Strategies for a Thriving Illinois Sustainability

An equitable, sufficient, and stable funding system would:

• Provide equitable funding so that students can receive the best educational experience and succeed at whichever institution they attend. Illinois needs a funding system for higher education that supports equitable access, progression, and timely completion and accounts for the robust student support services (counseling, advising, wellness, bridge, mental health and child care supports, to name a few) that help students get to and through completion. Students should have equitable access to institutions, and institutions should have resources necessary to provide students the supports that enable them to succeed. Inequitable resources available to community colleges resulting from over-reliance on property taxes must also be recognized and addressed.
• Support a thriving postsecondary system that enriches the state and its residents. Illinois depends on higher education to preserve, expand, and transmit knowledge, offer solutions to society’s challenges, serve as a civic partner, produce well-educated residents, and enrich life. Research at our institutions expands our understanding of the social and physical world, enhances the health and wellbeing of our residents, and drives innovation and economic development in our communities. Educating students in the humanities and liberal arts supports the whole student and ensures that the leaders of the future better understand the human condition. Institutions are vibrant anchors of communities. In short, the postsecondary system enables students to better build knowledge, create wealth, and be civically engaged. Illinois’ higher education funding system should support these values and goals.
• Fund institutions sufficiently to achieve student, institutional, and state goals. Illinois must provide sufficient (i.e., adequate or full) funding necessary to achieve the state goals set out in the higher education strategic plan, for each institution to fulfill its mission, and to support students in achieving their goals. For the higher education system to deliver on these expectations, we must ensure that institutions are funded to do so.
• Ensure affordability for all students. The funding system should ensure that students can start and complete college and access a career of their choice without excessive student debt. This means tuition must be affordable. To do so the funding system must recognize the interrelationship among federal student aid, state funding for public universities and community colleges, state need-based (MAP grants) and other student aid, tuition, local property taxes, and capital appropriations. Our funding system should ensure that college is affordable for the most vulnerable students in the state
• Recognize institutional uniqueness. A value of the state’s higher education system is its diversity of colleges and universities, each with different missions, yet all working in concert to serve the state. This calls for a funding system that recognizes these different missions and accounts for variation in institutional portfolios that serve the state (e.g., returning adult students, first-generation students, graduate and professional training, health care provision, research, community engagement, etc.).

• Encourage partnerships outside higher education. Partnerships are vital to a strong higher education ecosystem. The higher education system should seek to build partnerships, such as with businesses, non-profits, the philanthropic community, the federal government, and regional, national, and international collaborations that have a vested interest in a flourishing higher education system in Illinois. The goal is to reinforce support for this crucial public good in the state.
• Articulate rationale for public support. A transparent funding system should point the system toward meeting individual, institutional, and state goals. A funding system that fulfills the principles outlined above makes the case for public support.

MAP is shown to be effective in helping low-income and minority students enroll in and complete college. Investing in MAP is smart policy. As the data above show, thousands of students do not receive MAP because the funding runs out.

Estimates suggest that an initial $50M investment, if targeted to ensuring late-filing students have access to MAP, would both address the decades-long problem of MAP funds running out, which disproportionately impacts community college students, and would meet the goal of a student from a family with less than $45,000 annual income being able to attend community college full-time free of tuition and fees using MAP and Pell grants.

A $50M additional annual investment in MAP is estimated to ensure that all students can continue to be served ¹⁸ and that a MAP grant will cover 50% of average tuition and fees in 10 years.

_
^{18  Under assumptions about the number of students completing FAFSA, tuition and fee increases, etc.}

MAP can only be used for fall and spring semester, while currently Pell can be used year-round. For many students, taking some courses over the summer can keep them on track to degree completion.¹⁹

_
^{19  Recent data also shows that summer programs targeted to students who do not complete 30 credit hours in their first year helps keep them on track to graduation.}

The practice of institutions placing a “hold” on a student account because of an outstanding balance has significant equity implications. Illinois students should not be locked out of completing a degree due to small outstanding balances. However, there is a tension between the institutional need to collect revenue owed and the impact on students, who, unable to re-enroll, drop out. A hold could also mean the student in the future cannot access a transcript to enroll elsewhere (thus losing credits) or secure employment.²⁰ These significant consequences can result even if balances are relatively small or the student is close to graduation.

