v r Scott A. Giles, President and CEO VERMONT STUDENT ASSISTANCE - - PowerPoint PPT Presentation

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v r Scott A. Giles, President and CEO VERMONT STUDENT ASSISTANCE - - PowerPoint PPT Presentation

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Testimony Before the Senate Appropriations Committee \,.. \.... ......,:// February 9, 2016 Presented by: ic v r Scott A. Giles, President and CEO VERMONT STUDENT ASSISTANCE CORPORATION Changing Lives Since 1965 Rising earning

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SLIDE 1

Testimony Before the Senate Appropriations Committee

\•,.. \.... ......,://

February 9, 2016 Presented by: Scott A. Giles, President and CEO

VERMONT STUDENT ASSISTANCE CORPORATION

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Changing Lives

Since 1965

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SLIDE 2 Rising Earning Disparity Between Young Adults with And Without a College Degree arnc,rg fl,!-time '.,ior. r.rs ages 25-32, in 2012 degree or more 39 5 $34
  • .— -
$31
  • - - — — - ----
—4—Bachelor's —O—Two-year degree/Some $45 $42 $36 $35 $32 $31 44 college $ $32
  • $28-
  • --....,......A.
46 High school graduate $ $50 8 $45 $40 $35
  • 1----
$30 $25 $30 A Sza 520 t
  • Silents(1965)
Early Late Gen Xers(1995) Millennials(2013) Bloomers(1979) Bloomers(1986) Notes: Median annual ea( ning are based on earning and work status during the calendar year prior to interv4aw and limited to 25-32 year olds who worked full time dur;ng the previous calendar year and reported pos!tive earnings. "Full time" refers to those who usually worked at least 35 hours a week last year, Source: Pe:: ReLearch Center tabulations of the 2013,1995,1986, 1979, and 1965 March Current Population Sur ey (CPS) Integrated Public Use P,,l,cro Samples PEW RESEARCH CENTER

Rising earning disparity

rt%
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SLIDE 3

The National Economic Imperative

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5

Four out of five jobs lost during the recession were those requiring high school education or

  • less. Those low-skill jobs are gone for good,

replaced by jobs that require specialized training and skills. Despite a lingering high unemployment rate, employers say that they lack qualified job

  • applicants. By 2020, two thirds of all jobs will

require postsecondary education.

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SLIDE 4

For the last 35 r years, funding for higher

education has , risen at about 1

half the rate of growth of the General Fund.

; $12.00 $10.00 $8.00 $6.00

Trend in Vermont's State Fiscal Support per $1000 of Pers Income

  • $9.48

$7.30

  • $4.74

$4.01

$4-00 1:
  • I I $
13 1 22
  • ,
,
  • „
1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Higher Education Funding since 1961

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SLIDE 5 W o In! North'•
  • 1 ois
New exic,o M rgla an sas ana S N Ia gr aska Conn%ticut North Cirot il . fiaWaii ittc West p irginia • New Jersey

r

agaipa tana Kentuc Ol ay no 4assactiusgt Itr.1 Tenn N m. ev South 5rota Jdaho wteVtaTe New Iowa New Missouri Mosas Canto=
  • Texas
Micmgn New Ham.* re Vrtiont

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n u= isconsin Rhode lslancl P -enss an ia South Carolina Arrzona Colorado
  • 80.00 -70.00 -60.00 -50.00 -40.00 -30.00 -20.00 -10.00 0.00
Change (%) Sources: Grapevine.Burean ofEconcroricAnalysis
  • 6.0
  • 7.5
  • 7.5
  • 21651
  • i146
  • 12.0
  • 33.1
  • 33.4
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  • 4 A
  • 4 .6
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  • 422

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  • 4
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  • 50.3
  • 5 7
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Vermont, -58%

gme•-,
  • 151-verrnont, $3.22

sift

2.00 4.00 6.00 8.00 10.00 12.00 14.00 Dollars (S) Sources: Grapoine. Bureau of Economic Analysis

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Vermont has chosen not to fund higher education

Change in State Fiscal Support for Higher Education per S1000 of State Personal Income FY1980 to FY2015 State Fiscal Support for Higher Education per S1000 of State Personal Income FY2015
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SLIDE 6

Challenges for Vermont Families

\,, \,....,. ......
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SLIDE 7

Average Tuition and Fees and Full-time VSAC Grant Awarded at Vermont 4-year Public Colleges

$12,715
  • 6-Average TF at
  • D-Average FT Grant
VT 4-yr publics at VT 4-yr publics $1,823 $1,787 1 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 fY16

Cost to attend is rising faster than incomes or state and federal financial aid

Grants, scholarships and federal aid (Pell grants) have not matched increases in college costs, forcing Vermont families to shoulder larger share of burden. In 2015-16, Vermont families paid about 20 percent more of median family income for tuition and fees for a four-year public institution vs. New England average.

