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Affordability Taskforce
Recommendations &
Summary Report
Presentation to the Montana Board of Regents
May 24, 2012
Data Points
Recommendations
System Initiative
MUS Strategic Plan
2
Data Point #1
State Funded Need-based Aid per Undergraduate FTE,
2009-10
source: National Association of State Student Grant and Aid Programs
$1,200
$1,000
$800
Nation
$600
$400
Montana
$200
$0
3
Data Point #2
Student Loan Debt
Average Loan Amount for First-time, Full-time Resident Students
(not including parent loans)
$8,000 70%
Avg Loan Debt % Borrowing 61%
$7,000 60%
$6,000 58%
55% 50%
$5,000 5,502
40%
$4,000
3,692 30%
$3,000 3,290
20%
$2,000
$1,000 10%
$0 0%
Academic Year Amounts = amount received in Fall and Spring semesters, does not include winter or summer sessions. source: MUS Data Warehouse
Average Loan = average amount received by students receiving Loans 4
Data Point #2 (cont.)
Average Loan Amounts for MUS Degree/Certificate Recipients
(average loan amounts of students who borrowed; no parent PLUS loans included;
borrowing activity 8 years prior to graduation; includes federal and non-federal loans)
30,000
2008-09 2009-10 2010-11
25,000 $23,894
$22,780
20,000
$18,075 $21,125
$17,375
15,000
$12,515 $16,166
$12,039
10,000
$11,627
5,000 % Borrowing
63% 63% 63%
60% 65% 63% 71% 69% 73%
0
Certificates of Associate Baccalaureate
Applied Science Degrees Degrees
source: MUS Data Warehouse 5
Data Point #2 (cont.)
MUS Student Loans - Total Amount Borrowed
Loan Amounts by Type
Ten Year
Subsidized Unsubsidized Other Total Change
$250,000,000
Total
$221M +$123M (126%)
$200,000,000
$150,000,000 SUB
+$37M (69%)
$100,000,000 UNSUB
+$60M (188%)
Other
$50,000,000 63%
+$27M (217%)
63% 73% (PLUS, private)
$0
source: MUS Data Warehouse 6
Data Point #3
Average Loan Amounts of Bachelor's Degree Recipients
MT vs. Nation, Public Institutions
(average loan amounts of students who borrowed)
25,000
Nation Montana $23,894
24,000
23,000 $22,780
$22,000
22,000
$21,125
21,000
20,000
$19,800
19,000
18,000
63% 63%
17,000
63% 56% ? borrow
borrow
16,000
55% borrow borrow
borrow
15,000
2008-09 2009-10 2010-11
source: MUS Data Warehouse, College Board, "Trends in Student Aid 2010"
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Data Point #4
Average Loan Amounts for MUS Bachelor's Degree Recipients, 2010-11
(average loan amounts of students who borrowed; no parent PLUS loans included;
borrowing activity 2002 - 2010; includes federal and non-federal loans)
by Pell Status
30,000
$26,315
25,000 $23,894
$19,814
20,000
15,000
% Borrowing 91%
1,906 / 2,105
63%
10,000 3,037 / 4,829 42%
1,131 / 2,724
5,000
0
Total Non-Pell Pell
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Data Point #4 (cont.)
