exemption for the taxpayer or spouse. Therefore, the exemption amount for TAP and tax purposes for a typical family of four is currently $2,000. An allowance based on family size would result in higher TAP awards for larger families. New York Net Taxable Income used in TAP calculations does not reflect family size. Currently, a student from a family with a gross income of $41,000 with three children receives a TAP award only $240 greater than a family with the same income and only one child. 8 Our analysis found that this allowance, if made part of the income calculation, could better reflect a student and family s ability to contribute to college costs than the current system and would be easier to report in the application process. Family size can be determined using information reported on state and/or federal tax returns and with review by HESC and college officials.

9 A family-friendly allowance can supplant the existing other child in college deduction, which currently costs $6M annually. 9 Students and families can receive a higher TAP award from the family-friendly allowance than they would have with the other child in college deduction. In addition, the costs associated with the required verification of other family member enrollment will be eliminated. These administrative costs savings would be accrued at HESC as well as at the campuses. Since the amount of such an allowance has not been specified, the total cost is undetermined. 2. Analysis of the Expected Family Contribution Calculation The federal financial aid application system collects asset information and uses it to calculate the Expected Family Contribution (EFC), which in turn is used to calculate eligibility for federal student aid programs. New York s current award calculation methodology uses income as the only determinant of need. It is legal and appropriate for many citizens to report a low income on tax returns while having large assets in cash, securities, and real estate. Policymakers should consider, removing some of the inequalities in the process by capping TAP grants for students receiving federal Pell Grants at an amount between $1,000 and $2,000 per year or the calculated TAP award, whichever is lower. This way of including assets in the calculation of eligibility would result in savings of $15M annually while having no effect on a student s ability to afford college. D. Analysis of the definition of financial independence The definition of financial independence for federal financial aid purposes varies from that used in New York State for TAP. The main difference is the age at which students are assumed to be independent and the age at which students need to submit documentation in order to prove their independent status. These differences can be confusing to students. A change to the current definition for TAP would better align with both program goals and student needs. The following modifications to the New York State definition of financial independence would align it with federal requirements: Students over 22 and under 24 would need to meet the federal requirements for independence in addition to not being claimed on parents tax returns or included on 9 Currently, the other child in college provision allows a minimal deduction of $3,000 for the first other family member enrolled full-time study and $2,000 for additional family members. 9

10 parents health insurance. Students over 24 and not claimed on parents tax returns or included on parents health insurance would need to meet fewer requirements and those requirements would be changed and updated. E. Analysis of TAP award schedules Currently, there are seven TAP award schedules (Appendix C) for degree-granting colleges and eleven TAP award schedules overall. The award schedules are the formulas used to determine awards based on family income, family structure, and the type of institution the student is attending. In addition, several award schedules are tied to the initial year a student received TAP. For example, a student returning to a SUNY campus having first received TAP in the 1980s or 1990s would receive a significantly reduced TAP award compared to a student first receiving TAP in the 2000s. These schedules were initiated in order to limit annual TAP increases and do not reflect the financial needs of students. The current schedules are confusing for Financial Aid Professionals and can result in students receiving confusing or incorrect information about their TAP eligibility or anticipated award amount. SUNY analyzed the simplification of TAP schedules to only three schedules (or formulas) for TAP award calculation for students who attend degree-granting colleges. The following schedules are proposed: 1. Dependent students, who are generally under 22 years of age, single, and dependent upon their parents 2 Independent single students with no dependent children 3. Independent (married or single) with dependent child(ren) or married with no dependents If the number of award schedules was reduced, there would be a cost $3.5M due to some awards being raised as a result of some students being moved to different schedules. F. Current TAP eligibility criteria SUNY analyzed simplifying, updating, and clarifying TAP eligibility criteria relating to citizenship, Ability to Benefit (ATB) requirements, and New York State residency. 10

