R62I0001 Maryland Higher Education Commission House Appropriations Subcommittee on Education and Economic Development February 5, 2009

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1 Martin O Malley Governor Anthony G. Brown Lt. Governor Kevin M. O Keefe Chairman James E. Lyons, Sr. Secretary of Higher Education R62I0001 Maryland Higher Education Commission House Appropriations Subcommittee on Education and Economic Development February 5, 2009 Responses to Recommended Actions Raised in the Department of Legislative Services Analysis 1. Strike contingent reduction language on Sellinger formula and reduce Sellinger program aid to nonpublic institutions. The Commission concurs with the DLS recommendation 2. Strike contingent reduction to Private Donation Incentive Grants and reduce Private Donation Incentive Grants. The Commission concurs with the DLS recommendation. Secretary s comments to issues raised in the Department of Legislative Services Analysis 1. The Secretary should comment on why second-year retention and six-year graduation rates at HBIs have declined while the six-year graduation rate for all students has increased and discuss the steps MHEC is taking to increase these rates. While there is not a definitive explanation for the declines in the second-year retention and six-year graduation rates at the HBIs, this trend is likely due, at least in part, to students experiencing increased financial hardships which resulted from tuition increases that outpaced increases in needbased financial aid. When compared to the state s TWIs, the HBIs have traditionally enrolled a greater proportion of students from low-income families. For example, between 2005 and 2008, 48 percent of undergraduates enrolled at Morgan State University, on average, received Pell Grants, the financial aid tool reserved for the most economically disadvantaged students. Similarly, over the last four years, between 40 to 52 percent of students enrolled at the University of Maryland Eastern Shore have been from low-income backgrounds. The assumption that financial burdens may be a factor which contributed to lower retention and graduation rates at the HBIs is supported by a finding from a recent survey conducted by Morgan State University of non-returning freshmen which showed that 25 percent of respondents cited financial challenges as the primary reason for not returning for their sophomore year. From fiscal 2002 to fiscal 2007, tuition and fees at the State s four HBIs increased by 42.1 percent. MARYLAND HIGHER EDUCATION COMMISSION 839 Bestgate Rd Suite 400 Annapolis, MD T F TTY for the Deaf

2 An increase in the proportion of HBI students who require remedial coursework may also have contributed to the lower retention and graduation rates that these campuses experienced over the last several years. According to the most recently available data from the MHEC s Student Outcome and Achievement Report, each of the State s four HBIs experienced significant increases in the percentage of their first-year students who were required to take a developmental math, English or reading course. MHEC continuously assesses and provides feedback on progress made by the HBIs toward improving their retention and graduation rates through its annual Performance Accountability Report and Retention and Graduation Reports, and its biannual Minority Achievement Report. MHEC has also highlighted the importance of closing the achievement gap, which encompasses increasing retention and graduation rates at the HBIs, in the 2009 State Plan for Postsecondary Education. Additionally, MHEC encourages and supports the efforts and strategies being implemented by the postsecondary segments to increase the second-year retention and six-year graduation rates at the HBIs. As a part of the University System of Maryland s (USM) Closing the Achievement Gap initiative, Bowie State University established a goal to decrease by at least half the achievement gap in retention (7 percentage points) and graduation rates (14 percentage points) between its African Americans students and other African American students enrolled in USM. Coppin State University created an enrollment and retention taskforce and recruited a new Vice President for Enrollment Management to develop a comprehensive plan which ensures that its retention and graduation rates increase. The University of Maryland Eastern Shore continues to fine-tune its retention strategies to reverse the decline in its retention and graduation rates. Specific strategies include: redesigning the Summer Bridge Program to increase student progression by offering killer courses for academic credit and providing students with intrusive academic support; continuing to analyze the admissions profile of persisters so that appropriate interventions can be designed and implemented; continuing to implement an intrusive intervention program which monitors and tracks students identified as at-risk, ; re-establishing learning communities; establishing a math lab with intrusive tutoring for students in developmental courses; institutionalizing specialized interventions including early notification for attendance and mid-term grades that fall below academic standing for African American males, who have higher attrition rates than their female peers. 2. The Secretary should comment on how MHEC plans to increase the number of STEM graduates produced by Maryland institutions. MHEC encourages and supports the efforts of the postsecondary segments to increase the number of STEM graduates produced by the State s colleges and universities. In their 2008 accountability reports, several institutions highlighted programs, strategies and initiatives that they have implemented to increase the number of students majoring in STEM disciplines, as well as the number of students who successfully earn degrees in these high-demand fields. For example, beginning in the fall of 2008, Frostburg State University offered two new STEM programs: a Bachelor s of Science and minor in Information Technology, and a Bachelor s of Science in Engineering with concentrations in electrical engineering, materials engineering, industrial 2

