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Governor Jindal Announces LA GRAD Act

Press Release

Location: Baton Rouge, LA

Today, Governor Bobby Jindal joined higher education officials, business leaders and legislators to announce the LA GRAD (Granting Resources and Autonomy for Diplomas) Act that will grant colleges and universities increased autonomy and flexibility in exchange for a commitment to meet clearly defined statewide performance goals, including boosting graduation rates. Governor Jindal emphasized that the act's fundamental goal is to improve performance at Louisiana's colleges and universities and make more Louisiana students graduates of their programs.

Governor Jindal said, "The GRAD Act works to answer the call from higher education for increased flexibility and autonomy needed to reform their systems and improve their outcomes for our Louisiana students. This legislation will give institutions the flexibility they asked for, while also mandating that their autonomy be directly linked to improved outcomes and more of our students graduating with degrees they need for successful careers. Through this legislation, we want to increase graduation rates for students, so they have the skills they need to compete in the 21st century workforce."

Jindal added, "I believe strongly that our higher education system plays a vital role in our state's current and future economic outlook. That is why we proposed no cuts to higher education campuses in the FY 11 budget and we are working closely with intuitions to make the reforms they need to become more sustainable, while also increasing their performance. The goal we all share is for every Louisiana citizen to be able to get a great education and pursue their dreams right here at home.

"For that to happen, we need our higher education institutions to keep students progressing toward graduation and help them identify studies that will shape their future careers. A higher education system that has more autonomy and produces more results for our students will mark the Louisiana Way forward in post-secondary education."

Governor Jindal cited a number of statistics to describe the state of higher education in Louisiana today, including that:

* State appropriations for higher education doubled between the 1999 and 2009 fiscal years -- the third greatest increase among states for that time period
* SREB reports Louisiana's six-year graduation rate for four-year universities is 38 percent compared to the 53 percent SREB state average -- which ranks Louisiana as having the second worst graduation rate in the South
* In FY 09 Louisiana ranked 8th in the nation for appropriations of state tax funds for operating expenses of Higher Education per $1,000 in personal income; and 7th in the nation in Higher Education appropriations per capita
* According to SREB, 72 percent of Louisiana students are enrolled in four-year institutions and 28 percent in two-year schools, compared to averages in other SREB states of 55 percent of students in four-year schools and 45 percent in two-year schools.

The Governor said that the Postsecondary Education Review Commission (PERC) found that there is a substantial disconnect between Louisiana's postsecondary education system and statewide, as well as regional, economic development needs. Governor Jindal noted that PERC members and college and university leaders spoke extensively about the challenges they face in setting tuition and fees. Louisiana is the only state in the nation that requires its public colleges and universities to seek a two-thirds vote of the Legislature to adjust tuition to levels comparable with other states.

PERC adopted a recommendation that said: "the Legislature should grant colleges, universities limited operational autonomy and tuition and fee authority … provided that institutions achieve specific, measurable performance outcomes aimed at improving their graduation/completion rates…" and meet "the state's current and future workforce and economic development needs."

The LA GRAD Act will put this PERC recommendation into law in the upcoming legislation session. The bill will be authored by Speaker of the House Jim Tucker.

Speaker of the House Jim Tucker said, "With Louisiana's student outcomes among the lowest in the nation -- it's clear we need to make some significant changes if we are to compete with the rest of the nation for students and jobs. The legislation outlined by Governor Jindal and supported by the PERC commission will provide our institutions with the flexibility they need for improving outcomes, while also encouraging them to incorporate common sense plans like raising standards, eliminating poorly performing programs and having our four year schools collaborate more effectively with our two year institutions."

Commissioner of Higher Education Dr. Sally Clausen said, "This proposed legislation sends a clear signal to our campuses and universities that performance pays. Using accountability to leverage tuition assistance and operational autonomy is an excellent way to reinforce our primary goal -- to successfully educate more citizens in a cost efficient manner. We look forward to working with the Governor on this critical legislation."

LSU System President Dr. John Lombardi said, "The Governor's plan for improving higher education, that matches increased authority for management boards and universities to increased standards for student performance, is a welcome innovation. Combined with the commitment to stabilize higher education funding reflected in the proposed budget for FY2010-11, this initiative creates a framework for Louisiana's higher education management boards and institutions to drive improvements in student achievement and success."

University of Louisiana System President Randy Moffett said, "I applaud the efforts of Governor Jindal to craft a solution that increases much-needed resources and autonomy for Louisiana's colleges and universities. At the same time, it increases performance and sets high standards, all within a framework that nurtures transparency and accountability. The University of Louisiana System's eight universities are committed to achieving these goals, and we are ready to get to work."