Average Loan Amounts for MUS Associate's Degree Recipients, 2010-11
(average loan amounts of students who borrowed; no parent PLUS loans included;
borrowing activity 2002 - 2010; includes federal and non-federal loans)
25,000
by Age Range
$20,340 $20,309
20,000
$18,075
15,000 $13,664
% Borrowing
81% 78%
10,000 73% 360 / 459
64% 233 / 289
895 / 1,223 302 / 475
5,000
0
Total 18 - 24 25 - 29 30+
Age Ranges 9
Data Point #5
Retention & Graduation Rates
Full and Part-time Students Entering 4-year Campuses,
averages for 2002 – 2009 cohorts
source: Access to Success
Pell Recipients Non-Pell Recipients
80%
70% 74%
60%
67%
50%
40% 46%
30%
33%
20%
10%
0%
Retention Rates (1-yr) Graduate Rates (6-yr)
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Data Point #6
MUS Cohort Default Rates, 2008 – 2010
(2 year Rates)
16
14
12
10
Percent
8
6
4
2
0
UM-
MSU UM MT MSU-
MSUN MSUB HLN MCC UMW DCC FVCC
Boz Msla Tech GF COT
COT
2008 1.1 1.3 2.5 2.6 1.6 1.3 4.1 3.7 1 5.3 3.5
2009 1.7 2.9 4.6 5.8 3.1 6.6 7.1 2.6 2.6 10 6.5
2010 4.1 6.3 8.1 8.2 8.4 8.7 8.7 9.2 9.3 9.3 14.7
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Data Point #7
Cohort Default Rates, 2010
2-year default rate; includes borrowers who entered repayment
10-1-09 and defaulted by 9-30-11
16
14
12
Default Percentage
10
8
14.1%
6
4
7.1%
2 3.7%
0
GSL default rate MUS default rate Non GSL default rate
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Data Points (summary)
1. State funded need-based aid in Montana is low
2. Student loan debt and the percentage of students borrowing
continues to escalate
3. Loan amounts and % borrowing are higher than national average
4. Low and moderate income students incur higher levels of debt, as
well as non-traditional students at 2-year campuses
5. Retention and graduation rates are lower for low income students
6. Recent increases in default rates are reflective of students’
struggles to manage debt
7. Borrowers receiving default prevention services from MUS are
less likely to default
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Recommendations
1. Increase tuition assistance for low and moderate income
students.
2. Provide a system-wide, coordinated and collaborative financial
literacy effort aimed at students most likely to generate high
levels of debt.
3. Increase centralized default prevention efforts.
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System Initiative
Student Financial Aid & Services
Description:
Increase tuition assistance for Montana residents in order to
improve affordability and increase retention and completion
rates of lower and moderate income students, as well as provide
coordinated services that promote financial literacy and
increase default prevention.
15
System Initiative
Student Financial Aid & Services
Details:
Tuition Assistance
Increase funding for MTAP (MT Tuition Assistance Program – Baker
Grants), the MUS’s largest state funded need-based aid program
(allows campus flexibility to provide aid to middle income students)
MTAP appropriations total $1.9M/year and have not seen an
increase in over 10 years
Funding Request = $500,000 per year
16
System Initiative
Student Financial Aid & Services
Details:
Financial Literacy
Develop a coordinated and collaborative approach to financial literacy
that enhances and connects existing campus and system efforts
Assign Student Financial Services the responsibility for coordinating
efforts system-wide
Improve financial literacy material and on-line information, as well as
broaden scope to include K-12
Continue to utilize Affordability Taskforce as system advisory council
for financial literacy efforts
17
System Initiative
Student Financial Aid & Services
Details:
Financial Literacy – (Funding Request)
Develop and implement financial literacy “best practices” through a
competitive allocation of funds to the campuses; funded programs will
focus on at least one of these elements:
• Development of a “training the trainer” program
• Utilization of student interns or work study students as mentors
• Development and monitoring of early indicators of students with retention/completion
and financial issues
• Targeted literacy efforts for at risk students
= $200,000 per year
Central support and coordination positions; literacy materials/programs
= $150,000 per year
18
System Initiative
Student Financial Aid & Services
Details:
Default Prevention
Increase centralized default prevention efforts for students receiving
direct federal loans (students under FFELP program are currently
served by GSL)
Develop a plan for eventual phase out of default prevention services
for students receiving FFELP loans and work to ensure sustainable
services for direct loan students
Funding Request = $400,000 per year
(6 support positions, tracking system, research & analysis)
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System Initiative
Student Financial Aid & Services
Proposed Biennal Budget
Tuition Assistance $1,000,000
Financial Literacy $700,000
Campus Support $400,000
Central Coordination $300,000
Default Prevention $800,000
TOTAL $2,500,000
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MUS Strategic Plan
Goal #1 - Access & Affordability
Objective 1.2.1: Reduce the unmet student need for financial aid
(increase need-based aid)
http://www.mus.edu/data/StratPlan/5_Goal_1_Financial_Aid_2012.pdf
Objective 1.3.1: Decrease average loan amounts and the percentage
of students borrowing
http://www.mus.edu/data/StratPlan/6_Goal_1_Affordability_2012_NEW.pdf
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