ERIC ED490172: Iowa Tuition Grant Legislative Policy Report

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IOWA COLLEGE STUDENT AID COMMISSION

Iowa Tuition Grant Legislative Policy Report

January 26, 2006

Contact:

Keith Greiner, Ed.D.
Research Director/Legislative Liaison
Iowa College Student Aid Commission
200 10th Street, Fourth Floor
Des Moines, IA 50309
IOWA COLLEGE STUDENT AID COMMISSION
Iowa Tuition Grant Legislative Policy Study
Report
January 26, 2006

Following is a report provided to members of the Iowa General Assembly in fulfillment of
a requirement of 2005 Iowa Acts Chapter 169, Sec. 3. (Iowa Acts, page 640). The
report includes a summary of findings and recommendations, followed by details
of the findings and the study process.

Questions about the project may be directed to Karen Misjak, Executive Director,
or Keith Greiner, Research Director and Legislative Liaison, Iowa College
Student Aid Commission, 200 10th Street, Des Moines, IA 50309, (515) 242-
3344.

An electronic copy of this report is available on the internet at:
http://www.iowacollegeaid.org/researchers/Other_Reports/ICSAC_Report_to_Ge
neral_Assembly--1-31-2006.pdf

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IOWA COLLEGE STUDENT AID COMMISSION
Iowa Tuition Grant Legislative Policy Study
Report
January 26, 2006

Summary

In 2005, the Iowa General Assembly directed the Commission to develop policy
recommendations for the protection of educational consumers at institutions that
provide Iowa Tuition Grants. This report provides findings and recommendations
of the Commission.

Findings from study suggest that Iowa not-for-profit colleges and universities and
proprietary colleges and universities serve different student demographic groups
summarized below.

For-Profit
Demographic Group Not-for-Profit Proprietary
High School Equivalency 2.0% 18.5%
High School Diploma 98.0% 81.5%
Pell Recipients (Low Income) 26.4% 75.3%
Independent Students (Non-Traditional) 31.6% 76.1%
Similar to
Cohort Default Rate Community
Colleges

The Commission observed that the study is a continuing work-in-progress.
Additional data have been added as they became available after the Commission
meeting of January 17, 2006, and additional data are expected to become
available in the future as the items collected for this report are refined. The
Commission expects to conduct an improved survey of colleges and universities
in the fourth quarter of 2006, and will continue to seek sources that remove the
burden of reporting from institutional officials. Staff is hopeful that in the coming
year, the U. S. Department of Education will provide cumulative default rate data
that will be an improvement over the two-year cohort data that are currently
available. There is also a need to examine the educational mission of Iowa
institutions. Commissioners believe that in the coming years, long-term trends
should be developed to inform future policy-making activities.

The Commission made the following three recommendations:

I. Submit all collected data to the General Assembly with an item-by-
item analysis of the findings (page 3).

II. Propose a plan for future data collection and analysis (page 5).

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III. Consider recommending development of a state student record
system to provide key data items that are relevant to the evaluation
of state student financial aid funding, including cumulative student
loan default rates (page 5).

Information about the three items is provided in this report. The report includes a
summary of the study process beginning on page 6 and summary tables of
collected data begin on page 10.

Details

I. Item-by-Item Analysis

The General Assembly directed the Commission to consider seven items
when making a recommendation. This section provides a list of each of
the seven items and the Advisory Committee comments on each item.

1. Percentage of students enrolled at each institution who have high school
graduation diplomas.
2. Percentage of students enrolled at each institution who have high school
equivalency diplomas.

Items 1 and 2 were considered together.

There is a difference between the high school diploma and high school
equivalency characteristics of not-for-profit colleges and universities and
proprietary colleges and universities. Not-for-profit institutions have an
average of 98% of students with high school diplomas, while proprietary
intuitions indicate 81.5% of students. Conversely, not-for-profit institutions
have about 2% of the students with high school equivalency, while proprietary
institutions have 18.5% of the students.

In future surveys, the definitions for transfer students will be clarified, and
additional information will be collected about transfer students with associate
degrees.

The data suggest a need for an analysis that links the high school diploma
and high school equivalency data with outcomes of the college experience.

3. Percentage of low-income students.

Not-for-profit and proprietary colleges and universities serve different
markets. Pell recipients are 26.4% of the student population at not-for-
profit institutions, and 75.3% of the proprietary student population. This
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difference in family financial status among the students at the various
institutional types is typical of several categories including admissions
standards, self-selection, and socioeconomic status.

4. Percentage of non-traditional students enrolled at each institution.

The survey of colleges and universities used a “non-traditional student”
definition published by the U. S. Department of Education National Center for
Education. The definition suggests that a person is a non-traditional student if
he or she meets at least one of the following criteria.