3 chemistry and engineering management. During the academic year, the University of Maryland Eastern Shore was approved to offer a Bachelor s of Science in Engineering. The University of Maryland, Baltimore County continues to attract large numbers of undergraduate students, particularly African Americans, pursuing degrees in STEM areas through the Meyerhoff Scholarship Program, LSAMP, and MARC U-STAR. The LSAMP program is particularly noteworthy because it includes programs at the University of Maryland Eastern Shore, and the University of Maryland College Park. These efforts, along with others being launched throughout the State, are likely to yield considerably more STEM graduates in subsequent years. MHEC also collaborates with the Maryland State Department of Education to support secondary school STEM initiatives, especially those that are aligned with postsecondary programs and will enable students to move seamlessly into and through the higher education system at a reduced cost. Examples of these efforts include the increased number of articulation agreements between high schools and 2- and 4-year colleges/universities that align Career and Technical Education programs. MHEC also actively participates in all of the Governor's Workforce Investment Board Industry Sector Initiatives by providing program statistics, guidance, and collaborative input in helping to determine the State's STEM needs and how these needs can best be met. Such collaborative efforts have assisted with the development or enhancement of initiatives such as the Nurse Support Program II, the Advisory Council on Workforce Shortage, and the community college construction consortium. The Advisory Council on Workforce Shortage was established to develop a data driven process for identifying occupational areas in short supply for State financial aid purposes. A number of STEM occupations have been recommended for inclusion in the Workforce Shortage Student Assistance Grant. With sufficient funding, awards can be made in these fields. The data and recommendations from the Advisory Council can also be used to inform State workforce policies and assist with the development and review of academic programs and capital projects. MHEC is also collaborating on a statewide initiative with funding from the Lumina Foundation, Making Opportunity Affordable planning year grant. This Maryland project is focused on increasing the opportunities for students in Maryland to pursue teacher education in STEM fields, to pursue engineering programs of study, and to increase enrollment and matriculation in nursing programs. Each of these STEM focused initiatives concentrates on the transition from two to fouryear institutions. 3. The Secretary should comment on how the Maryland Higher Education Commission plans to implement the recommendations of the Higher Education Funding Model for Maryland (HEFMM). MHEC will implement the HEFMM in a number of ways. First, it plans to incorporate the model into the 2009 State Plan for Postsecondary Education as the overarching goal. This means that MHEC will assess annually the State s progress in meeting each goal component and provide the information through the Maryland Return on Investment template as recommended by the commission. In addition, as MHEC reviews budget information and makes policy related budget 3

4 recommendations to the Governor and General Assembly, it will do so keeping these goal components in mind and align recommendations to move towards achieving these goals. 4. The Secretary should comment on how MHEC will incorporate the HEFMM funding guideline into funding recommendations and on whether the limited number of peers within the competitor states will affect their use as a performance measure for Maryland institutions. MHEC was involved with the development of the HEFMM Funding Guidelines. The development of the competitor state model for the new funding guidelines included discussion and collaboration with the University System of Maryland, its constituent institutions and with Morgan State University. Under the HEFMM Funding Guidelines, peer groups for each Maryland institution are composed of 13 to 65 peer institutions with the same 2005 Basic Carnegie Classifications from within the competitor states. While they are not the same institutions, the number of institutions within the new peer groups is comparable to those under the former model. Therefore, it will be possible to select institutions to use as a performance measure for the Maryland institutions. With these peer groups and other components of the HEFMM funding guideline model in place, MHEC can begin using the new funding guideline model in its recommendations for fiscal MHEC has not yet determined how the performance analysis will be modified under the new funding model, but will work with the University System of Maryland, its institutions and with Morgan State University to develop an appropriate mechanism. 5. The Secretary should comment on how MHEC plans to implement the commission s recommendations regarding Regional Higher Education Centers. In the State of Maryland BRAC Action Plan Report, MHEC has been given the task of researching the market demand and feasibility of expanding, modifying or creating RHECs in certain areas of the State. To carry out this task a study is being conducted examining the specific recommendations identified in the commission report. As recommended by the commission, when the study is complete, MHEC will convene an intersegmental workgroup to review the study findings and other specific issues relating to the regional higher education centers outside the University System of Maryland. This group will recommend best practices for the centers as well as address governance, operational and administrative oversight issues. This will include the review and modification of the current approval process for regional higher education centers to include analysis of the educational needs of the surrounding area and analysis of the best method for providing for those needs. In addition, the workgroup will discuss and make recommendations to assist with the development of articulation agreements and to encourage centers to work more closely with businesses and the surrounding community, and to be more entrepreneurial. MHEC will continue to advocate for funding of the RHEC strategy that was developed in

