Higher
Education
Partnership
Volume 2 Issue 5
Oct./Nov., 1998
In support of and working together with
Alabama A & M Univ
Alabama State Univ
Univ of Alabama
Univ of Ala at Bham
Univ of Ala at Huntsville
Auburn Univ
Auburn Univ at Mtgy
Jacksonville State Univ
Univ.of Montevallo
Univ of North Alabama
Univ of South Alabama
Troy State Univ
Troy State Univ Dothan
Troy State Univ Mtgy
Univ of West Alabama
Inside this Issue
Partnership Update
Partnership Update |
Scholarship Proposals:
A Closer Look
A Closer Look
Frequent radio and television
advertisements launched during Alabama’s gubernatorial race are proposing
scholarship programs as a part of each candidate’s platform. Voters
must certainly have questions about the proposals. A few of the more obvious
questions are: 1) What are the major differences in the two programs? 2)
Which plan will be open to my family? 3) Will either plan have an impact
on the other educational offerings of the state? 4) How do the current campaign
proposals compare to the scholarship plans in other states? 5) Can the state
afford these plans? 6) What will a “scholarship driven” cut into
appropriations to higher education mean to the universities?
The Higher Education Partnership has answers to these basic questions. Each
of the previously mentioned issues deserves a detailed response; however,
we will attempt to summarize.
What are the major differences in the James and Siegelman
scholarship proposals?
Although both proposals offer free college tuition to a group of qualified
Alabama high school graduates, neither proposal is widely understood at
this point. Even the architects admit that much is left to be defined. However,
the key differences are significant.
First, the Siegelman plan is inclusive of a revenue source for paying
for the scholarships: the lottery. The James plan is designed to take money
from the growth in the already impoverished Education Trust Fund. The trust
fund is the source of all funds used to support the essential services of
K-12, post-secondary and university education.
Second, the James plan has more parameters for qualification than
the Siegelman plan. The James plan requires applicants to have a minimum
grade point average of B and an ACT score of at least 20. The Siegelman
plan is open to all students with at least a B average and has no ACT limitations.
Third, the James plan is, according to scholarship experts with the
Alabama Commission on Higher Education, modeled after a plan that limits
scholarships to recent graduates desiring to attend four–year institutions.
The Siegelman plan is open to anyone desiring to attend a two–year
or technical institution. Plus, if the person has a B average or better,
any graduating student is eligible for a scholarship to attend a four-year
institution. The Siegelman plan is open to a broader range of applicants.
II. Which plan is open to my family?
With the James plan, it depends on the previously mentioned factors: ACT
test score, grade point average, and school of choice. The Siegelman plan
provides options to any Alabamian desiring to attend college.
If you are concerned about your child, then keep the following in mind.
If he meets the appropriate criteria, either plan will assist in his effort
to go to college. If you are a parent attempting to save money for your
child’s education, then both plans have the potential to benefit you.
However, before you depend on either plan, you need to make sure your child
has a good chance of qualifying for the scholarship. Otherwise you better
continue to save money.
III. Will either plan have an indirect impact on other
parts of education?
Obviously, the Siegelman plan is based on the lottery becoming a reality.
This new revenue source should eliminate the need to extract money from
the Education Trust Fund to pay for the scholarships.
The James plan is based on the state having to take money from other parts
of education in order to fund the scholarships.
Since the growth in the Education Trust Fund is needed to fund the normal
operations of our education system, to take that money and use it for the
scholarships means it will weaken the other educational programs in the
state. Removing education funding will have a negative impact on the quality
of Alabama’s secondary, post-secondary and university programs. In
addition, taking money from the Education Trust Fund will be especially
harmful to the quality of the educational product that the scholarship recipients
receive.
IV. How do the current campaign proposals compare to
the scholarship plans in other states?
Since the Siegelman plan models the Georgia plan, it can be expected to
create similar results based on similar income. For example, since its 1993
introduction, the Georgia lottery has generated over $626 million in scholarship
funding. In this same period of time, the State of Georgia has sent over
300,000 young people to college. The Siegelman campaign says that their
plan would allow all graduating Alabama high school students a chance to
take advantage of the program. Based on the statistics from Research Associates,
an educational research organization from Washington, D.C., Alabama graduated
39,000 students in 1997.