• Delays enrollment (does not enter postsecondary education in the
same calendar year that he or she finished high school);
• Attends part time for at least part of the academic year;
• Works full time (35 hours or more per week) while enrolled;
• Is considered financially independent for purposes of determining
eligibility for financial aid;
• Has dependents other than a spouse (usually children, but
sometimes others);
• Is a single parent (either not married or married but separated and
has dependents); or
• Does not have a high school diploma (completed high school with a
GED or other high school completion certificate or did not finish
high school).

Tabulations of the responses suggest college and university officials have
difficulty responding to the question because existing record-keeping
systems do not capture these data elements. Many officials estimated the
number of non-traditional students or used alternate definitions that were
easily obtained from their data systems.

Iowa Tuition Grant Study Committee members recognized the difficulty of
using the USDE definition and suggested that future surveys limit the non-
traditional data to a well-defined proxy for dependent vs. independent
student as defined by and reported on the Free Application for Federal
Student Aid (FAFSA). The percentage of dependent students is an
indicator of traditional students and the percentage of independent
students is an indicator for non-traditional students. For the 2005 – 2006
academic year, not-for-profit institutions reported an average of 31.6%
independent and proprietary institutions reported an average of 76.1%
independent students.

5. Graduation rate.
6. Job-placement rate.

Graduation rate and job-placement rate data were considered together.
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The survey requested graduation rate based on data provided by the National
Center for Education Statistics and job-placement rate for individuals who
were employed in a related field.

The graduation rate data have been collected for many years, using well-
established criteria. Graduation data are derived from internal institutional
databases that have been designed for that purpose. Job placement data,
however, are difficult for college and university officials to obtain as they
require follow-up contacts and surveys that receive significantly less than full
response. Committee members suggested that future data efforts might be
improved if the post-graduation data were to include only data on individuals
employed in any field. Even with that change, some institutions may have
difficulty providing job placement data.

7. Institutional cohort default rate.

The institutional cohort default rates for proprietary institutions appear to
be similar to those of community colleges and additional comparative
information is needed. Additional studies are necessary to examine the
relationship between cohort default rates, student need-levels and post-
graduation employment. Since the cohort default rate includes only a
two-year window of repayment, there is a need to seek total cumulative
default rate information.

II. Plan for future data collection and analysis

The plan for future data collection and analysis includes two components. First,
the Committee recommended that the survey be repeated with changes that
clarify definitions and improve questions. The survey should continue to include
pre-entered data that are available from Commission sources so that college and
university staff are required to provide only those items which cannot be obtained
from any other source.

Future analyses might include comparisons of key outcomes data (i.e.:
graduation rate, employment and default rate) with input data including high
school completions, family income characteristics, institutional mission, and
admission standards.

III. State student record system.

Studies of the relationship between input variables and student outcomes can be
improved through examination of characteristics of individual students. The Iowa
College Student Aid Commission currently maintains student records for state aid
applicants and FFELP borrowers. These data do not include key variables that
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were identified as necessary for the evaluation of Iowa Tuition Grant policy. If
Iowa were to create a mandatory state-level student record database, to include
the seven items analyzed above and other essential data elements, the data
could be combined with existing data stored at the Commission and outcomes-
based policies could be recommended.

IV. Iowa Tuition Grant Study Process Summary

This section summarizes the sequence of events and the people involved in the
preparation of this report. Commission staff appreciate the cooperation and
support that all stakeholders provided to arrive at consensus.

In 2005, the Iowa General Assembly directed the Commission to develop policy
recommendations for the protection of educational consumers at institutions that
provide Iowa Tuition Grants.

The directive was published in 2005 Iowa Acts Chapter 169, Sec. 3. (Iowa Acts,
page 640) The language directed the Commission to develop “recommendations
for a policy regarding the protection of educational consumers for inclusion in the
definition of accredited private institution.” The recommendations were to be
developed in consultation with proprietary schools and were to include, but were not
limited to, the following items:

• Percentage of students enrolled at each institution who have high school
graduation diplomas,
• Percentage of students enrolled at each institution who have high school
equivalency diplomas,
• Percentage of low-income students,
• Percentage of non-traditional students enrolled at each institution,
• Graduation rate,
• Job-placement rate,
• Institutional cohort default rate.

The development of policy recommendations was delegated by the Commission
to an Iowa Tuition Grant Policy Study Committee with the following members.