Innovative debt forgiveness programs exist, like Chicago State University’s Finish Strong or City Colleges of Chicago’s Fresh Start, that help students get back on track to completing their degree. Another idea is to create a clearinghouse so that students attempting to attend a different school could have their transcript released as a result of the institutions connecting through the clearinghouse and making a financial agreement.

_
^{20  A report by IthakaS+R consulting analyzes the extent of the “stranded credit” problem. They also estimate that in Illinois, over 275,000 students have nearly $800M in outstanding debt to Illinois institutions, an average of $2,900.}

The data cited above shows the large gap between tuition and fees and the full cost of attending college for students who depend on MAP and Pell.

The Illinois Treasurer’s Office is developing loan products for students to cover the costs above MAP, Pell, and Federal Direct Student Loans to avoid students relying on high-cost private loans to cover these additional costs. Agencies should work closely with the treasurer to ensure students in need of additional financial resources are connected to this program.

The Illinois Treasurer’s Office provides robust college savings plans through the Bright Start and Bright Directions 529 programs. Research shows that simply the presence of such savings increases the likelihood of children attending college by three times and the likelihood of completing by four times.²¹ That office estimates that an $8M - $10M investment annually could fund the Children’s Savings Program -- which provides $50 in a 529 account to each Illinois child at birth (PA 101-0466).

An endowment of $100 million could fund the program sustainably. Less would be needed if only low-income families were supported. Such an “early scholarship” program could grow into substantial funds for families for higher education by the child’s high school graduation.

_
^{21  Terri Friedline, William Elliott, Ilsung Nam. “Small-dollar children's saving accounts and children's college outcomes by race.” Children and Youth Services Review. Vol. 35, No. 3, March 2013. Pages 548-559.
See also Elliott, W. & Rauscher, E. (2013). From disadvantaged students to college graduates: The role of CSAs (Chapter 4-Brief). In W. Elliott (Ed.), Giving children a financial stake in college: Are CSAs a way to help maximize financial aid dollars? (Biannual Report of the Assets and Education Field). Lawrence, KS: Assets and Education Initiative.}

Higher education institutions share many similar administrative functions and there are opportunities to shift routine functions to a statewide or regional centers to free up local staff for more strategic work or to invest savings in student-facing services.

• Human resources should be explored as a place to start since public universities are all already part of the State Universities Civil Service System, the state-administered benefit plans, and the State Universities Retirement System.
• Shared IT services are another promising area. The South Metropolitan Higher Education Consortium provides its 11 member institutions—public and private four-year institutions and community colleges—an opportunity to share costs related to major and expensive IT services, such a disaster recovery, compliance, and security audits. The services provided through these joint efforts are more robust than any individual institution could afford to secure alone.²²

_
^{22  Additionally the “Mutual Aid” agreement covers support in the event of natural disasters, communicable disease outbreak, or the like. The member institutions step in to provide needed resources such as IT support, facility resources, classroom space, supplies, or counseling and media support to the impacted institution.}

• Procurement: The Illinois Public Higher Education Consortium (IPHEC) serves public universities and community colleges across the state by providing joint procurement efforts. Currently, IPHEC procures $400M of goods and services annually on behalf of public universities and community colleges. Still, there are tremendous opportunities to expand and reduce cost, particularly if upfront commitments and quantities can be secured and for highly consistent commodities. There are also ongoing saving opportunities are available to Illinois higher education institutions through the Midwest Higher Education Compact for IT programs and services.
• Student health insurance: A statewide student health insurance pool/purchase should be considered. Each institution procures its own student health insurance plans. However, the student risk profile varies across the state, with some institutions serving a younger student body and others serving older adults. There is also variation in the health outcomes of the communities different institutions serve. As a result, students pay disparate rates for health insurance based on their institutional peers. A broader risk pool would both increase negotiating power and spread cost across the state.