Kassie Freeman, Interim President of the Southern University System said, "We commend Governor Jindal for boldly and creatively addressing the challenges facing higher education in Louisiana through the Louisiana GRAD Act. In line with the Governor's recommendations, the Southern University System has already begun to formulate strategies for improving standards, meeting expanded targets, and implementing vigorous strategies to move our system forward. We intend to continue to enhance programs that work and pattern examples of best practices and employ sound solutions to eliminate existing weaknesses and program ineffectiveness."

LCTCS President Dr. Joe D. May said, "We are very pleased with the recommendations Governor Jindal made for the future of higher education in our state. The Louisiana GRAD Act will greatly enhance the experience for our 70,000 community and technical college students, especially concerning their transfer to Louisiana's four year institutions. We are committed to demonstrating progress in our colleges in all areas that this proposal plans to monitor, especially in the area of guaranteeing that the number of students placed in jobs steadily increases. We are focused on providing the best preparation possible for Louisiana's workforce and are encouraged to see that the Governor's plan supports that goal."

Dr. Joseph Savoie, President of the University of Louisiana at Lafayette said, "I am pleased that the Governor is proposing such progressive legislation for higher education. Greater autonomy, coupled with strong accountability, will encourage better results for students in Louisiana colleges and universities."

University of New Orleans Chancellor Dr. Tim Ryan said, "There are a lot of good ideas in this package that can benefit our students. The flexibility provided to our schools in these reforms will free the hands of our higher education administrators so they can take the steps needed to improve their institutions, which will no doubt result in improved student outcomes and achievement levels."

Bill Fenstermaker, Chairman of Blueprint Louisiana said, "Blueprint Louisiana has consistently maintained that our higher education graduation rates are unacceptable and that we need to do a better job of aligning workforce needs with the missions of our higher education institutions. We applaud Governor Jindal for introducing this promising reform to give institutions more flexibility and autonomy. But more importantly, it's a roadmap to improve student outcomes and graduation rates."

President and CEO of the Baton Rouge Area Chamber Adam Knapp said, "Business leaders across the state have come together saying that higher education reform must be the top state priority for 2010. Governor Jindal's proposal takes a big step forward by linking performance goals to revenue autonomy. This could provide needed flexibility for institutions as different as research universities and community colleges. BRAC thanks the Governor for his leadership in proposing a compelling solution to a complicated issue."

GNO, Inc. President Michael Hecht said, "When business and government leadership work together, great things can happen for Louisiana. We applaud Governor Jindal for recognizing the critical importance of higher education; for welcoming the proposals of the business community; and, for crafting legislation that addresses our education challenges in a thoughtful and far-sighted way. Particularly, the idea of revenue autonomy, linked to performance, holds promise for the schools and students of our state."

President of the Council for A Better Louisiana (CABL) Barry Erwin said, "We are very excited about Governor Jindal's higher education proposal particularly its strong emphasis on improving performance. It incorporates a number of significant reform ideas that CABL and others have advocated and we believe it will have a major and positive impact on post-secondary education for years to come. We look forward to working with the administration on this important effort."

Businesses for Improving Louisiana's Development: Higher Education coalition spokesman Rob Stuart said, "On behalf of the 33 business groups of the BILD: Higher Education coalition, we are pleased to see Governor Jindal presenting an aggressive and dramatic proposal to address Louisiana's higher education crisis, especially increased institutional autonomy to control tuition and fees. We like that the concept is tied to long term performance improvement, and look forward to working with the administration on crafting the specifics of legislation to address the BILD goals to improve our economic competitiveness statewide."

Bossier Parish Community College Chancellor Jim Henderson said, "The Louisiana GRAD Act is a tremendous step towards the development of a truly effective higher education enterprise, and Bossier Parish Community College hopes to be one of the first institutions to sign a performance agreement. The goals associated with job placement of career students and academic performance of transfer students are exactly the types of outcomes by which community colleges should be measured."

Senator Ben Nevers said, "The work completed by the Postsecondary Education Review Commission gave our higher education institutions a road map to provide students with a quality postsecondary education. With the Governor moving forward in proposing flexibility in tuition and operations, we're giving our colleges and universities the tools they need to make real lasting changes that will benefit our students and our great state."

Autonomy in the GRAD Act

Through voluntary, six-year performance agreements with the Board of Regents, institutions would be granted autonomy to achieve better outcomes in two core areas, based on yearly performance evaluations.

The first is limited tuition and fee authority. Management boards will be allowed to increase tuition and fees for participating institutions, without legislative approval, by up to 10 percent until they reach the average tuition and fees of their institutional peers. These increases would be based on the institutions' yearly progress in achieving specific performance goals.

In accordance with the Board of Regents' current tuition and fee policy, LSU will be benchmarked against other public state flagship institutions, not just those in the southern region.

After reaching the average tuition of their peers, institutions may increase tuition and fees up to five percent or the amount of the increase in the Higher Education Price Index in the previous year, whichever is greater.

Participating institutions will also be allowed to establish tuition and fees according to credit hours, rather than having them capped at full-time, 12-credit hour status.