11 1. Analysis of citizenship eligibility Currently, the federal and state requirements for U.S. citizens and eligible non-citizens to receive financial aid are, in practice, virtually indistinguishable. If policymakers were to change the New York statute by automatically extending state financial aid eligibility to those who are granted federal financial aid eligibility would simplify the financial aid process for students and their families. There are no costs or savings associated with making this change to current statute and it would reduce the burden of program administration. 2. Analysis of the ability to benefit requirement Currently, students who do not have a high school diploma or students who have a high school diploma from a country outside the United States must pass a federally-approved ATB exam in order to receive TAP. Recent changes to federal financial aid requirements have removed ATB examinations as an allowable substitute for a high school diploma for federal financial aid eligibility, while New York still allows for the use of these examinations to determine eligibility for TAP. As a result of the federal policy change, some of the national testing companies that provided federally approved exams will cease doing so. As such, we analyzed options for adapting the New York State statute that calls for the use of the federally approved ATB exams. Substituting an acceptable grade from the SAT or ACT could be a simple solution for students that have already taken these exams. A change in statute could also be necessary to provide testing for students who did not take the SAT or ACT. As stated above, without a change, there will be no mechanism to determine ATB for those without high school diplomas, and eligible SUNY students may be denied TAP awards through no fault of their own. There is no cost associated with changing this requirement. 3. Analysis of residency requirements for TAP Currently, New York requires students to live for a minimum of one year in the state before they become eligible for TAP. A small, but undetermined savings in TAP and administrative costs could be achieved by changing the requirement so that students must live in New York for a minimum of 11

12 two years before they become eligible for TAP. Additionally, policymakers may consider a statutory change to include the term domicile as the equivalent of residency as the courts ruled in State v. Collins. 10 An extended timeframe for state residency and clarification of the definition of residency would reduce the administrative burden on campuses and HESC to verify questionable residency cases. G. Analysis of other policies related to TAP In our ongoing commitment to providing an affordable, high-quality education and revitalizing New York s workforce and economy, SUNY analyzed additional ways to ensure continued access and affordability. These include: financial aid for part-time study; financial aid for remedial study; scholarship opportunities; consistency and stability of TAP funding; and, review of statutes and regulations for clarity and accuracy. 1. Financial aid for part-time study Currently, there are two programs that provide financial aid to students who attend college part time. The first, Aid for Part Time Study Program (APTS), enacted in 1984, is a campus-based program that provides an annual allocation to participating campuses based on their prior year part-time enrollment figures. 11 For the past several years, an appropriation of $14.6M has been made for APTS. Schools receive their allocation amounts in the summer of each year, for the academic year beginning that fall. Eligible students are selected by campus staff, who also determine the amount of the award. This is different from TAP, which uses award schedules and income formulas to determine awards. The selection, award determination, and reporting for APTS are complex and manually intensive for both college and HESC staff. The other financial aid program for part-time students is the Part-Time Tuition Assistance Program, which was enacted in This program has strict eligibility requirements that make the award difficult to obtain. Currently, in order to receive TAP for part-time enrollment, students must first take courses on a full-time basis and meet other restrictive requirements. In the four years since the program was enacted, only 5,500 students have met the eligibility requirements. SUNY s large population of part-time students (105,000 part-time students at SUNY community 10 State v. Collins (3 Dept.1981) 78 AD 2d 295,435 N.Y.S. 2d See Education Law, Article 14 section See Education Law, Article 14 section 667c

13 colleges; 22,000 at state-operated campuses) could benefit from a credit-based approach to TAP funding. Students who only attend part time will never be eligible for the existing Part-time TAP program because they cannot meet the full-time requirement under current law. A credit-based part-time TAP award could bring aid opportunities in line with the real attendance habits and needs of SUNY students, many of whom work full-time jobs or raise families while earning degrees. An appropriation for this award with an estimated cost of $50M could be offset by the elimination of APTS, which would result in a net cost of $35.4M. This appropriation would provide a prorated payment for part-time students. 2. Financial aid for remedial study Currently, students can enroll for up to the equivalent of nine semester hours of remediation in their first full-time semester, along with a minimum of three semester hours of credit-bearing courses to receive a TAP award. In subsequent semesters, colleges can provide up to six semester hours of remediation per term, along with at least six semester hours of credit-bearing courses. While providing financial aid for remedial education is important to address the needs of New York s students, the current system of using TAP for remedial study is not cost effective: It is not cost effective for college professors to teach remedial courses Credit-bearing courses cost more than remedial courses to conduct TAP eligibility is limited to four years of study unless student is in an approved five-year program or in an approved remedial program, which are defined as Opportunity programs Students use TAP eligibility on remedial courses and thereafter may not be able to complete college within their term of TAP eligibility Most students who need remediation are not in approved remedial programs (Educational Opportunity Program (EOP), Higher Education Opportunity Program (HEOP), Search for Education, Elevation and Knowledge (SEEK), and College Discovery (CD)) due to cost constraints that limit enrollment. Because they are not in such programs, remedial students are only eligible for the usual eight semesters of TAP for a bachelor s degree or six semesters for an associate s degree. Many of these students will use a portion of their TAP eligibility on attaining pre-college skills. Currently, the TAP program pays colleges millions of dollars in tuition to provide a mixture of credit and non-credit courses to unprepared students who drop out after one or two semesters. A student can attend college for a full year and attempt as few as nine credits, and receive up to $5,000 for that academic year. This application of TAP funding would be better used for credit-bearing courses for students who are working towards completion. 13

