October 15, 1999
The Honorable Tommy G. Thompson
Submitted herewith is the 1997-1999 biennial report of the State of Wisconsin Higher Educational Aids Board. This report has been prepared pursuant to Section 15.04 (1) (d) Wisconsin Statutes.
The report provides an analysis of the agency's 1997-1999 activities and accomplishments and describes goals and objectives for the 1999-2001 biennium.
Jane M. Hojan-Clark
HIGHER EDUCATIONAL AIDS BOARD
JUNE 30, 1999
Mike Clumpner - Delavan
INDEPENDENT COLLEGES & UNIVERSITIES
Jeremy Shea - Madison
Mary Beth Kornely - Manitowoc
Sarah Von Rueden - Madison
(Public Instruction Superintendent)
Designee: Paul Spraggins - Milwaukee
UNIVERSITY OF WISCONSIN SYSTEM
Gerard Randall - Milwaukee
Steve Van Ess - Madison
Brian Johnson - Madison
WISCONSIN TECHNICAL COLLEGE SYSTEM
Allen Schraufnagel - Portage
Mary Jo Green - Nekoosa
Rhonda Drachenberg - Cottage Grove
Jane M. Hojan-Clark (vacant) James Buske Lowell R. Maves
Division of Programs and Policy
Office of Administrative and Fiscal Services
Jane M. Hojan-Clark
Lowell R. Maves
The Higher Educational Aids Board is a part-time independent policy-making board composed of eleven members appointed to serve at the pleasure of the Governor. The Governor appoints one member from the Board of Regents of the University of Wisconsin System; one member from the State Board of the Wisconsin Technical College System; one member who is a trustee of an independent college or university to represent such independent institutions; one student and one financial aid administrator each from within the University of Wisconsin System, Wisconsin Technical College System and independent institutions; one citizen member to represent the general public; and the state superintendent of public instruction.
The Executive Secretary is appointed by and serves at the pleasure of the Governor. The Executive Secretary makes policy recommendations to the Board; carries out policy directives from the Governor, Legislature and Board; and is responsible for initiating and carrying out all administrative direction and responsibilities of the agency. The Deputy Executive Secretary serves outside the classified service at the pleasure of the Executive Secretary. All other permanent agency staff are in the classified service. During the 1997-1999 biennium, total agency staff did not exceed 13 individuals. The functional organizational chart of the agency reflects the most recent structure.
STATE OF WISCONSIN
HIGHER EDUCATIONAL AIDS BOARD
June 30, 1999
The agency's major operational responsibilities during 1997-1999 fell into four distinct categories, which include grant/scholarship programs, student loans, reciprocal agreements and tuition capitation programs. First, the administration of the state's student grant/scholarship programs includes the expenditure of over $110,546,978 during 1997-1999. All of these funds were secured from General Purpose Revenue tax funds (except for $1,596,233 in federal funds). The majority of these programs are based upon the federally determined student and/or parental contributions, and hence the financial need of the student recipients. Total awards exceeded 104,065 from over 332,388 Wisconsin resident undergraduates who applied for assistance during the biennium. Many, of course, applied for and were awarded assistance for both years.
HEAB continued the collection of outstanding loans for the following programs: Independent Student Grant (Loan); Minority Teacher Loan; Nonguarantee Loan; Nursing Student Stipend Loan; Paul Douglas Scholarship (Loan); and the Wisconsin Health Education Assistance Loan (WHEAL). Under the largest program, the WHEAL, virtually all accounts were in repayment status as of June 30, 1999 with only one borrower still enrolled. During the 1997-1999 biennium, the number of borrowers with outstanding principle owed was reduced from 224 to 115, and the principle owed from $6,723,881 to $2,295,695. As of June 30, 1999 the amount of bonds outstanding was $1,930,000. The final redemption date of these bonds is December 1, 2004.
In addition to student grants/scholarships and the collection of loans, HEAB's third major function continues to be the administration of the Minnesota-Wisconsin Reciprocity Program in conjunction with the Minnesota Higher Education Services Office. A total of 9,905 Wisconsin residents participated in the program in 1997-1998 by enrolling in Minnesota public institutions. The 1998-1999 total was approximately 12,899 residents.
