Background Information on Affordability Issues

February 9, 2007

Tuition and Fees

Indiana Public Institution Full-Time Hoosier Undergraduate

Tuition and Required Fees Effective Fall 2006 1996-97 2006-07 Average

      10-yr     Annual

  Rate   Increase Rate   Increase

INDIANA UNIVERSITY          

Bloomington $3,783   98.5% $7,510   7.1%

East $2,728   84.8% $5,040   6.3%

Kokomo $2,757   83.9% $5,071   6.3%

Northwest $2,768   85.8% $5,142   6.4%

South Bend $2,856   83.2% $5,231   6.2%

Southeast $2,718   88.3% $5,118   6.5%

IUPUI $3,300   97.7% $6,523   7.1%

             

PURDUE UNIVERSITY            

West Lafayette $3,208   121.2% $7,096   8.3%

Calumet $2,775   97.0% $5,466   7.0%

North Central $2,760   101.7% $5,567   7.3%

IUPU Ft. Wayne $3,006   101.0% $6,041   7.2%

Consumer Price Index (CPI - fiscal year, 2006-07 est.) 158.9   26.3% 200.7   2.4%

Indiana Public Institution Full-Time Hoosier Undergraduate

Tuition and Required Fees Effective Fall 2006             

1996-97 2006-07 Average

      10-yr     Annual

  Rate   Increase Rate   Increase

Indiana State University $3,072   110.2% $6,456   7.7%

             

Univ. of Southern Indiana $2,454   84.2% $4,520   6.3%

             

Ball State University $3,286   107.9% $6,830   7.6%

             

Vincennes University (Fr/Soph) $2,367   58.5% $3,751   4.7%

             

Ivy Tech Community College of Ind. $1,880   44.3% $2,713   3.7%

             

Consumer Price Index (CPI - fiscal year, 2006-07 est.) 158.9   26.3%

200.7   2.4%

Source: Indiana Commission for Higher Education.      

Ten-Year Weighted Average, First-Time Entry

Source for National and Midwest: College Board, 2006 Trends in College Pricing

1995-96 2005-06 Avg. Annual

rate Δ% rate Increase

National

2-year $1,330 64.1% $2,182 5.1%

4-year $2,811 95.4% $5,492 6.9%

Midwest

2-year $2,358 42.3% $3,355 3.6%

4-year $3,728 76.9% $6,595 5.9%

Indiana

2-year $1,921 41.5% $2,719 3.5%

4-year $3,021 100.2% $6,047 7.2%

T&F as % of Median Family Income

1989-90 1994-95 1999-00 2003-04* 2004-05*

Median Family Income 39,700 47,465 62,079 66,988 69,266

IU Bloomington 5.5% 7.1% 6.9% 9.8% 9.9%

IU Southeast 4.4% 5.1% 5.0% 6.7% 6.7%

IUPUI 5.0% 6.3% 6.0% 8.5% 8.6%

PU West Lafayette 5.1% 6.1% 6.0% 8.7% 8.8%

PU North Central 4.3% 5.1% 5.2% 7.0% 7.1%

Indiana State U 5.0% 5.9% 5.5% 8.1% 8.1%

U of Southern Indiana 4.1% 4.6% 4.6% 5.8% 5.9%

Ball State U 5.0% 6.0% 5.9% 8.9% 8.9%

Vincennes U 3.9% 4.6% 4.1% 4.7% 4.8%

ITSC 3.6% 3.6% 3.2% 3.5% 3.6%

Source: U.S. Census Bureau, http://www.census.gov/hhes/income/4person.html; U.S. Dept. of HHS