14 SUNY analyzed two different alternatives to TAP funding for students who require remediation before beginning college-level coursework. The Pre-TAP remedial study pilot in Part 1 would require further research and development prior to implementation. Part 2 is an analysis of changing the Supplemental Tuition Assistance Program (STAP). 3. Pre-TAP remedial study pilot A Pre-TAP pilot program could be established to offer high-school graduates (or those with recognized equivalent) a way to attain the academic and study skills necessary to successfully complete college course work. Through this pilot, high school graduates who have been tested and need pre-college remediation would be eligible for two terms of full-time funding. Students could take remedial classes that equate to between six and fifteen credits and would be unable to take credit-bearing courses while participating in Pre-TAP. Colleges could be incentivized through payments received for successfully remediated students who either complete an associate s degree or transfer to a four-year college. Pre-TAP could be used in any initial term, including summer, which differs from TAP. TAP is not authorized for an initial summer term due to current TAP Accelerated Study laws. This pilot program would address the problem of poorly-prepared high school graduates as well as the challenges facing some first-generation college students. The issue is acute in New York City and some rural communities; national data suggests that 40 percent of all community college students require remediation. Recent data from SUNY indicates even higher rates of remediation. This five-year pilot program could provide a small administrative payment for colleges to provide teaching and advising for students needing remediation. Colleges would also be rewarded for helping students become successful in their college careers. 4. Analysis of removing restrictions from STAP The Supplemental Tuition Assistance Program (STAP) allows for additional year of aid of funding for students taking remedial courses. 13 Changing the language of the STAP statute in order to expand eligibility to all remedial students, Education Law, Art 14, Section 667a. Language from the STAP statute states: in order to further the goal of equal opportunity it is necessary to assure the availability of supplemental assistance for the successful remediation of educationally disadvantaged students in addition to assistance currently available under existing statute

15 regardless of term attended, and their participation in Opportunity Programs could benefit students. Since STAP is a separate program, it will also prevent students from using their TAP eligibility on remedial education. Only a handful of students receive STAP each year as a result of the statutory restrictions that make the program unavailable to students in Opportunity Programs and only available in summer terms. While these restrictions were likely imposed as cost-saving measures, they actually cost money students who could benefit from STAP end up receiving TAP, which provides much higher awards. Removing the restrictions from STAP would save as much as $10M annually, depending upon usage. 5. Analysis of scholarship opportunities Scholarship opportunities to keep our best high school students in-state and encourage New Yorkers to return to college and complete degrees can strengthen the state s workforce and economy. One of the main purposes of the existing Scholarship for Academic Excellence is creating a financial incentive for New York high school graduates to attend college in New York. However, the associated statute has no required timeframe for the notification of recipients. Students who receive the scholarship are notified prior to high school graduation, but often after most students have already made a decision about where to apply to and ultimately attend college. As a result, many of New York s most gifted high school students are notified too late of this financial award that could incentivize them to attend an in-state public college. Since the award is based upon performance completed by the end of the junior year of high school, the awards could be forwarded to the Commissioner of the State Education Department in time to notify students by the fall of their senior year. This early notification can enable students and parents to use this financial information to make informed decisions about college enrollment. In addition, the Scholarship for Academic Excellence is clearly an Academic Performance Award and is so described in Article 14 of Education Law. However, in the current numbering, the scholarship is not considered an Academic Performance Award in Article 13 and therefore is not governed by the State Education Commissioner s regulations concerning such awards. The numbering issue should be resolved so this scholarship is treated as all other Academic Performance Awards. Policymakers should consider a new scholarship program based on income and academic performance for students who have earned a substantial number of college credits in the past and return to college to complete their degree, therefore enhancing college completion in New York. This funding could be made available to students who have used all of their TAP eligibility or are not eligible for financial aid because they are not enrolled for enough credits during the semester. Students would have to be within 12 credits of graduation to be eligible. 15