Two tuition capitation agreements comprise the last major operational responsibility of the agency. The Board has tuition capitation agreements with both the Medical College of Wisconsin and Marquette University School of Dentistry. These agreements provide funds to the two institutions to train Wisconsin residents as physicians and dentists. During 1997-1999 the total appropriation on behalf of the Medical College was $4,105,100 and $1,167,000 for the School of Dentistry for resident student tuition capitation purposes.
In 1968, a rational and policy framework for Wisconsin's Student Financial Aid Structure was established. Today, in 1999, the rational and policy framework continue to operate. Essentially, there are two broad goals and seven operational policies which serve to implement the broader goals. The two broad goals, Universal Educational Opportunity and Educational Diversity or "Freedom of Choice," are looked upon as educational goals which can be achieved in part through the financial aid structure.
The first goal is to eliminate financial barriers and thereby insure an educational opportunity for all Wisconsin citizens commensurate with their desires and abilities. This goal suggests that it is the primary purpose of the student financial aid structure to insure an educational opportunity for all citizens commensurate with their desires and abilities regardless of their financial circumstances. This goal does not imply that the same educational experience need be provided to all students, but it does require that all students be given an equal opportunity to pursue an education consistent with their individual abilities, interests and ambitions. It has been recognized that if society is to achieve the goal of equality of opportunity it must first insure the equality of educational opportunities. As a result of the technological revolution, the knowledge explosion, and the development of a highly skilled and complex society, education has become the most important key to the "American Dream." The educational investment in human resources has a direct impact on the economic and technological development of the nation. This circular relationship between providing universal educational opportunity results in benefits which accrue to society in addition to those which accrue directly to the individual in terms of personal fulfillment and economic security. Every citizen has a right to participate in the economic, social, and political aspects of our society. Education provides the opportunity to exercise this right of full participation and, consequently, must be made equally available to all.
The second goal of the Financial Aid Structure is to support existing Educational Diversity by allowing students the freedom to choose among the various educational offerings. Educational Diversity implies a wide range of academic environments, programs, and course offerings as well as diversity in sponsorship e.g. public and private. A comprehensive educational environment is one which offers technical training in addition to collegiate programs not of the technical nature; one and two year programs as well as four year programs. The diversity issue generally concentrates on the need to preserve the strength and vitality of private schools of higher education for the following reasons:
In order to implement the two goals described above, the following operational policies were established to serve as the guideposts of the Financial Aid Structure.
To summarize, the State Student Financial Aid Policy Framework is as follows:
I. Goals of the Financial Aid Structure
II. Operational Policies
The Higher Educational Aids Board is now 35 years old having been created by statute on June 30, 1964 as the Commission for Academic Facilities. The original purpose of the board was to distribute federal campus construction funds. In September 1965, the name of the agency was changed by statute to the State Commission for Higher Educational Aids, with the present name being designated two years later. Along with the change of name came the assignment of the first grant and scholarship programs funded by the State. These programs were the outgrowth of the Governor's scholarship and Loan Committee of 1965. The two most important policies followed in the creation and the initial student aid programs were those of student financial need for determination of the eligibility and award amount, and that aid should be available to Wisconsin residents attending both public and private institutions of higher education. The Board also received responsibility for the State Student Loan Program in 1966 with the loans being made directly from State controlled funds.
The first ten years of the Board's existence can be viewed as a period of experimentation as well as growth. The agency became responsible for administering the federal Guaranteed Student Loan Program during this period as the federally funded construction and educational equipment programs came to an end. Many short-lived State programs were approved, operated for a few years and then were discontinued, all prior to 1976. They included virtually every concept of student assistance with the exception of employment. There were grants and loans for professional degree students; teacher training stipends and scholarships with repayment provisions if teaching wasn't actually done; and grants for minority and disadvantaged students. In all, eight programs were started and were either discontinued or merged into successor programs.