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SLIDE 8

Financial aid packages leave gaps that must be funded with debt

Gift Aid, Expected Family Contribution, and Tuition,Fees, Room & Board by Sector at 4-Year Schools and CCV FY2015 Full-time Dependent Grant Recipients

$45,347 $43,917 $16,918 Vermont Private Non-Vermont $20,911 —0—Tuition, Fees, Room and Board (TFRB) Other Aid: Work Study Scholarships SEOG Tuition Waiver VSC CCV UVM $50,000 $45,000 $40,000 - $35,000 $30,000 - $25,000 $20,000 - $15,000 mil Expected Family Contribution (EFC) VSAC Grant mmi Pell MI Other Aid School Grant $13,276 $27,006 $2,012 $2,214 $1,395 $2,936 $575 $589 $128 $1,748 $5,000 $7,630 $2,820 $2,493 $13,635

Source date; Jan, 2o16

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SLIDE 9

The focus turns to nontraditional students (8)

Vermont's population is second-oldest in the nation. School-aged population has decreased by nearly 15 percent over five years. Experts predict continuing declines until 2028. Census data show more than 6o,000 Vermont adults age 25-64with some college, but no degree (18

percent of working-age adults).

  • The Nondegree Grant program has increased the number of awards by 54 percent over the last

decade.

  • Nationally, college enrollment of students age 25 and over is projected to increase by 20 percent by

2023, compared with 12 percent for students under 25.

  • VSAC's federally funded Educational Opportunity Center program reports that approximately 45

percent of its caseload is older than 25 years old.

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SLIDE 10

Pd CT

ME NH

VT NESSC

What has been the impact? Our continuation rates are lowest in region

2014 College Enrollment Rate

70%

65%

62% 6o% 60%

52%

50%

CT ME

NH RI

VT

  • NESSC

40% 30% 20%

io%

  • %

Source: New England Secondary School Consortium, 2

'eport

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SLIDE 11

Programs That Are Working

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SLIDE 12

Vermont State Grants

The Vermont State Grant is a need-based grant program for full-time, part- time or nondegree study. Student-focused policy enables students to obtain the education that best meets their needs. In FY15: 13,450 grants worth $19.2M Full-time: 8,701 grants for $14.9M Part-time: 3,057 grants for $1.4M Nondegree: 1,692 grants for $2.9M

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SLIDE 13

Scholarship programs

  • VSAC administers 165 scholarships:

Applicants compete for awards based on financial need, academic interests and more In FY15, awarded 2,702 scholarships worth about $5.7 million

  • In addition, VSAC administers state-appropriated scholarship programs:

Emily Lester Vermont Opportunity Scholarship Vermont Honor Scholarship Armed Services Scholarship National Guard Educational Assistance Program (interest-free loan) Next Generation Scholarships Vermont Higher Education Endowment Trust Fund Scholarships

  • Since 1966, VSAC has helped award more than 55,600 scholarships worth more

than $103 million.

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SLIDE 14

Career and education outreach

Talent Search & GEAR UP Talent Search assists individuals from disadvantaged backgrounds who have the potential to succeed in higher education. GEAR UP encourages low- and modest-income young people to set high academic standards and educational goals to prepare them for education beyond high school.

  • GUIDE

In an effort to extend our HS level efforts in the area of aspirations and continuation to PSE, VSAC now supports students in some of its programs through their 3rd semester of college to make sure they are successful and to improve retention. In FY15, 194 students received regular counseling and contact to help them stay on track. Of those students who enrolled in postsecondary education in the fall of 2013, 74.5% have persisted to their third semester of college. A texting program to stay in contact with our students has seen a 97% adoption rate.