Michelle Durand-Adams, Commission Chair
Janet Adams, Commissioner
Janice Friedel, Iowa Department of Education and Commissioner
John Hartung, Iowa Association of Independent Colleges and Universities
and Commissioner
Tim Cole, Hamilton College and Kaplan University
Karen Misjak, Commission Executive Director
Julie Leeper, Commission Staff
Keith Greiner, Commission Staff

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In an effort to collect appropriate information for the formulation of policy, the
Committee directed staff to convene a committee of technical experts with
representatives from large, medium, and small not-for-profit, private colleges and
universities, plus the Hamilton and Kaplan proprietary institutions. Members of
the Technical Advisory Committee were as follows:

Drake University
Susan Ladd
Nancy Geiger
University of Dubuque
Tim Kremer
Janet Shpeherd
Waldorf College
Duane Polsdofer
Cindy Carter
Hamilton College
Cathy Gomez
Katie Matt

In a meeting held on November 1, 2005, members of the Technical Committee
suggested that the policy recommendation be based on responses to a set of
questions that focused specifically on the seven items identified by the General
Assembly. The questions were designed to help college and university officials
respond in a timely and accurate manner, limiting the data collected to one year
of data aggregated to the institutional level. Data already available at the
Commission were pre-entered into the questionnaire and confirmed by the
responding institutions. The following table shows the seven topics and the
sources that were used.

Data Element Source
Graduation rate Commission
Cohort default rate Commission
Percentage enrolled with HS diplomas Colleges and universities
Percentage enrolled with GED’s Colleges and universities
Percentage of low-income students Colleges and universities
Percentage of non-traditional students Colleges and universities
Job placement rates Colleges and universities

For preparation of this report, financial data were added from reports by not-for-
profit institutions from the most recent survey conducted by the U. S. Department
of Education National Center for Education Statistics (NCES), Integrated
Postsecondary Education Data System (IPEDS). Proprietary institutions such as
Hamilton College and Kaplan University are not required by the NCES to report
the detail requested by IPEDS and agreed to provide comparable data for use in
this policymaking process.

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From survey responses provided by Iowa colleges and universities, Commission
staff assembled the following tables that are presented in Appendix B.

Table Title
1 Enrollment Reported for the Iowa College Enrollment Report: Fall 2005
2 Iowa Tuition Grant Recipients and Awards: FY 2004 - 2005
3 High School Graduation Characteristics: Fall 2005
4 Low Income Students (Pell Recipients): Fall 2005
5 Non-Traditional Students: Fall 2005
6 IPEDS Graduation Rate and Employment in Related Field: Fall 2005
7 USDE Two-year Cohort Default Rates: Fall 2003
8 IPEDS Balance Sheet Items: 2003 - 2004 Fiscal Year
9 Historical Undergraduate Headcount Enrollment
10 Historical Undergraduate Full-Time Enrollment
11 Historical Undergraduate Percent Full-Time
12 Historical Undergraduate Part-Time Enrollment
13 Historical Undergraduate Percent Part-Time
14 Student Body Profile
15 Location of Alumni
16 Undergraduate Student Expenses

On January 12, 2006, members of the Iowa Tuition Grant Policy Study
Committee examined the data collected from the survey of participating Iowa
colleges and universities, and formulated the three recommendations that are
presented on page 2 of this report.
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Appendix A

2005 Iowa Acts Chapter 169, Section 3.
Language from House File 816

2 24 Sec. 3. COLLEGE STUDENT AID COMMISSION STUDY == STATE AID
2 25 FOR STUDENTS ENROLLED IN ACCREDITED PRIVATE INSTITUTIONS. The
2 26 college student aid commission shall develop, in consultation
2 27 with representatives from accredited private institutions
2 28 whose income is not exempt from taxation under section 501(c)
2 29 of the Internal Revenue Code, recommendations for a policy
2 30 regarding the protection of educational consumers for
2 31 inclusion in the definition of "accredited private
2 32 institution" under section 261.9. It is the intent of the
2 33 general assembly to consider such a policy as it might apply
2 34 to private institutions whose income is not exempt, and those
2 35 private institutions whose income is exempt, from taxation
3 1 under section 501(c) of the Internal Revenue Code. In
3 2 determining its recommendations, the commission shall include
3 3 a review of information that includes, but is not limited to,
3 4 the percent of students who are enrolled in each institution
3 5 who have high school graduation diplomas, the percentage of
3 6 students enrolled in each institution who have high school
3 7 equivalency diplomas, the percentage of low=income students
3 8 enrolled in each institution, the percentage of nontraditional
3 9 students enrolled in each institution, the graduation and job
3 10 placement rates of each institution, and each institution's
3 11 official cohort default rate, which is released annually by
3 12 the United States department of education. The commission
3 13 shall submit its findings and recommendations to the governor
3 14 and the general assembly by January 10, 2006.
`

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