16 Academic/testing/income requirements for the scholarship require further discussion. The cost of such a program would be minimal due to the narrow eligibility requirements, but the benefits for students who are close to completion would be far-reaching. Given the growing demands for degrees among New York s workforce, SUNY recognizes the importance of incentivizing college completion for those students who are only a few semesters away from completion. 6. Analysis of the consistency and stability of TAP support SUNY is committed to successful college completion and believes that reliable TAP funding is important for students long-term financial planning. As such, we analyzed eliminating the TAP uppercut, which decreases aid after two years of study; eliminating the lag in payments for accelerated study; and providing an extra semester of TAP eligibility. Analysis of the TAP uppercut TAP statute currently reduces the annual award for students after they have received four semesters (usually two years) of TAP funding. This was originally implemented as a cost-savings item; there is no academic or policy rationale for cutting aid in the last two years of college. Eliminating this reduction would guarantee adequate TAP awards to eligible students who are progressing through their program of study. Providing consistent TAP awards for eight semesters of study would cost $8.5M. If this change was implemented only for the neediest students, it would cost $2.8M. Analysis of the 18-month lag in payment for accelerated study In the 1991 budget bill s appropriation for accelerated study, payment to students was deferred until October of the following year. This was done in order to provide a one-time cash savings for that budget year. This one-time savings has continued for over 20 years. As a result, students often have to wait 18 months for a refund of tuition they have paid to a campus. This is a hardship for students, who end up fronting the cost for accelerated study. There is no long-term cost associated with changing this policy, however, there will need to be a one-time appropriation/cost to account for removing the lag in payment. Analysis of an additional semester of TAP durational eligibility Many students use TAP eligibility to take classes that turn out to be unnecessary for their program of study and then need extra semesters to complete their degree, but are no longer eligible for TAP awards. Others may need an extra semester to complete their degrees for other academic reasons, including course availability. 16

17 Providing an additional semester of TAP eligibility to students who are completing their degree in one extra semester can allow students who, on average, earn between 13 and 14 credits per semester to receive TAP until they graduate. Added TAP durational eligibility can also benefit students who required more than four semesters to earn an associate s degree and continue on to a four-year college. The cost of this additional semester is not easy to calculate, but should be minimal, based on the narrow requirements. The added semester supports college completion for all students. 7. Analysis of TAP regulations Articles 13 and 14 of the Education Law, which govern the TAP program, have been amended many times in the past 40 years. Some TAP requirements have been inserted in unusual areas and much outdated language remains in both statute and regulation. Many scholarships that have sunset remain in statute, causing confusion and misunderstandings about current programs. In the recent past, some contradictory language has been discovered and, although some issues have been subsequently corrected, a review and rewrite is necessary. Since all statutes and regulations are now easily accessible by the general public, an independent, third-party review and rewrite of TAP statutes and the agency s regulations should be undertaken. 17

18 Appendix A College Affordability in New York State: Previous New York State Student Aid Reports Several commissions have been appointed over time to review New York State policies on higher education and their reports have had a significant and lasting influence on state policy, especially with respect to college affordability. For example, the creation of the State University of New York was the result of recommendations of the 1948 Temporary Commission on the Need for a State University, appointed by Governor Dewey and chaired by Owen D. Young. 14 SUNY was created because there was a need to offer greater higher education access to meet the workforce needs of our returning vets from WWII. Heald Report (1960) resulted in the dramatic growth of the State University of New York from small, scattered colleges to the largest public university system in the nation. The report also led to the vast expansion of public higher education in the city of New York, ultimately resulting in the establishment of the City University of New York in Bundy Report (1968) developed a recommendation for a program that provides direct support to private institutions based on the number and levels of degrees provided. Keppel Report (1973) issued by the Task Force on Financing Higher Education that was appointed in October 1972 by Governor Rockefeller. The Task Force was asked to develop a program to strengthen both public and private higher education in the State by proposing better methods of financing and helping to improve the quality of the state s system of higher education. The Task Force chose to concentrate on two major areas: governance and quality of higher education in the state and the adoption of a need-based, state-funded financial aid entitlement program for undergraduate students. The Keppel Report resulted in changes in the governance and funding of higher education. No change was as long-lasting and significant as the establishment of the Tuition Assistance Program, which used the Keppel Report s student bill of rights as a blueprint. For nearly two decades following the Keppel Report, TAP was expanded; funding for the program increased in both total appropriations and individual student awards. In 1988, a multi-year phased increase in maximum TAP awards for both dependent and independent students was enacted, along with the Liberty Scholarship Program. This scholarship, when combined with TAP and the federal Pell Grant, would have provided funding for the poorest students to attend any of the public universities at no cost. The national recession that Report of the Temporary Commission on the Need for a State University System, Williams Press, Albany (1948).