State Appropriations for Higher Education

Higher Education Operating Appropriations

University Operating

University Line Items

Debt Service

SSACI Program

sOther

ProgramsOPERATING

TOTAL

1984-85 $497,343 $18,946 $34,488 $24,301 $5,220 $580,297

1989-90 $743,321 $15,650 $64,018 $42,868 $12,185 $878,041

1994-95 $824,587 $25,365 $79,401 $60,491 $13,603 $1,003,447

1999-00 $1,025,422 $37,903 $104,776 $103,733 $18,657 $1,290,491

2004-05 $1,138,602 $37,691 $110,240 $188,243 $15,472 $1,490,247

2006-07 $1,185,266 $37,094 $131,149 $218,431 $16,367 $1,588,307

CHANGES THROUGH 2006-07

04-05 to 06-07 4.1% -1.6% 19.0% 16.0% 5.8% 6.6%

99-00 to 06-07 15.6% -2.1% 25.2% 110.6% -12.3% 23.1%

94-95 to 06-07 43.7% 46.2% 65.2% 261.1% 20.3% 58.3%

89-90 to 06-07 59.5% 137.0% 104.9% 409.5% 34.3% 80.9%

84-85 to 06-07 138.3% 95.8% 280.3% 798.9% 213.6% 173.7%

$ in thousands

Total Expenditures and State Share

Total Expenditures

Sources: State Budget Agency As-Passed Books, Institutional Biennial Budget Requests Income I

1992-93 1996-97 2000-01 2004-05 2006-07 Δ%

IUB $287.0 $340.6 $431.1 $565.1 $608.7 112.1%

IUPUI Health $94.4 $110.4 $128.8 $144.4 $171.7 81.9%

IUPUI Gen Acad $104.5 $122.1 $157.1 $215.2 $227.1 117.3%

PU WL $312.2 $362.0 $462.5 $614.7 $670.1 114.6%

ISU $91.4 $99.8 $111.9 $131.4 $129.5 41.7%

USI $24.1 $34.9 $50.5 $65.6 $71.0 194.6%

BSU $151.0 $173.0 $200.4 $228.9 $247.0 63.6%

VU $38.4 $42.9 $45.7 $56.9 $58.0 51.0%

ITCCI $87.6 $108.2 $148.4 $226.9 $260.2 197.0%

TOTAL $1,357.8 $1,599.1 $1,981.8 $2,564.8 $2,784.6 105.1%

CPI 43.0%

HEPI 67.8%

State Operating Appropriations

Source: State Budget Agency As-Passed Books. In millions of dollars.

1992-93 1996-97 2000-01 2004-05 2006-07 Δ%

IUB $146.7 $159.0 $181.4 $195.3 $191.9 30.8%

IUPUI Health $77.8 $84.7 $96.3 $100.3 $99.1 27.4%

IUPUI Gen Acad $59.8 $63.1 $80.7 $90.3 $90.3 51.0%

PU WL $178.4 $191.9 $224.9 $240.2 $241.3 35.3%

ISU $63.5 $68.0 $76.7 $78.9 $73.9 16.4%

USI $14.1 $19.9 $28.8 $33.7 $35.2 149.6%

BSU $96.8 $105.1 $117.6 $124.9 $122.9 27.0%

VU $22.1 $27.0 $29.8 $35.9 $36.4 64.7%

ITCCI $55.7 $69.4 $93.0 $128.5 $144.1 158.7%

TOTAL $807.1 $902.1 $1,063.9 $1,176.1 $1,185.3 46.9%

CPI 43.0%

HEPI 67.8%

Gross Unrestricted Fees

Source: Institutional Biennial Budget Requests, Income I

1992-93 1996-97 2000-01 2004-05 2006-07 Δ%

IUB $140.3 $181.6 $249.7 $369.8 $395.0 181.5%

IUPUI Health $16.6 $25.7 $32.5 $44.1 $53.8 224.1%

IUPUI Gen Acad $44.7 $59.0 $76.5 $124.8 $133.2 198.0%

PU WL $133.8 $170.1 $237.7 $374.6 $407.9 204.9%

ISU $27.9 $31.8 $35.3 $52.4 $48.3 73.1%

USI $10.1 $15.0 $21.7 $31.9 $29.8 195.0%

BSU $54.2 $67.9 $82.8 $104.1 $114.8 111.8%

VU $16.3 $16.0 $15.9 $21.0 $17.8 9.2%

ITCCI $31.9 $38.8 $55.5 $98.3 $103.0 222.9%

TOTAL $550.7 $697.0 $918.0 $1,388.7 $1,469.7 166.9%

CPI 43.0%

HEPI 67.8%

FTE and HEPI Adjusted Revenues and Expenditures, 1992-93 to 2004-05

$3,500

$4,000

$4,500

$5,000

$5,500

$6,000

$6,500

$7,000

$7,500

$8,000

$8,500

$9,000

$9,500

$10,000

$10,500

$11,000

$11,500

$12,000

$12,500

1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

All Inst Approp All Inst Tuition Rev All Inst Expend

If FY93 levels maintained

Change in State and Family Share of Education Expenditures

FY1995 to FY2005

Source: Indiana Commission for Higher Education.