5 6. The Department of Legislative Services (DLS) recommends reducing Sellinger aid to nonpublic institutions $15,633,522 as proposed by the Governor, and adjusted to incorporate current year per FTES funding at selected four-year public institutions. DLS also recommends that the Sellinger formula be level funded in fiscal 2011 and that the per FTES funding level should be frozen at the independents per FTES percentage of State appropriation to selected public four-year institutions given level funding in fiscal 2011, projected to be 11.8%. MHEC concurs with the reduction for fiscal 2010 and proposal to level fund the Sellinger program in fiscal MHEC does not support using current year per FTES funding at selected four-year public institutions or level funding Sellinger at 11.8 percent beyond fiscal Under the Sellinger formula, funding for independent institutions is based on actual State appropriations and budgeted FTE enrollments for the four-year public institutions for the prior fiscal year. To change the formula to be based on funding for the current fiscal year would require the Commission to estimate state appropriations and FTE enrollments for the public four-year institutions for the upcoming fiscal year. These estimates may or may not be aligned with the Governor s budget and might have to be revised in January and again in April when appropriations for the four-year public institutions have been decided. This could create uncertainty for the independent institutions in planning their upcoming fiscal year budgets. This year, the Commission to Develop the HEFMM restated Maryland s commitment to private colleges and universities and community colleges programs when it recommended that funding for community colleges and eligible private institutions continue to be allocated using the statutory formulas based on State appropriations per FTES to a specified set of four-year public institutions. MHEC recommends that the Sellinger program remain in its current statutory form, and that funding be restored as proposed in the Governor s budget. 7. The Secretary should comment on how MHEC plans to implement the commission s recommendations regarding Historically Black Institutions (HBIs). MHEC will work collaboratively with the HBIs, their regents and their segment heads, as appropriate, to implement these recommendations. MHEC will convene a group of national experts to assist the State s HBIs with developing programs and services to ensure that lower-income, lessprepared students graduate in a timely fashion. The goal will be to produce students at the college freshman level and above who perform in an acceptable academic fashion in college-level reading, writing and mathematics. These programs will include pre-admission work with feeder high schools, summer bridge programs, as well as a myriad of first-year or freshman academic support programs. In addition, MHEC will set a schedule for Morgan State University and the University of Maryland Eastern Shore to provide detailed strategic plans designed to improve their institutional platforms to make them comparable to those of other Maryland doctoral institutions, and, if possible, with those in the competitor states. Also, the Secretary of Higher Education will provide the Governor and 5