  • Educational Opportunity Center

Provides counseling and information on college admissions to qualified adults who want to enter or continue a program. Served 1,746 adults; 73% are low income and first generation; 1,164 applied for financial aid; 937 enrolled in postsecondary education or training.

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SLIDE 15

Career and education outreach (cont.)

Statewide Services

College Pathways, Paying for College workshops, Financial Aid Forms Nights, and college field

trips

  • FAFSA completion

Providing high schools with real-time information about their students' FAFSA filing status in

  • rder to increase the percentage who apply for financial aid.
  • Aspirations Pilot (2nd year)

Programming throughout the school year that reinforces individual exploration and a culture that anticipates and plans for education after high school. Lamoille was the first pilot; Bellows Falls was added in FY16. Promising indicators:

  • Students in grades 9-11 report that they perceive their parents want them to continue their education after high

school at a rate 12% higher at the end of the year compared to the beginning of the academic year.

  • The aspiration rate calculated from the senior survey in 2015 is 5% higher than the aspiration rate in 2012.
  • PLPs and Naviance

VSAC, with support from AOE, is able to make available a statewide career and college planning tool with the ability to support PLPs to all schools; 81% of students required to have a PLP now have access to or use this platform.

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SLIDE 16

Saving for college: VHEIP

"•, `,
  • Vermont Higher Investment Education Plan is the state-sponsored 529 plan for

Vermont.

  • Vermont families at all income levels can invest for college and reduce their need for

borrowing. State and federal tax benefits include a io percent state income tax credit on annual contributions of up to $2,500 per beneficiary; tax-deferred earnings; and tax-free withdrawals for qualified higher education expenses. In FY i6, VHEIP plan management was transferred to Intuition College Savings Solutions, providing VHEIP account holders with lower investment fees, a wider range of investment choices from Vanguard, TIAA-CREF and others, as well as expanded online services.

  • New plan manager allows VSAC to fully integrate financial and information

resources for Vermonters and their families when planning for education after high school.

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SLIDE 17 $88.6 $80.4 $16.0 $3.4 $9.1 $191.5

Vermonters' investments top $27oM

Assets in the Vermont Higher Education Investment Plan

$223.5
  • Dollar Amount (in millions)

Since its inception Vt. families have withdrawn $116 million to help 4,722 students pursue education

$69.9 $53.5 $39.9 $28.5 $160.8 $139.7 $109.8 I Jan '01 Jan '02 Jan '03 Jan 04 Jan '05 Jan '06 Jan '07 Jan '08 Jan '09 Jan '10 Jan '11 Jan 12 Jan '13 Jan '14 Jan '15 June '15 revised Nov, 2013 $269.9 $258.2 • $250.0 $200.0 $150.0 $100.0 $50.0 $0.0 $300.0
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SLIDE 18

New higher education resource: Universal Children's Savings Accounts

17i

  • Act 45 of FY16 created universal CSAs to encourage Vermonters to continue their

education after high school by seeding college savings accounts with $250 to $500 for every baby born in Vermont. More than 50% of Vermonters do not possess a college degree; The percentage of children in poverty in Vermont is rising; Vermont will need an additional 58,000 college degrees to meet its workforce demands in 2025.

  • Research shows that when low- to moderate-income children have a savings account

even with as little as $1 to $499 in it, they are three times more likely to go to college and four times more likely to graduate.

  • Universal or targeted CSA programs or pilot programs in: ME, NV, RI, CO, OK, MS, San

Francisco, Cuyahoga County, OH.

  • Class of 2012 VT HS seniors who intended to enroll in college immediately after HS were

more likely to do so if their family had saved for college.

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SLIDE 19

A growing Vermont Advantage Loan program

The federal government earns over $60 billion charging above-market rates on student loans.

  • The Vermont Advantage education loan allows VSAC to offer Vermonters and students studying

at Vermont institutions some of the lowest rates in the country.

  • VSAC also continues to provide borrower rebates to students — over $172 million since 1995.

U.S. Department of Treasury recently announced that states may use tax-exempt bonds to offer loans directly to parents as well as offer a student loan refinancing product.

  • VSAC will begin offering a parent loan this spring and is working with U.S. Department of

Treasury on final details of a refinance loan.

We thank the Vermont Legislature for its support in securing these lower-cost loans for Vermont students and families.

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SLIDE 20

FY17 Request

,-

  • The Act 148 Committee recommended that funding for higher education

(VSC, UVM, and VSAC) increase at the rate of GF growth plus 1%.