57.2%

2.2%

40.6%

56.8%

2.5%

40.7%

56.4%

2.7%

40.9%

55.9%

2.7%

41.4%

55.3%

3.0%

41.6%

54.7%

2.9%

42.4%

53.7%

3.0%

43.3%

51.2%

3.4%

45.4%

48.1%

3.7%

48.1%

46.3%

4.1%

49.5%

45.9%

4.0%

50.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

State Operating Appropriations

Tuition & Fees

SSACI Aid

University Operating Appropriations and SSACI Expenditures on Public Students

$800,000,000

$850,000,000

$900,000,000

$950,000,000

$1,000,000,000

$1,050,000,000

$1,100,000,000

$1,150,000,000

$1,200,000,000

$1,250,000,000

$1,300,000,000

Constant (CPI) $

Current $

Fall Headcount Enrollment in Indiana Postsecondary Institutions

Total346,378

Public266,790

Private*79,588

Source: Annual Editions of Report of Enrollment in Indiana Colleges and Universities, prepared for the Indiana Association of Collegiate Registrars and Admissions Officers. Independent Colleges of Indiana. Commission for Higher Education Student Information System. *Awaiting update

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

1979-80

1980-81

1981-82

1982-83

1983-84

1984-85

1985-86

1986-87

1987-88

1988-89

1989-90

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

Hoosier and Reciprocity FTE

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

190,000

200,000

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

Operating Appropriations and SSACI Expenditures on Public Students per Hoosier FTE

$5,000

$5,250

$5,500

$5,750

$6,000

$6,250

$6,500

$6,750

$7,000

$7,250

$7,500

$7,750Constant (CPI) $

Current $

Estimated Weighted Average Resident Tuition and Fees Net of SSACI Aid per Hoosier Undergraduate

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

$5,500

2 yr Current $

4 yr Current $

4 yr CPI Constant $

2 yr CPI Constant $

Financial Aid

Sources of Aid

• Grants– Federal, State, Institutional, Private

• Loans– Federal, Private, Subsidized, Unsubsidized, PLUS

• Work Study

Federal Grants• The maximum Pell Grant for 2004-05 is $4,050

• The 2004-05 average Pell Grant was $2,230

• The median expected family contribution (EFC) of Pell Grant recipients in 1999-00 was $53; for non-recipients, EFC was $8,282

• The median family income of Pell recipients in 1999-00 was $15,098; for non-recipients, median family income was $49,475

• On average, the maximum Pell award in 2003 covered 68% of COA at CCs, 41% at public 4-year institutions, and 16% at private, not-for-profit 4-year institutions

• Pell Grant recipients who completed a degree in 1999-00 borrowed a median of $17,430, or $2,000 more than the median for all undergrads

2003 Status Report on the Pell Grant Program, American Council on Education; College Board

State Grants• Primary grant program is Higher Education Award/Freedom of

Choice (Frank O’Bannon Award)

• Other large programs are 21st Century Scholars and Children of Disabled Vets, et al.

• Mean awards for 2005-06 were*:– $3,303 for all students

– $3,089 for public 4-year students

– $5,515 for independent, not-for-profit 4-yr students

– $1,270 for public 2-year students

• The SSACI budget is increasing much faster than any other portion of the state’s higher education budget – nearly 800% since 1985 compared to 140% for university operating

*Source: SSACI 2005-06 annual report

Institutional Grants• Merit-based and need-based

– Over the past decade, the percentage of full-time undergrads at 4-year colleges receiving institutional aid increased

– Over the same period, there was a notable increase in the percentage of undergrads in the highest income quartile who received institutional aid, especially between 1995-96 and 1999-00

*What Colleges Contribute: Institutional Aid to Full-Time Undergraduates Attending 4-Year Colleges and Universities, National Center for Education Statistics, 2003

2002-03 Institutional Grant Aid to Resident Undergraduates ($76.5M)

21%79%

merit aid need based aid

Source: Indiana’s postsecondary institutions

2002-03 Institutional Grant Aid to Non-Resident Undergraduates ($51.4M)

