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University presidents to unveil ideas for new funding model, parity

University presidents are set to unveil their plans for meeting Legislative mandates aimed at ending decades of funding disparities among the three state universities and lifting Arizona from the bottom of financial aid providers in the nation.

There is agreement among the universities, Board of Regents and Legislature that funding per student among the three universities has been significantly out of balance for years, a condition that has created longstanding tension between Arizona State University, University of Arizona and Northern Arizona University.

Some of the reasons for the tension include vastly different growth rates for each institution, different missions for each and an unofficial, long-standing political funding formula that awarded ASU and UofA equal amounts of whatever the Legislature appropriated while Northern Arizona University got half the amount.

NAU President John Haeger recently reported that for fiscal year 2011, there was a gap of $800 to $900 per full time student between UofA, the highest per student, and ASU, the lowest per student. ASU reported a spring 2011 enrollment of 65,295, UofA, 35,527, and NAU, 21,513.

According to a Joint Legislative Budget Report generated for an ASU working group of lawmakers, ASU got $4,521 per full time student in fiscal year 2012 while UofA got $7,420 and NAU got $4,731.

“When you start connecting a particular amount per student it’s going to definitely be in the tens of millions (of dollars),” said Tom Anderes, Board of Regents president.

Getting to a parity figure that all of the university presidents and their respective budget offices can agree on is the challenge, especially since the institutions are vastly different. UofA, in particular, has a medical school that costs more to operate per student than a typical university program.

Anderes said he and the presidents right now are working on how to account for the differences.

“When we get to the board meeting we should be really, fairly well complete on that, which then can drive to some conclusions on what those funding differences are, what the larger number is that will indicate an amount we would be looking at as a funding request over X number of years,” Anderes said of the Aug. 4-5 meeting. “We would see this as identifying a long-term fix as far as whatever differences exist.”

Rep. Bob Robson, a Chandler Republican who was on an ad hoc committee that studied the disparity issue in 2008, said past legislatures failed to address the problem because of its magnitude.

“It’s just continuously grown and grown and grown to the point it’s like there’s a helplessness of how do we deal with it,” Robson said. “Through the legislative process in the last Legislature people said OK, they came to grips there is a problem and we want to charge the people at the universities with how to deal with it, how do you take care of it.”

The charge, or mandate, came in the form of a provision in the higher education reconciliation bill, SB1618, which also gives the Board of Regents the task of recommending a plan for a new financial aid system and recommendations for implementing a funding system based on performance.

The regents had already been at work on the latter mandate for years and a consultant last month submitted a plan that will serve as the foundation for legislation. The plan calls for scrapping the current system of funding based on enrollment in favor of one where funding is based on increases in the number of degrees students earn, increases in credit hours and increases in outside funding from research and public service.

Daniel Scarpinato, spokesman for House Speaker Andy Tobin, said the mandates were “caucus-driven.”

“What the caucus wanted was for the regents to start looking down the road of how to do higher education reform and mapping out what it might look like,” Scarpinato said.

Robson said former House Speaker Kirk Adams was instrumental in bringing forth the legislation.

Tobin is also supportive of the effort and he’s been meeting with regents to help with the progress.

“The goal is to provide equity throughout the university system in a way that benefits students in all parts of the state,” Scarpinato said.

The final mandate calls for a “student-centered financial aid model.” By that, Scarpinato said, the Legislature wants a system where the money follows the student.

All are in agreement that Arizona regularly is one of the bottom dwellers when it comes to state-funded financial aid.

Seventeen percent of all tuition revenues are earmarked for financial aid. There is also the Arizona Financial Aid Trust Fund, which is funded by a 1 percent fee on tuition paid by resident undergraduates, interest and Legislature appropriations.

In all, the universities provided about $366 million in financial aid in fiscal year 2010 while the state provided about $16 million, a sliver of the $1.5 billion financial aid pie.

Anderes said the regents and universities are still gathering data and comparing systems from around the nation, but there’s going to be discussions on whether to go with a system in which money is transferable to the different universities if the student moves to another school.

“A part of what we’re going to try to convey is that there are different ways to transmit aid, whether it is centrally or whether it is directly to the student or from the university,” Anderes said. “One of the points we’re going to make is that given the amount of funding we are getting from the state, we are looking for an increased commitment from the state for financial aid. That will undoubtedly be one of the conclusions.”

Anderes said there will be more work on the proposals after the presidents present them, but the expectation is to incorporate them into the next budget proposal in October.

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