The effective end to this decade of change came with legislation that for the most part followed the findings of a Legislative Council Committee, which was requested by the Co-Chairs of the Joint Committee on Finance in 1974-1975. Programs were ended or merged and the grant structure the Board still administers today was put into place. Two large grant programs tied into the federal financial aid structure were the central feature, flanked by several smaller grant programs targeting additional aid to the most needy. Within a few years the State Loan Program was removed from State funds and student loans were made from bond issue proceeds. This program grew rapidly along with the parallel increase in private lender loans. By 1980, a second large loan program was created from bond funds, the Wisconsin Health Education Assistance Loan (WHEAL), with assistance going to dental and medical students enrolled in Wisconsin institutions.
The second decade came to an end in 1984 when the agency's Board, sitting in it's capacity as the Board of the Guaranteed Loan Corporation, voted to make the corporation independent of both the Higher Educational Aids Board and State Control. This was done and the agency was left with the grant programs, responsibility for the two loan programs and the number of staff returned to its level of 1966. Within the next two years, bond authority for the loan programs ran out and the agency withdrew from the business of making loans under these programs. This wasn't a problem for students since private lenders continued to make more loans than ever under both programs.
Since 1984, the agency has concentrated on better delivery of student grant aid and the collection of the remaining student loans for which it is responsible. In addition, several new aid programs have been added to the agency's mission and the concept of employment and forgiveness of loan repayment has returned. During 1991, the remaining State Student Loans were sold to a Cleveland, Ohio bank and the State's general fund received about $34,000,000 during 1991 and 1992 from the sale. HEAB no longer has any significant responsibility for these loans, which were made between 1973 and 1986.
The 1995-1997 State Budget (Act 27) would have eliminated the Higher Educational Aids Board and transferred their respective staffs, functions and appropriations to a new Department of Education, effective July 1, 1996. The Education Commission would have assumed the responsibilities of HEAB. Act 27 also eliminated the Council on Financial Aids, effective January 1, 1996. 1.25 FTE GPR program assistant positions and 2.60 FTE SEG program assistant positions were also eliminated from HEAB as a result of the proposed merger of HEAB with a new Department of Education. At the same time that 3.85 positions were deleted from HEAB, the agency was assigned two new programs, Delinquent Child Support and the University of Wisconsin's Minority Teacher Loan Program, and no GPR positions were restored to administer these new programs.
On March 29, 1996 the Supreme Court ruled that the provisions of the 1995-97 state budget relating to restructuring the governance of the Department of Public Instruction (DPI) was unconstitutional. The provisions relating to the elimination of HEAB and the transfer of their functions to the new Department of Education were neither included among the provisions challenged by the case, nor addressed by the Supreme Court in its ruling. According to a report by the Fiscal Bureau, Act 27 references to the New Department of Education which were not affected by the Court's decision should be interpreted as DPI and, therefore, DPI should be responsible for the administration of HEAB programs as funding of these programs was placed under DPI's Chapter 20 appropriation schedule.
The Joint Committee on Finance recommended that prior to July 1, 1996, the Department of Public Instruction enter into a memoranda of understanding with the Higher Educational Aids Board for the Department of Public Instruction to provide funding and staff in the 1996-1997 to carry out the functions of the board. Joint Finance also created a project position to serve as the Executive Secretary of the Higher Educational Aids Board.
In Executive orders #283 and #287, Governor Thompson established a Higher Educational Aids Council to oversee the implementation of the memorandum of understanding between the Department of Public Instruction and the Higher Educational Aids Board to carry out the functions of the Board and advise Board staff on the administration of the financial aid appropriations pursuant to Section 20.235 of the Wisconsin Statutes.
However, the legislature recreated the board in 1997 Wisconsin Act 27 and restored the Executive Secretary position. The Executive Deputy position was restored in the Budget Adjustment Bill.
One new financial aid program, the Teacher Education Loan Program, was established. In addition, a provision in the 1997-1999 budget expanded HEAB's Tuition Grant Program to include students enrolled at tribally-controlled colleges in the state. As a part of the 1997-1999 budget HEAB was also given administrative responsibility for the Educational Approval Board (EAB).
