Lumina Foundation Selects Montana as One of 11 States To Receive Grants – To Help Graduate More Students by Making College More Efficient, Cost-Effective

As states cut their budgets and students and families bear more of the cost of a college education, Lumina Foundation for Education http://luminafoundation.org/ today announced that Montana has been selected as one of 11 states to receive a grant to improve cost-effectiveness, access, and affordability in higher education. State leaders will develop and implement policy changes that promote productivity in higher education through cost-saving strategies for delivering high-quality education to greater numbers of students.

Montana and the 10 other participating states (Arizona, California, Colorado, Indiana, Maryland, Mississippi, Ohio, Tennessee, Texas and Wisconsin) will receive a one-year grant of $150,000 through the foundation’s Making Opportunity Affordable (MOA) initiative to develop innovative strategies in key policy areas to promote sustainable improvements in productivity. The states will be eligible to compete next year for a $2-million Opportunity Grant to implement their plans over four years.

Montana has been working in recent years to promote its two-year colleges as affordable, student-focused environments where students can complete the first two years of a bachelor’s degree or receive the academic and technical preparation for high-wage, high-demand jobs in healthcare, construction, energy-related technologies, and many other fields. In spite of differences in tuition, fees, and living expenses that make enrolling in Montana’s two-year programs approximately twice as affordable as enrolling in the same courses in Montana’s universities, the percentage of college-going students in Montana going to two-year colleges is less than half of the national average.

Montana’s MOA proposal, developed by a team representing the Governor’s office, the Montana Legislature, the Office of the Commissioner of Higher Education and the Office of Public Instruction, is designed to increase two-year college enrollments by coordinating the programming of Montana’s two-year colleges, promoting two-year education, and using technological innovations and a consortium approach to make two-year education accessible “in every corner of the state.”

“It is essential that Montana meet the challenges of higher education in the 21st century,” Governor Brian Schweitzer said. “While we have taken substantial steps, we can do more to make students aware of the great opportunities that two-year colleges provide, both for good-paying jobs and for successful transfer to a four-year college. I am pleased that Lumina Foundation has committed resources to help us improve access and affordability for two-year education in Montana.”

The $45.5 million Making Opportunity Affordable initiative seeks to advance policy innovation and change in higher education finance, management and instructional delivery to get many more students into and through postsecondary education. Lumina Foundation believes that systems and institutions that show a willingness to increase productivity are more likely to receive the additional investments of public money that will be needed for the United States to maintain an internationally competitive workforce and economy and to preserve the benefits of American society.

The United States spends about twice as much as the average industrialized country per student on higher education, not including research spending, and it is graduating students at a higher cost than other nations. The United States is now tied for 10th internationally in the percentage of adults 25 to 34 who hold college degrees. Worse, the United States now ranks 15th among nations in the proportion of college students who start work toward degrees and actually complete them, leaving many students with piles of student loan debt and nothing to show. Meanwhile, the cost of attending college has risen more rapidly than household incomes, and the availability of financial aid has not kept up with tuition increases.

“We need to take a harder look at how public colleges are prioritizing and managing their resources. Current spending patterns are not sustainable in the face of rapid demographic shifts, rising costs on campuses, and increased competition for state budget dollars,” said Jamie Merisotis, president of Lumina Foundation. “We must find ways of increasing productivity on our nation’s campuses to raise U.S. degree-attainment rates, which have remained stagnant in recent decades. And we need to explore and invest in new models for delivering a college education, especially if these models can help the United States graduate more students who face financial and academic challenges.”

State Strategies for Productivity Enhancement & Innovation

During the initiative’s 2008-09 national “Learning Year,” governors, legislators and leaders of colleges and universities will refine and develop strategies to increase productivity and explore policy changes and innovations in three areas:

1. Recasting state finance systems to reward institutions for graduating students, not just enrolling them. In many states, public money appropriated to operate colleges and universities is based mostly on how many students have enrolled and how much was budgeted for the prior year, rather than on how many students actually complete courses and academic programs. Indiana, Ohio and Tennessee will explore innovative ways of financing college based on completion and graduation.
2. Increasing the efficiency and cost effectiveness of academic programs and administrative operations. Here, states and the colleges and universities they support are mostly embracing incremental approaches. What’s needed is more rapid and widespread adoption of promising cost-saving practices and a much greater willingness to scrutinize the way colleges and institutions do business. For example, Colorado will renegotiate fee-for-service contracts to include measurable productivity objectives and will accelerate efforts to re-enroll adults who have fewer than 30 credits remaining to complete work on a credential. In addition, Mississippi will use technology more effectively to redeploy faculty and staff to reduce the costs of delivering large-lecture courses. The state will create a remedial math course at its public two- and four-year institutions to replace existing math coursework that is not meeting students’ needs, and it will pay for the effort by reallocating resources.
3. Creating or expanding new models of delivery to serve more students by targeting lower-cost institutions. Arizona will create a new type of institution that offers only bachelor’s degrees for students who begin their college studies at two-year institutions. Similarly, Montana will promote college enrollment and degree completion in a new networked consortium of technical and community colleges that is convenient for students who live far away from population centers.

States receiving the initial, $150,000 grants will be eligible to apply for the larger grants next year. In the fall of 2009, Lumina will award grants of $2 million each to as many as five states whose plans hold the greatest promise to bolster higher education productivity.

The nation’s economic crisis will make the Foundation’s effort more challenging and potentially more beneficial to states, which are bracing for some of the most severe cuts in general fund spending in three decades.

There are no budget surpluses available to help boost participation and degree-completion rates in higher education. “If the challenges of prior economic slowdowns have taught us anything, it’s that the absence of new money can make possible change that wouldn’t otherwise be possible,” said Merisotis, Lumina’s president.

Lumina Foundation for Education http://luminafoundation.org/ , an Indianapolis-based private foundation, strives to help people achieve their potential by expanding access to and success in education beyond high school. Through grants for research, innovation, communication and evaluation, as well as policy education and leadership development, Lumina Foundation addresses issues that affect access and educational attainment among all students, particularly underserved student groups such as minorities, first-generation college-goers, students from low-income families and working adults. The Foundation bases its mission on the belief that postsecondary education remains one of the most beneficial investments that individuals can make in themselves and that a society can make in its people.