19 began in 1990 resulted in a state budget crisis, which put the phased increases and the new scholarship program on hold and reversed the increases for subsequent students. TAP awards were further reduced until 1998, when maximum awards for non-public colleges were increased to $4,125 (the amount authorized in 1988 for the 1990 academic year). Even with this restoration, TAP awards for students who attended public colleges were limited to 90 percent of tuition. Governor Pataki s original executive budget called for an additional $133 million in TAP cuts. It was in this environment that the Volcker/Wharton Commission was authorized by the legislature. Volcker/Wharton Commission (1999) began their report by lamenting the drop in the percentage of state funding allocated to higher education since Their first conclusion was, New York must reaffirm its dedication to the basic principles that underlie student financial aid that education without universal opportunity is elitist and inequitable, and that financial assistance is the greatest investment the State can make in its future. The report s other important conclusion was that there is little fundamentally wrong with the TAP; rather it asserts that a budget process that produces last-minute changes (reductions) in financial aid and institutional funds, late budgets that affect the timing of student enrollment decisions, and the lack of long range planning all combine to seriously dilute the efficacy of State higher education appropriations. The Commission recognized that the program had not kept up with inflation and their highest funding priority was restoring TAP. The report recommended a phased increase of $192 million annually. Many of the 14 recommendations made by the Commission were related to TAP and most of the recommendations regarding award increases for undergraduate students were implemented or partially implemented. 19

20 Appendix B TAP Analysis Charts Chart 1: Historical Comparison of Public College Tuition and Maximum TAP Awards Academic Yr. Difference Difference $825 $ % Free $2,510 -$1, % $825 $ % Free $2,694 -$1, % $925 $ % $925 $ % $2,889 -$1, % $925 $ % $925 $ % $3,100 -$1, % $925 $ % $925 $ % $3,330 -$1, % $925 $ % $925 $ % $3,685 -$1, % $925 $ % $925 $ % $4,059 -$2, % $1,075 $1, % $925 $ % $4,568 -$2, % $1,075 $1, % $925 $ % $5,196 -$2, % $1,375 $ % $1,225 $ % $5,666 -$3, % $1,375 $1, % $1,225 $ % $6,202 -$3, % $1,375 $1, % $1,225 $ % $6,741 -$4, % $1,375 $1, % $1,225 $ % $7,317 -$4, % $1,375 $1, % $1,225 $ % $7,953 -$5, % $1,375 $1, % $1,250 $ % $8,681 -$5, % $1,375 $2, % $1,250 $ % $9,518 -$5, % $1,675 $2, % $1,350 $ % $10,280 -$6, % $2,175 $1, % $1,850 $ % $11,102 -$7, % $2,675 $ % $1,850 $ % $11,768 -$8, % $2,675 $ % $2,450 $ % $12,474 -$8, % $2,675 $1, % $2,450 $ % $13,451 -$9, % $3,425 $ % $3,200 $ % $14,182 -$10, % $3,425 $ % $3,200 $ % $14,891 -$10, % $3,425 $ % $3,200 $ % $15,609 -$11, % $3,425 $ % $3,200 $ % $16,414 -$12, % $3,425 $ % $3,200 $ % $17,189 -$13, % $3,425 $1, % $3,200 $ % $18,142 -$13, % $3,425 $1, % $3,200 $ % $19,049 -$14, % $3,425 $1, % $3,200 $ % $20,111 -$15, % $4,375 $ % $4,000 $ % $21,268 -$16, % $4,375 $ % $4,000 $ % $22,732 -$17, % $4,375 $ % $4,000 $ % $24,133 -$19, % $4,375 $ % $4,000 $ % $25,516 -$20, % $4,375 $ % $4,000 $ % $27,323 -$22, % $4,995 $ % $4,000 $ % $29,048 -$24, % $4,995 $ % $4,600 $ % $30,461 $25, % $4,995 -$ % $4,830 $ % $31,700 $26, % $5,295 -$ % $5,130 -$ % $33,000 $28, % $5,595 -$ % $5,430 -$ % $34,359 $29, % $5,895 -$ % $5,730 -$ % $35,000 $30, % $6,195 -$1, % $6,030 -$ % $35,000 $30, % $6,495 -$1, % $6,330 -$ % $35,400 $30, % * Weighted Average Tuition - some years are extrapolated Data sources: SUNY data acquired from SUNY Administration. CUNY data acquired from various sources. Independent College data acquired from CICU 20 Max TAP SUNY Tuition An Analysis of the Tuition Assistance Program Percentage CUNY Tuition Percentage Ind Tuition* Difference Percentage