In December of 1997, the Joint Committee on Finance did approve 1.0 GPR program assistant 3 position under Section 13.10 Request for Supplemental Funds and Position Authority. The responsibilities of this position include administering the new Teacher Education Loan, processing financial aid refunds and providing assistance to the information systems programmer by performing various functions such as assisting in database development, maintaining the agency's web site and transferring data to and from the mainframe computer.
It is recognized that the staff of the Higher Educational Aids Board (HEAB) is small in number, yet the responsibilities the board has is extremely important to Wisconsin residents seeking a postsecondary education. Due to an extraordinary level of expertise and dedication, HEAB staff members have been able to meet the high expectations placed upon them by the Administration and Legislature. HEAB has been able to successfully carry out its mission to ensure that all students be provided equal access and diversity in obtaining a higher education and make certain the funds for each program HEAB administers are distributed in a fair, equitable, and timely manner.
Over the two year biennial period over $161,518,740 was distributed to over 125,268 Wisconsin students through programs administered by HEAB. Over 30% of all Wisconsin resident undergraduates were served by programs administered by HEAB. Undergraduate need-based state grant aid awarded by Wisconsin through HEAB was ranked 13th in the country in 1997-1998. Wisconsin, when compared to other states throughout the country, continues to maintain a similar proportion of aid for college students that it did ten years ago.
A number of goals were developed and implemented during the 1997-1999 biennial period in order for the agency to successfully carry out its responsibilities. First, communication throughout the higher education community needed to be expanded. To fulfill this goal, a monthly memo was developed for the Financial Aid Community to provide updates, ask for input, make requests, and for a multitude of other purposes. The correspondence is sent via email if there is access, or via fax if email is not available. Visits were made to colleges and universities throughout the state not just to gather input but also to provide information that was helpful to the every day processing within the Office of Student Financial Aid at the college or university. College aid administrators were invited to attend training workshops presented by HEAB staff held in the offices of the agency and at conferences sponsored by the Wisconsin Association of Student Financial Aid Administrators. HEAB continued to support, organize, and present at training workshops throughout the state for high school counselors. In the fall of 1998 the agency introduced a web site. The site address is: heab.state.wi.us. It includes program and contact person information, Board Reports, Monthly Memos, Statutes, Administrative Rules, links to other sites, and more. HEAB has not only expanded communication to high school counselors; college or university presidents, aid administrators, and admissions counselors; but the agency has also further developed its relationship with other agencies and organizations in order to provide Wisconsin residents with as much financial assistance related information as possible.
Another goal that was developed and implemented was the expanded use of technology to provide better service to the agency's customers. The use of more advanced technology in 1997-1999 drastically changed how the agency operated. Beginning with the academic year 1998-1999, HEAB no longer accepted tape or paper requests for record adds, changes or for vouchers. Data could only be submitted using File Transfer Protocol (FTP); email; or diskette. A "confirmation of transmission received" process (Data Receipt) that lets schools know when a record has been received by HEAB, along with the number of records, and the type of records, was implemented. A number of other initiatives were also started that once completed will improve turnaround time and save valuable resources. These initiatives include the establishment of an agency FTP site or an advantis hook up that will allow schools to retrieve data on a more frequent basis; the conversion of smaller programs administered by HEAB from a mainframe system to a PC based system; and the development of an electronic application that will initially be used for the Minnesota-Wisconsin Reciprocity Program. Another substantial initiative that has consumed a great deal of time and energy has been the Y2K conversion. Since our agency begins drawing data in for the next academic school year the winter before, it was necessary for us to examine the issue and begin work on the conversion prior to when it was necessary for many others. We have been consistently ahead of schedule.