The James plan on the other hand is modeled after
a Louisiana scholarship plan. The Louisiana model produced over 13,000 scholarship
recipients in 1997. Estimates from the James campaign predict that 4000
Alabamians will take advantage of their plan in the first year. This is
approximately 10% of the state’s graduating seniors, according to information
from Research Associates.
While neither of the current proposals specifically mentions the administrative
responsibilities that are associated with the scholarship plan, both Georgia
and Louisiana have special government entities set up to handle the scholarship
programs. This is an additional cost that must come from the Education Trust
Fund under the James plan and the lottery revenue in the Siegelman plan.
V. Can the State of Alabama
afford these plans?
From the standpoint of return on investment, a little known statistic from
The Chronicle on Higher Education says the State of Georgia is predicted
to experience a 24% increase in the number of high school graduates over
the next ten years. The same Chronicle report says that the State of Alabama
can expect 0% growth over the same number of years. The expected enrollment
increase in Louisiana is -3%, which is obviously much lower than Georgia.
Why is the 24% growth a good sign for Georgia? A growing number of high
school graduates means an increased level of scholastic motivation. If this
translates into an increase in the level of participation in the universities,
it means an improving work force, better jobs, growing communities and typically
an improved quality of life. Economic experts across the country will also
concur that a person with advanced level of education has greater potential
to increase his wealth.
From a direct cost perspective, the two plans differ.
The State of Alabama should not feel a tremendous budgetary impact from
the Siegelman plan. For the Siegelman plan to work, the lottery must pass
and the state should be able to utilize lottery money for the costs of the
scholarships and, possibly, for the cost of the administration.
According to the James campaign, their original scholarship plan would cause
the state Education Trust Fund to take a hit for $38 million. Now that they
have a revised plan and the ACT score required for eligibility has been
lowered significantly, the costs of the James plan have increased. Can the
State of Alabama afford to fund a scholarship proposal that uses money that
would otherwise be available to fund the improvements needed in the other
areas of education? Dollars for upgrading school facilities or for paying
faculty salaries come from the Education Trust Fund. Most educational leaders
would concur that the state can not afford to cut the dollars that would
otherwise be dedicated to serving the essential needs in K-12, post-secondary
and university education.
VI. What will a “scholarship driven” cut in
the appropriations to higher education mean to the universities?
To cover the tuition for the approximately 15,000 students that the James
campaign figures will ultimately be participating in the program, the higher
education portion of the Education Trust Fund budget will take another negative
hit. If $38 million is taken out of the higher education appropriation,
the universities will have to take approximately a 4% funding cut. When
this additional loss is combined with the fact that higher education’s
percentage of the Education Trust Fund budget has already dropped from 33%
to approximately 27%, then the danger of losing any additional funds becomes
apparent. Any proposal that cuts higher education funding by another 4%
will lower the dollars available to the universities. When viewed in comparison
to the impact of the 7.5% cut of four years ago, one can only conclude the
results would be similar: limited funding for faculty/staff compensation,
tuition increases …
In addition, the universities would be serving more students on fewer dollars,
which would further cut into the already low funding per student totals.
The Siegelman proposal does not directly take revenue from the Education
Trust Fund.
Conclusion: Both plans leave questions unanswered. For instance,
can the universities be expected to continue to provide more services without
additional revenue? Additional revenue is needed to provide the universities
the competitive strength to handle the new students. The Siegelman scholarship
plan does creatively address the issue of new money and, as far as the Education
Trust Fund is concerned, it does not take money from the institutions. The
James scholarship plan takes money away from the institutions.
Understanding these important facts about the proposed scholarships will
make it easier for all Alabamians to determine which plan is the best for
Alabama’s future.
P. O. Box 761, Montgomery, AL 36101-0761
334-832-9911Fax 334-832-9995