6 Legislature with recommendations on how to improve these institutional platforms in order to make the doctoral-granting HBIs comparable. MHEC will also work with the select panel of experts to assist the HBIs in identifying a few existing doctoral programs as an initial priority group to be brought to the threshold level of support for comparability. Panel members would be advising the Secretary of Higher Education on the requisite level of attainment needed by the State s HBIs in order for their programs to become quality, comparable doctoral programs in terms of specific capacity and competitive results, as seen at other universities i.e. from competitor states. MHEC will then convene a separate panel of experts to monitor progress toward the timely attainment of the goal of comparability. 8. The Department of Legislative Services (DLS) recommends that HSCRC be directed to relieve the hospitals of the 0.1% tax supporting NSP II for one year, to permit MHEC to spend down the existing special fund balance. DLS further recommends that administration of NSP II be transferred to the State Board of Nursing. Legislation such as the BRFA would be needed to implement this recommendation. On January 30, 2009, the Health Services Cost Review Commission (HSCRC) notified the Chief Financial Officers of Maryland hospitals to stop the payments for the Nurse Support Program II (NSP II) effective as of February 1, 2009 until further notification to the contrary. This will result in reduction of the fiscal 2009 fund balance by approximately $5 million. HSCRC and MHEC are working to develop a plan to spend down the existing fund balance. For a number of reasons, MHEC disagrees with the analyst s recommendation that the administration of NSP II be transferred to the State Board of Nursing. While typically an analysis sets the stage for a recommendation that is not the case here. There is no mention of the State Board of Nursing or a reason for the recommendation in the analysis. The main function of the Maryland Board of Nursing (BON) is related to regulation not education. As stated in the Request for Applications for the Competitive Institutional Grant, NSP II focuses on the education of nurses and, therefore, concentrates on the nursing educational system, including university, college and community college schools of nursing and hospital and school consortia. The primary goal of NSP II is to increase the supply of qualified nursing faculty required to expand the capacity of Maryland s nursing programs. The mission of the BON is to regulate the practice of registered nurses, licensed practical nurses, nurse anesthetists, nurse midwives, nurse practitioners, nursing assistants, medication technicians, and electrologists. As part of their regulatory responsibility for nursing, the BON does approve nursing education programs based on their alignment with nursing standards or nursing practice to ensure accreditation and approve continuing education courses required for license renewal. However, the central role of the BON is to license nurses. As the coordinating body for higher education in Maryland, MHEC approves nursing academic programs for degree granting and works extensively with the institutions of higher education in a variety of roles. 6

7 One of those roles is in the area of grant administration. MHEC has a long history of administering grants to colleges and universities. Because of the long history and expertise in grant administration, the HSCRC contracted with the MHEC to administer the Nurse Support Program II. MHEC has personnel, systems and procedures in place to implement new grant programs such as the NSP II Competitive Institutional Grant. MHEC has an Office of Grants that has expertise in writing and issuing RFPs, providing grant-writing and grant management technical assistance, recruiting and training grant review panel members, developing grant awarding documents, monitoring grant projects, etc. MHEC administers several other competitive grant programs that award grants to the colleges and universities. The BON does not have a grants office or expertise in the area of grants management. The other portion of NSP II is the Statewide Initiatives that are available to individuals to assist students and nursing faculty in attaining their educational and career goals in the field of nursing. The first initiative is the Graduate Nursing Faculty Scholarship and Living Expenses Grant for students to complete the graduate education necessary to become nursing faculty at Maryland institutions of higher education. Students receiving the scholarship and living expenses grant must commit to working as nursing faculty at Maryland institutions upon program completion. If students do not meet their service obligation, their scholarships must be repaid with interest. MHEC currently administers the State s 22 financial assistance programs. MHEC s Office of Student Financial Assistance has staff, expertise, systems, and procedures in place to administer this program and the service obligation requirements. The BON does not currently administer student financial assistance or track service obligations nor does the BON have financial aid expertise or operational systems. The Statewide Initiatives also provide fellowship awards for new nursing faculty hired by Maryland institutions to expand enrollments in their nursing programs. The awards are $20,000, with $10,000 distributed the first year and $5,000 in each of the next two years, assuming continuous employment in good standing. The New Nursing Faculty Fellowship is patterned after a similar program administered by MHEC, the Henry C. Welcome Fellowship. The BON does not have expertise or systems in place for administering fellowships. Through the Statewide Initiatives loan assistance repayment is available to nurse faculty members. MHEC administers the Janet L. Hoffman Loan Assistance Repayment Program (LARP) that provides funds to individuals who work in eight areas of employment that are critical to the State. MHEC has the staff, expertise, systems, and procedures in place to administer loan assistance repayment programs. The BON does not currently administer loan assistance repayment nor does the BON have expertise or operational systems. MHEC works closely with the Governor s Workforce Investment Board, the Department of Labor Licensing and Regulation, the Maryland Office of Planning, and others to identify critical areas of employment shortage. MHEC tracks and monitors the production of graduates to fill the shortage areas. Nursing is one of the State s highest workforce shortage priorities. HSCRC and MHEC feel that MHEC is the appropriate agency to administer NSP II. 7

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