Various other accomplishments the agency realized over the past two years include:
The reciprocal tuition fee is to be set at a rate not to exceed the higher of the Wisconsin or Minnesota resident tuition rates at comparable institutions and that this tuition rate be established in an Annual Administrative Memorandum of Understanding. The JFC voted to require HEAB to annually submit the proposed memorandum of understanding to the JFC for its approval under a 14-day passive review process. The JFC also specified that the memorandum of understanding would have to include the underlying reciprocity tuition policy, but would not have to indicate the actual tuition rates to be charged to participating students. The new agreement instituted and the JFC approved a "tuition gap charge" to be assessed to Wisconsin residents attending the U.M.-Twin Cities campus. The "tuition gap charge" equals 25% of the resident tuition differential between the Twin Cities and Madison campuses. The JFC approved the request that the agreement allow the administering agencies flexibility in making tuition changes, so that the specific changes relating to graduate student tuition and credit banding would be made in the Annual Administrative Memorandum of Understanding.
Beginning in 1998-1999, graduate students enrolled under the agreement at institutions in either state pay the higher of the two states' resident tuition rate. Beginning in 1998-1999, a Wisconsin resident attending a Minnesota institution pay the full-time rate if he or she is enrolled for 12 credits or more, rather than 15 credits or more, per term. The JFC approved the elimination of an expiration date for the Agreement. The Agreement is automatically renewed each year, unless modified with the consent of both states or is terminated. Changes to the agreement continue to be subject to approval by the JFC.
Annual Administrative Memorandums of Understanding with minor adjustments were submitted to JFC for its approval under the 14-day passive review since the agreement was implemented. Both memorandums were approved.
Finally, a goal was established and was carried out that related to the physical environment of the agency. The past two years documents, space, processes, and procedures were examined and organized. This has created a much more positive, efficient, and productive working environment.
A change that occurred during the past two years involves the Federal SSIG program (which partially funds the WI TIP Grant). It has been renamed the Leveraging Educational Assistance Partnership Program (LEAP). The program criteria did not change from what it was under SSIG. However, if funding is greater than $30 million, a Supplemental LEAP or SLEAP will become effective where the match requirement for funds above the $30 million will change to three to one. The SLEAP funds can also be used for a broader range of purposes compared to the LEAP funds.
The agency has had a very productive two years. Many goals have been accomplished. There are, however, a number of initiatives that have been started and it is expected that they too will be fully implemented within the next biennial period.
School of Dentistry
|Medical College of Wisconsin||$4,105,100||406||$3,996,036||396|
|Handicapped Student Grant||$109,286||73||$108,158||72|
|Indian Student Grant||$744,336||802||$731,581||866|
|Minority Retention Grant
- Independent Colleges & Universities
|Minority Retention Grant
- WTC System
|Talent Incentive Program Grant||$4,561,161||4,319||$4,820,644||4,408|
|Wisconsin Higher Education Grant
- UW System
|Wisconsin Higher Education Grant
- WTC System
|Wisconsin Tuition Grant||$17,462,100||9,788||$18,090,754||9,406|
|Minority Teacher Loan||$113,930||64||$232,852||127|
|Teacher Education Loan||$150,000||75||$234,000||125|
|MN-WI Reciprocity Program||$19,902,922||9,905||**||**|
|Academic Excellence Scholarship||$3,169,637||2,496||$3,130,328||2,586|
|*||These figures include refunds from the previous year received after the books were closed as well as partial or whole refunds received after the end of vouchering for that academic year.|
|**||Final figures not available.|
|***||Assumed 1997-1998 for 1998-1999 MN-WI Reciprocity Program.|
|Forgiven in Full||462||739||83||0|
|Paid in Full||2||47||8||1,259|
|Total Refund or Cancellation||5||31||1||0|
|ISG:||Independent Student Grant (Loan)|
|NSSL:||Nursing Student Stipend Loan|
|PD:||Paul Douglas Scholarship (Loan)|
|WHEAL:||Wisconsin Health Education Assistance Loan|
MAJOR PROGRAM GOALS AND OBJECTIVES OF THE
HIGHER EDUCATIONAL AIDS BOARD FOR THE 1999-2001 BIENNIUM
The Higher Educational Aids Board (HEAB) will continue to pursue its long-term commitment of providing opportunities for educational access and diversity in obtaining a higher education. It will continue to review its program policies and operational objectives for all state aid programs. HEAB will strive to expand its outreach in order to increase the awareness and knowledge of postsecondary educational opportunities and available financial assistance.
