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Governor Jindal Unveils Higher Education Reform Proposals

Press Release

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Date:
Location: Baton Rouge, LA

In a speech today to members of Louisiana's college governing boards, Governor Bobby Jindal unveiled his legislative package to reform the state's higher education system. The reform package includes three key components that focus on enhancing the LA GRAD Act, updating tuition, and setting standards for higher outcomes at colleges and universities. The Governor also said he will again support the creation of a single board for institutions to streamline the postsecondary leadership structure.

Governor Jindal highlighted a number of reforms and key gains made in higher education since he took office, but he emphasized that there's still more work to do improve the state's colleges and universities.

Governor Jindal said, "While improvements in our higher education system are notable and important, many performance measures and outcomes are still unacceptably low, and we still have more work to do to serve our students and ensure they get a quality education that will give them opportunities for the future. Over the last few weeks, we received feedback from a wide variety of stakeholders on what schools need and where they need to do better. This legislative package includes three key components that are the result of our collaborative work with higher education leaders.

"The cost of higher education is increasing, which is why we will help schools both manage their budgets better--through an enhanced GRAD Act--and help them gain the resources they need to be truly excellent. Though the next fiscal year will be a difficult budget year, we should not sacrifice quality or confuse budget challenges with the need to raise outcomes in this state. Just last week, the Board of Regents announced it had identified 459 degree programs that are low-performing. This is the kind of streamlining and focusing on excellence that we need in Louisiana, in good budget years and bad.

"If you compare per-student funding to six-year graduation rates across the country, you'll see that the number of dollars you have is only as good as how you spend them. We can use the resources we have more effectively by supporting key components to our economic success, like our technical colleges, while continuing to focus on our number one goal: ensuring our students succeed in college and are prepared to enter the 21st century workforce. That's what our package of legislation will do. I want to thank the Flagship Coalition for their hard work and collaboration on crafting these initiatives with us to support our universities and improve student outcomes. These reforms will help provide our students the tools they need to succeed in the opportunities of tomorrow."

The Governor also stressed that he will protect higher education in the upcoming state budget. Governor Jindal said, "Through the use of creative solutions to protect higher education services while improving outcomes, we expect the reduction to higher education to now be less than 10 percent. This means we will propose a budget that does not cut more than 10 percent of state general fund for higher education -- and that does not include any new revenues generated from the initiatives I will outline here today."

1. Enhance The LA GRAD Act

The Governor said he will work to enhance the LA GRAD Act passed last year by fulfilling the promise of operational autonomies and boosting the use of data in the contracts negotiated between campuses and the Board of Regents this fall.

LSU estimates that with increased autonomies for procurement, facilities management, human resource management, and budgeting, they could generate tens of millions of dollars in savings over the first five years of implementation.

1) To reduce the red tape in the budgeting process, the Governor said he would work to enhance the GRAD Act to provide greater flexibility for schools in carry-forward funding. Currently, campuses are not allowed to carry forward self-generated revenue from one fiscal year to the next. They can roll over some state dollars, but they are limited in number and restricted in use. That means that schools stock up on pens and paper every June as the end of the fiscal year approaches -- afraid they will lose the funding. Instead, schools should be able to think strategically about budgeting and develop long term plans for their funds to better meet regional and statewide needs. The Governor said he will pursue legislation to allow schools to carry forward revenue and reduce the restrictions on how carry-forward dollars may be used.

2) To reduce the red tape in the procurement of university property, the Division of Administration's IT Office is working with schools to delegate authority for small purchases of academic and research items. The Governor said he will introduce legislation to increase the threshold for a Procurement Support Team review of purchases from $100,000 to $250,000.

3) To reduce the red tape in human resources management, the Governor said he will grant greater management flexibility to universities for their federally funded and auxiliary personnel -- ranging from food service workers to those working on top-caliber research projects. This reform will make it easier for universities to manage the size and duties of their workforce, while maximizing performance and increasing the school's ability to compete with regional peers. Additionally, DOA is working with university leaders to develop proposals that grant increased autonomies from the Civil Service system to help schools manage the role, scope and mission of their workforce.

4) To reduce the red tape in facilities management, the Governor said he will also enhance the GRAD Act to give universities the ability to manage capital development projects to help them improve efficiencies on campuses by decreasing the cost and timeline of construction needs. This reform will allow schools to better address ongoing building maintenance needs while also prioritizing new construction projects necessary to improve student performance.

The Governor also announced legislation in the upcoming session to strengthen GRAD Act contracts by focusing them more strongly on ensuring students get the skills they need to compete and succeed in the workforce. This includes:

* Prioritizing the "Student Success" metrics, which include graduation, retention, and overall completion rates;
* Rewarding schools for taking the initiative to raise admission standards above the Board of Regents' baseline standards, and streamlining their own programs above and beyond the program review process undertaken by the Board of Regents;
* And implementing two data systems that will provide schools with the tools they need to boost outcomes.

o The first data system recognizes that early intervention when a student falls behind on credits or fulfilling their degree requirements can be instrumental to preventing dropouts and keeping students on track to graduation.

oThe second data system acknowledges that with the limited resources available in these tough budget times, it is essential that we evaluate our costs through the lens of outcomes, and identify and use best practices to spend the dollars we have more strategically.