We are requesting a 5.2% increase for Higher Education Governor Shumlin's FY 17 budget calls for increasing annual fees for mutual

fund managers to support Universal Children's Savings Accounts Program, which is administered by VSAC.

  • An additional appropriation of $100,000 to expand the aspiration pilots

beyond the two that are currently authorized and funded.

  • Add $10,000 in funding for dual enrollment stipend for books and travel,

for a total of $6o,000.

SIP

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SLIDE 21
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SLIDE 22

0-ci

(D cp rai

r•

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SLIDE 23

Trends in Postsecondary Aspiration by Gender and Parent Educational Attainment

2001 to 2014

100.0%

  • 90.0%
  • 80.0%
  • 70.0%
  • 60.0%
  • 50.0%

40.0% — 90.7%

Aspiration

Rate ___ =

a2P14(€1 J81.7%

A = A

76.8944

111 55.396. 54.2%

2001 2003 2005 2007 2008 2010 2012 2014

c7=_=,Female, not first generation

c==)Male, not first generation

Female, first generation Male, first generation

Postsecondary aspirations have declined or remained flat since 2008

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SLIDE 24

m•IWFrImP.

Percentage of Class of 2012 who planned to enroll at two- or four-year U.S. school, but did not

25% 20%

15%

Male, first generation

  • %

Aspirations remain dynamic during summer after high school graduation

Female, first Male, not Female, not generation first generation first generation 18%

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SLIDE 25

50% 40% 30%

20%

leo%

90% 8o% 70% 6o%

Ito%

  • %

Did not continue Continued

76%

TViti -tint tairca

Took ad:raring:ad math

Vermont Class of 2012 immediate postsecondary

enrollment and advanced math

24%

advanced math

Source: VSAC Senior Survey 2012 First g

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SLIDE 26 I. Jninille 42.4% 65.3% Chirtenden 54.1% 75 EV, Caledonia 47.3% Washington 51.5% 71.6% Addisoit
  • 63.9%
Orange
  • 73.
42.3% 59 Rutland 49.0% 77 n''., 58.0% 66.3..

% of first-generation high school grads enrolled

Bennington 59.8% 67.8%

% of high school grads enrolled who are not first generation

Windham 50.3% 68.7%

Postsecondary enrollment varies by county

tirand Isle Franklin Orleans Essex 48.5% 52.9% 49.7% 64.3% 71.6% 67.1% 72.7%

Enrolled at 2- or County 4-yr institution in Fall of 2012 Addison 61.5 Bennington 60.3 Caledonia 55.4 Chittenden 66.7 Essex 65.9 Franklin 57.9 Grand Isle 60.0

Lamo ill e

50.2 Orange 49.8 Orleans 53.2 Rutland 59.0 Washington

61.4 Windham

58.7 Windsor 60.7

College enrollment &family education

Source: VSAC Research, NSC Senior Class Survey Class of 2012

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SLIDE 27

Enrollment by generation status and gender

Vermont Class of 2012 Postsecondary Enrollment Rates, by Generation Status and Gender

90% 80% 70% 60% 50% 40% 30% 20% io%
  • %
77% 67%

6o%

42% First gen, Male First gen, Female Non-first Gen,Male Non-first gen, Female
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SLIDE 28

VSAC

BOARD OF DIRECTORS

Dorothy R. Mitchell, Chair

Worcester, Vermont Martha P. Heath, Vice-Chair

Westford, Vermont

David Larsen, Secretary

Wilmington, Vermont

Representative Sarah E. Buxton

Tunbridge, Vermont

Pamela A. Chisholm

Waterbury, Vermont

Senator Ann E. Cummings

Montpelier, Vermont

State Treasurer Beth Pearce

Barre, Vermont

Michael K. Smith

Westford, Vermont
  • G. Dennis O'Brien
Middlebury, Vermont

David Coates

Colchester, Vermont

Katharine Hutchinson

  • St. Albans, Vermont

Scott A. Giles

President/CEO

Executive Assistant to the President Michelle Bullard

Tom Little

Vice President & General Counsel

Marilyn Cargill

Vice President of Financial Aid Services & Research

Mike Stuart

Vice President & CFO

Patrick Leduc

CIO and Vice President for Career and Education Outreach