Goals and objectives that have been set for the Higher Educational Aids Board to carry out over the next two years are extensive. Primarily, the areas of focus will include statutory and administrative rules changes; program formula changes; the examination of an expansion of reciprocity programs with other states; formalizing policies and procedures; technological changes; the establishment of a statistical data base; the continuation of staff training and alternative work patterns; and addressing changes specific to the 1999-2001 biennial budget which are unknown at this time.
Statute revisions that were submitted to the Law Revision Committee in 1998, after a review of statutory language pertaining to HEAB, were sent on to the Legislative Reference Bureau for drafting and presentation to the Law Revision Committee. The changes include the deletion of obsolete language and minor revisions. It is the intention of the board to follow the process through providing whatever is necessary until the changes are enacted. It is also the intention of the board to review all administrative rules pertaining to HEAB and implement revisions and changes as necessary. An emergency rule change was recently made to the Minority Teacher Loan Program. The rulemaking order expands program eligibility to allow students who were eligible to participate under this program in the past, when it was administered by a different system, to continue to be eligible to participate in the future. Students who are enrolled at least half time and students who do not show financial need will be able to participate in this program. Current rules require that a student be enrolled full time and show financial need to be considered for participation. The process of permanently changing the rule has been started and must be completed within the 1999-2001 biennial period. The relatively new Teacher Education Loan Program must also have administrative rules approved by the legislature.
Each year the board is responsible for setting formulas that determine awards for the two Wisconsin Higher Education Grant Programs and the Wisconsin Tuition Grant Program. In the most recent past each program had two models, a dependent student model and an independent student model, within each formula. The board will begin taking steps during this biennial period to collapse the two models into one for the Wisconsin Higher Education Grant Program.
Currently HEAB has a reciprocal agreement with the state of Minnesota along with various agreements between some Technical Colleges and neighboring counties in bordering states. The board will examine whether or not to expand participation in reciprocal agreements with other states or to expand existing agreements.
HEAB has begun the development of a policy and procedure manual that can be used by administrators within the colleges and universities that participate in the programs HEAB administers. This will be completed along with an internal policy and procedure manual to be used by HEAB staff members.
Numerous technological related initiatives began during the last biennial period that will be completed during the 1999-2001 biennial period. First, the Y2K conversion will be complete prior to the year 2000. The conversion of smaller programs HEAB administers from a mainframe system to a PC system will continue to occur over the next two years. In an effort to further eliminate paper and to provide quicker response, paper notification lists that are sent to the college and university financial aid administrators will be offered in electronic form to all schools. Work on providing an advantis hook-up to financial aid administrators in order to provide data to schools on a daily basis has already begun. It is expected that this service will be made available within the 1999-2001 period. Work has also begun on developing an electronic application for the Minnesota-Wisconsin Reciprocity Program. Once implemented, the electronic application concept will also be applied to other programs HEAB administers. Since more colleges and universities are moving to individual student accounts, HEAB will investigate and potentially implement the option of electronically transferring funds what is referred to as EFT. The agency will continue to review all of its computer applications and make changes as necessary in order to provide the best service possible.
HEAB has always collected and analyzed data related to postsecondary education student financial aid. The agency expects to expand this area in 1999-2001.
The agency made a significant effort during the 1997-1999 period to provide training for staff members. This effort will continue during the next two years. The agency also encourages the utilization of Alternative Work Patterns (AWP) such as flex-time, part-time, and shared time schedules to increase productivity, extend services, reduce absenteeism, improve employee morale, allow for employee development and to maximize energy conservation through ride sharing and use of mass transit systems. The agency recognizes AWP schedules may provide opportunities for individuals to productively utilize their skills, talents, and abilities. It recognizes that a traditional full-time work schedule may not meet the needs of individuals who, due to age, health or family circumstances, find such a schedule in conflict with responsibilities outside of work. The agency has an AWP policy that is supported by AWP related statutes and rules.
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