2. Updating Tuition

In order to ensure schools have the resources they need to improve outcomes for students, the Governor said he is also pursuing three changes to tuition in the upcoming legislative session:

A. Supporting Community and Technical Colleges

Currently, the cost to attend a community college is determined solely by geography. The state's community college tuition is a function of the date when the school was created by the Legislature, so older schools tend to be less expensive than newer ones. Since tuition increases authorized by the Legislature recently have been percentages, these older schools have no way to catch up to other schools.

In order to bridge this disparity, this legislation will provide the authority to phase in the standardization of community college tuition across the state to that of the highest allowed rate, which is still below the SREB average for two-year schools. The average increase would about $190 per student.

This reform will be especially important at Louisiana's technical colleges where current tuition leaves a lot of federal dollars on the table. Roughly 70 percent of technical college students qualify for Pell Grants, yet technical college tuition is just 21 percent of the average Pell Grant award. With this legislation, schools will have the authority to phase in an increase to 55 percent of the average Pell Grant, which is still lower than the 62 percent SREB average.

B. Updating Expectations for Credit Hours

Currently, many students sign up for 17 or 18 hours and drop down to 12 hours midway through the semester. This means that schools are paying for professors and classroom space that is no longer needed.

In order to discourage excessive class dropping, this legislation will raise the cap on per credit hour tuition from 12 to 15 hours and also require that schools implement tougher course drop policies. This will address the problem from both sides, keeping tuition affordable while recognizing the operational costs of schools.

C. Covering Mandated Costs

To help meet the ever-growing bill of mandated costs, the Governor will introduce legislation that indexes the Operational Fee, which was designed when it was passed to cover mandated costs by charging an operational fee of four percent of the 2004 tuition. The legislation will set the fee at four percent of the current tuition. This will not cover all increases in mandated costs, but it will generate tens of millions of dollars in revenue for universities.

3 Setting Standards Higher

Finally, the Governor said he will support the Board of Regents' efforts to better target higher education funding more broadly. The current higher education funding formula is complicated, and to better support the postsecondary goals of the state, it should be made easy to understand while focusing more on outputs.

In particular, the Governor said he will build off of last year's work by streamlining the performance-based metrics into four performance pools that have similar schools competing against benchmarks of their peers on the GRAD Act's "Student Success" metrics, which include graduation and retention rates.

This recognizes the different missions and scopes of Louisiana's two year and various types of four year schools, as well as targets these dollars at the state's most pressing problem -- ensuring students succeed in college and are prepared for the 21st century workforce

Single Board Management System

The Governor thanked the Board of Regents members and the four management boards for meeting together and said he will again support legislation to form a single board to streamline university management and help improve student outcomes.

Governor Jindal said to board members, "I know that each of you is working hard to improve our higher education system and outcomes for our students. However, I believe the structure you are working within is not designed for efficiency or clarity in setting forth a concise vision for higher education in Louisiana geared toward maximizing the potential of our students and our state.

"For example, many of our institutions are not paired with similar campuses in the same system, and the sheer size and administrative structure of the systems, despite this meeting today, do not lend themselves to collaboration. If, for example, a decision is being made about two schools in different systems, it would likely require the approval of three of the five boards sitting here today. Our state needs a highly coordinated system with a laser-like focus on outcomes. To meet this goal, we will put forward a constitutional amendment this year that creates a single board for institutions with advisory councils for colleges of the same type. A single board for institutions will streamline our postsecondary leadership structure to help drive improved outcomes."

Highlights of Achievements in Louisiana's Higher Education System

Building a Strong Community College System:

* In the last year, six Louisiana two-year schools were listed in Community College Week's 50 fastest growing community colleges for their respective size and fourteen two-year schools made Community College Week's top 100 Associate Degree Producers in the Nation.

Keeping Education Affordable:

* TOPS has sent nearly 500,000 students to college who might not have otherwise been able to afford to do so. In fact, each year, roughly 50 percent of Louisiana students who choose to attend college in state qualify for and receive TOPS. TOPS participants have a six-year graduation rate of 57 percent, whereas non-TOPS recipients graduate at a rate of 20 percent and the state average is 37 percent.
* The Governor announced legislation recently to constitutionally protect more TOPS funding.

Reforming High School Dropout Prevention Programs:

* According to the annual Diploma Counts report, Louisiana's high school graduation rate has increased by 5.3 points over the last decade. That's 2.2 points more than the national average, which only increased 3.1 points over the same time period.

Protecting Higher Education Funding:

* While Louisiana's overall state budget has been reduced since January 2008 by almost 26 percent, higher education has decreased by only 4.3 percent.
* In FY 2010, Louisiana ranked 9th in the nation for the amount of state dollars spent on higher education as a percentage of state taxes.

Improving the State's Workforce:

* In the past year, Louisiana added nearly 46,000 people to its labor force, which stands now at roughly 2.1 million.
* Louisiana's pool of available workers has increased by 3 percent since January 2008. Nationally, the civilian labor force is down 370,000 people or -0.02 percent from January 2008.
* Louisiana's nonfarm employment grew by 26,500 jobs from December 2009 to December 2010, marking the seventh consecutive month of year-over-year employment growth in our state.
* Over the past 12 months, Louisiana's job growth rate was nearly 90 percent faster than the U.S. and about 40 percent faster than the South.


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