11%89%

merit aid need based aid

Source: Indiana’s postsecondary institutions

Loans

• Subsidized Stafford Loans

• Perkins Loans

• Other Repayable Loans

• Unsubsidized Stafford Loans

• PLUS (Parent)

• Private Lenders

Borrowing: Average Student Loan Debt of Graduating Resident UGs Who Borrowed

Source: 2004 Institutional Performance Indicators Submission

1999-00 2000-01 2001-02 2002-03

IUB $17,823 $17,287 $16,751 $18,254IUE $18,086 $17,946 $17,805 $18,486IUK $13,536 $13,305 $13,073 $12,781IUN $13,488 $13,654 $13,819 $15,632IUSB $16,099 $16,174 $16,249 $17,112IUS $12,381 $12,795 $13,209 $12,989IUPUI $18,534 $19,119 $19,703 $19,529PUWL $15,539 $15,687 $15,762 $16,598PUC $11,843 $13,535 $13,069 $13,120PUNC $10,769 $13,771 $19,476 $21,870IPFW $15,793 $16,871 $14,125 $15,773ISU $14,629 $16,274 $16,774 $16,925USI $13,736 $12,980 $14,906 $13,749BSU $16,038 $16,469 $16,280 $16,733

ITSC $5,551 $6,221 $5,709 $6,636

Bachelor's Degrees

Associate's Degrees

Private and federal student loan volume, 1995-96 and 2005-06

$1,708

$36,913

$17,300

$68,586

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Private Sector Federal Loans

Loan

Vol

ume

(Con

stan

t 200

5 do

llars

, in

mill

ions

)

1995-96

2005-06

913% Increase

86% Increase

Note: Private sector loans do not include state sponsored non-federal loans; constant dollars calculated using Consumer Price Index.

Source: College Board, 2006. Trends in Student Aid.

Conclusions

Good News and Bad News

• State appropriations for higher education are increasing, but not fast enough counteract inflation and enrollment growth

• The inflation-adjusted value of today’s maximum Pell grant is below its value in 1975-76

• State grants increased with tuition and fees up to FY03, but are now stalled and falling far behind actual T&F at some institutions

Good News and Bad News

• Institutional grant aid continues to increase, but much is directed toward upper-middle- and high-income students

• The net price (cost of attendance minus all grant aid and loans) was still far in excess of the expected family contribution for most low-income students and many middle-income students*

*What Students Pay for College: Change in Net Price and College Attendance Between 1992-93 and 1999-00, National Center for Education Statistics, 2002

Effects on Students• Longer time to degree as students work more

hours• More loans, including more private (non-federal)

loans parent loans and credit card debt• Low-income students are increasingly shifting to

2-year institutions*• Financial barriers are estimated to prevent 48% of

qualified high school graduates from attending 4-yr colleges and 22% from attending 2-yr colleges**

*”Pell Grant Students in Undergraduate Enrollments by Institutional Type and Control, 1992-93 to 2000-01,” Postsecondary Education Opportunity, December 2003

** Empty Promises: The Myth of College Access in America, A Report of the Advisory Committee on Student Financial Assistance, 2002

Bachelor’s Degree Attainment by Age 24 by Family Income Quartile, 2005

Bottom Quartile 12.3%

Second Quartile 16.6%

Third Quartile 27.9%

Top Quartile 72.6%Note: National representation.

Source: “Family Income and Higher Education Opportunity, 1970 to 2005.” Postsecondary Education Opportunity, December 2006.

2004 Taskforce: Points of Consensus

• Public Process of Setting Tuition and Fees• Tuition and Fee Guidelines – Set fees for 2 years

at a time• Financial Aid: Continue to Support SSACI and

Institutional Aid to SSACI Eligible Students• Four Year Degree Completion Incentives• Part-Time Grant Program Should be Improved• Ensure More Students Graduate with Core 40

Degree• Increase Undergraduate Enrollment at Community

College

Recent Actions Related to Recommendations from the 2004 Taskforce

on College Affordability• Indiana’s colleges instituted a process of notifying the public

of proposed tuition and fee increases and holding public hearings

• Indiana’s colleges set tuition for two years at a time (in-line with the state’s biennial budget)

• Indiana made the Core 40 curriculum the default high school curriculum for all students

• Indiana aligned its financial aid policy with Indiana’s Core 40 curriculum

• CHE proposed an incentive to increase time-to-degree

• Community college system has been expanded statewide