21 Chart 2: Estimated TAP Recipients and Expenditures Estimated TAP Recipients and Expenditures 2011 From HESC 2012 Annual Report Sector Full Time Equivalent Recipients TAP Expenditures (millions) State University City University State Ops 64,700 $ Com Coll 59,900 $ Senior Coll 47,800 $ Com Coll 26,100 $74.30 Independent Colleges 78,800 $ For Profit Granting Degree Schools 28,800 $98.60 Registered Business Schools 2,500 $9.00 Chapter XXII TAP Schools 2,000 $9.10 Other (Rad Tech/Hospital Programs) 170 $ ,770 $

22 Chart 3: Analysis of Five-year Phased-in TAP s 5 Year BASE Expenditures CUNY Sr SUNY Sr IND For Profit Degree Schools Not under SED CUNY CC* SUNY CC* Non-Deg Reg. Bus. Schools** $ $ $ $ $9.148 $5.646 $54.20 $231.9 $ $ $9.100 $ $ $ $59.59 $240.7 $ $ $ $ $ $ $73.38 $306.9 $ $6.885 $3.502 $4.743 $4.734 $2.017 $21.88 $120.6 $ $2.963 $1.450 $1.463 $1.436 $0.916 $8.23 $32.9 $ $3.122 $0.710 $0.150 $0.291 $0.000 $4.27 $ $5.457 $0.647 $0.666 $0.849 $0.000 $7.62 $9.368 $0.40 $ $ $ $ $ $ $ *s at CCs are minimal because tuition is below $5000 and maximum award = $5000. Award s will be limited to Single Ind. Students with no dependents 22

23 Chart 4: Five-year Analysis of Tuition Credit Extension and TAP s 2015 (in millions) 2016 (in millions) 2017 (in millions) Annual TAP Tuition Credit with Tuition Credit w/o Annual TAP Tuition Credit with Tuition Credit w/o Annual TAP Tuition Credit with Tuition Credit w/o CUNY Sr. $17.08 $33.52 $55.80 $10.04 $22.57 $55.80 $12.28 $11.75 $55.80 SUNY Sr. $15.43 $39.55 $59.50 $9.10 $28.53 $59.50 $11.67 $17.79 $ (in millions) Annual TAP Tuition Credit with Tuition Credit w/o 2019 (in millions) Annual TAP Tuition Credit with Tuition Credit w/o Total Five Year Cost (in millions) Annual TAP Tuition Credit with Tuition Credit w/o CUNY Sr. $9.15 $3.05 $55.80 $5.65 $0.00 $55.80 $54.20 $70.89 $ SUNY Sr. $11.75 $7.26 $59.50 $11.64 $0.00 $59.50 $59.60 $93.13 $

24 Appendix C TAP Award Schedules through the Academic Year NOTE: Effective with the academic year and thereafter, TAP at the graduate level is no longer funded. Undergraduate Award Schedule For students who are dependent on their parents, or who are financially independent and are married and have tax dependents, or who are financially independent, are single and have tax dependents: At Degree-Granting Institutions or Not-For-Profit Registered Business Schools Schedule A - Applicable to students who received awards in the school year or earlier. MAXIMUM AWARD $3,575 or tuition whichever is less Note: Annual award is reduced by $100 after 4 payments. MINIMUM AWARD $500 NTB $ 7,000 or less 0 REDUCTION 7,001-11,000 7% of excess over $ 7,000 11,001-18,000 $ % of excess over $11,000 18,001-80,000 $ % of excess over $18,000 80,001 or more NO AWARD Schedule D - Applicable to first-time recipients in the through school years. MAXIMUM AWARD $4,125 or tuition whichever is less ($4,000 or tuition, whichever is less, at certain schools only offering programs of 2 years or less in duration.) Note: Annual award is reduced by $100 after 4 payments. MINIMUM AWARD $ NTB REDUCTION $ 7,000 or less 0 7,001-11,000 7% of excess over $ 7,000 11,001-18,000 $ % of excess over $11,000 18,001-80,000 $ % of excess over $18,000 80,001 or more NO AWARD