The second element of autonomy under this bill is operational flexibility, meaning that participating institutions will be granted greater flexibility in conducting day-to-day business to run their campuses. This legislation will allow institutions to carry forward from one fiscal year to the next a greater percentage of unspent dollars, give them more flexibility in purchasing information technology products or services, and allow them flexibility from state travel regulations.

After meeting academic performance goals during the first phase and demonstrating the ability to responsibly exercise operational flexibility, institutions may qualify for even more flexibilities -- like in procurement, as well as flexibility in getting construction projects approved. Governor Jindal said that he is continuing to work with the Division of Administration and the higher education community to identify areas where increased flexibility can be granted.

LA Grad Act Performance Expectations

In exchange for the GRAD Act's increased autonomy and flexibility, institutions are expected to meet several goals during the six-year agreement, which would run from FY11 to FY16.

These goals include:

* Phasing in increased admission standards and other policies to increase retention rates, beginning in FY11, to project graduation rate goals consistent with institutional peers. These would be the same peers used for tuition authority
* Increasing the number of program completers at all levels each year
* Eliminating academic programs with low completion and that are not aligned with current or strategic workforce needs
* Utilizing technology for distance learning to expand educational offerings
* Designating Centers of Excellence
* Developing partnerships with feeder high schools to prepare students for postsecondary education
* Increasing research productivity and technology transfer at research institutions and raising it to levels consistent with institutional peers, specifically research in key economic development industries
* Phasing out remedial education and developmental study programs at four-year schools, unless a two-year institution in the same area does not offer those courses
* Phasing out associate degree program offerings at four-year schools, unless a two-year institution in the same geographic area cannot offer those programs, and increasing the number of associate degrees at community colleges
* Management boards must establish a schedule to increase nonresident tuition at no less than the average of what other SREB states charge Louisiana residents, and monitor the impact of the increase
* Community and technical colleges must demonstrate progress in increasing the number of students placed in jobs, and the performance of associate degree recipients who transfer to universities. They must also increase passage rates on licensure and certification exams and workforce foundational skills as measured by ACT WorkKeys
* Four-year institutions must provide feedback to two-year institutions on the performance of associate degree recipients enrolled there
* Four-year institutions must also develop partnerships with two-year institutions to help admit students who fail to qualify for admission into a four-year institution once they have earned an associate degree from the two-year institution
* All institutions must demonstrate collaboration in implementing the new articulation and transfer policies set forth by legislation passed during the last legislative session by Senator Ben Nevers
* Meeting any additional performance goals set forth by the Board of Regents

LA GRAD Act Monitoring and Renewal

Governor Jindal said that in order to strike the right balance of increased autonomy and improved outcomes in higher education, the GRAD act also calls for the monitoring and optional renewal of these agreements.

The bill will call for the Board of Regents to annually monitor and report to the Legislature and the Governor on each participating institution's progress and they may revoke the agreement of any institution that fails to abide by the required terms of their agreement. The Board will also vote at the end of each six-year agreement period to renew each participating institution's performance agreement based on a review of progress in meeting the performance expectations.

The Board's approval will be based on the recommendation of a PERC-like panel, which will conduct a comprehensive evaluation of the institution's progress to ensure they have met their required goals and improved their outcomes for our students.

If institutions' performance agreements are renewed for FY 17-22 following the initial six-year agreement, they must:

* Continue to phase in policies to project graduation rate goals including a 75 percent rate for LSU, a 60 percent graduation rate for regional research universities such as ULL, La. Tech and UNO, and a 50 percent graduation rate for other four-year institutions like Southeastern
* Maintain graduation rates at the SREB average by institutional category as they strive to reach even higher graduation rates by FY22, and sustain progress in meeting all other goals set forth in their initial agreement
* Meet any additional performance goals set forth by the Board of Regents

If an institution's performance agreements are renewed for subsequent periods following their first renewal, they will be required to maintain the same graduation rates as they did for their first renewal and they must also sustain progress in meeting all other goals in their initial agreements, and meet any additional performance goals set forth by the Board of Regents.

As this legislation is drafted, some minimum expectations for Centers of Excellence will be established. A Center of Excellence is a program that:

* Is aligned with current and strategic statewide and regional workforce needs
* Has an established foundation of excellence as evidenced by high graduation rates, high numbers of graduates going into to workforce or graduate school, a high level of research productivity and funding, collaborations with business/industry, partnerships with K-12,or has earned national accreditation
* Is multi-disciplinary in nature
* Shows potential for future growth and increasing quality, as evidenced by prospects for external funding, projected enrollment growth, focus of emerging technology or need, high demand for future program graduates, capacity to stimulate regional/state economic development, and capacity to develop community outreach/partnerships
* Collaborates across several schools, agencies, private industries
* Has received a favorable academic assessment by the Board of Regents or the appropriate management board

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