TEMPE - Regents yesterday voted to push forward with plans asking lawmakers to increase state-based financial aid and reward universities for improving graduation rates.
Arizona Board of Regents and university presidents agreed that these and a variety of other new strategies for funding universities would emphasize the divergent missions of the UA, Arizona State University and Northern Arizona University while protecting poor students from the rising cost of education.
The regents voted unanimously to endorse the new mechanisms, which they hope will be approved and implemented by the Legislature and Gov. Janet Napolitano in two years.
They appeared optimistic that lawmakers would support their ideas, especially the incentives for improving graduation rates. Those, they said, would appeal to Republicans in control of the Legislature.
"We will be able to make a stronger case for the universities at the State Capitol," board President Chris Herstam said.
Regents also appeared open to the possibility that the state would gradually ramp up its contribution to a pool of financial aid, rather than tripling it in a single year as regents had recommended.
Such a dramatic increase, which would have totaled $6 million in a single year, had worried members of Napolitano's staff, who said it might be too much to ask from a state strapped for cash.
But regents and the governor's office agree that more state funds should be used for financial aid, which officials throughout Arizona's university system agree is critical to keeping universities affordable as tuition rises.
"There are people who do need access to discounts," said Regent Ernest Calder—n. "That's the only way they make ends meet."
The recommendations for performance incentives and financial aid increase came as part of a larger lobbying package, which also calls for recalculating the means by which universities count students. Over several years, that change could have a multimillion dollar impact on the amount of funding the universities receive for enrollment growth.
The proposal also asks lawmakers to fund infrastructure, not just building upkeep as it does now, and keep an open mind to funding new initiatives as they arise.
Combined, the financial packages could allow the universities to pursue their own missions while improving access for poor students by making about $13 million more in financial aid available by 2015, ASU President Michael Crow said.
"We want a high-quality university and quality costs money," he said.
The state offers universities money according to a complicated formula based solely on enrollment growth. But because that formula only rewards headcount, not graduation rates, it isn't as logical as the lobbying package approved by regents, which would fund the universities an additional $1,000 for every bachelor's degree it awards beyond the previous year's total.
"If the (current) formulas are respected, we get paid for activity, not results," UA President Peter Likins said. "(The new formula) would be a reward for improving the cost-effectiveness of higher education in Arizona."
However, the proposal doesn't completely disregard funding for enrollment growth. It asks lawmakers to continue giving universities more money as they grow, but also to recalculate how they count students.
That may seem like minor bookkeeping, but it could result in significant increases or decreases in funding depending on how well the UA follows its mission, which includes emphasizing research and teaching beyond the undergraduate level, Likins said.
The plan asks that the Legislature count lower-division UA undergraduates based on a 16-unit load, rather than 15 as the formula currently allows. Similarly, full-time graduate student would be taking nine units, rather than the current 10.
Because funding is based on full-time student enrollment, this change would reward the university for enrolling more graduate and transfer students and becoming more selective in admitting new freshmen.
If that change had taken effect this year, the formula would have dictated that the UA receive $1.3 million more than it would have under the current plan, assuming growth were calculated under the new formula.
Regent Christina Palacios lauded the package of plans, saying it contained several ideas that would sound appealing to lawmakers.
"We should move this forward to the Legislature with whatever sales points we have," she said.