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Reports from Policy Analysts

Focus on Oregon: budget and free community college

Submitted On: Monday, March 6, 2017

Analyst: Paraskevas, Cornelia

Oregon is facing two important issues with significant implications for Higher Education:

-the budget shortfall

-the Oregon Promise

Budget Shortfall

In the current biennium (2017-19) the state is facing a $1.7 billion shortfall due to reduced federal funding, increases in the cost of state services and mandates from the state’s November ballot.  Efforts to close the gap and fund education, health care, and senior services –such as Ballot Measure 97 (Oregon Corporate Tax Increase)—failed in the November ballot.

Included in the expenditures for the education budget (19% of total budget) are school funding (11%), and Higher Education (4%), as well as other education programs(4%).  For public universities and community colleges, support will be maintained at the 2015-17 level ($667.3 million and $550 million, respectively).  For higher education, the allocated funds are $100 million less than needed to maintain the current level of services;  as a result, the public universities are projecting a tuition increase between 5 and 10%. (The University of Oregon has already raised tuition by 10.6% for the next academic year).  For community colleges, the budget gap is $80 million and it will result in tuition increases for the upcoming year.

Oregon Promise

During 2015, the Oregon Senate passed bill 81 which established the Oregon Promise –a program available to Oregon residents who finished high school with at least a 2.5 grade point average or obtained a GED and enrolled in a community college at least part-time within six months of finishing high school.  The program, funded with $10 million for the current academic year covers tuition cost for up to 90 credits (two years of enrollment);  grants range from $1,000 to $3,248 per year.  Demand exceeded projects:  6,800 students (44% first generation college students;  3,141 Pell Grant recipients ) enrolled in various programs. 

Two ‘controversies’ surround Oregon Promise: family income of Oregon Promise students;  and the effect of Oregon Promise on university enrollment:

During the first year, students in higher income levels (expected family contribution ranging from $8,600 to above $19,000) received 60% of the Oregon Promise funding since it is a “last-dollar program” that covers college expenses after federal and state grants have been taken into account.   In contrast, 17% of the Oregon Promise funding went to students with expected family contribution ranging from $0 to $2,700, while 23% of Oregon Promise funding went to students with family expected contribution of $2,700 to $8,600.

During the current academic year, there was a .5% decline in enrollment at the state’s public institutions (17.6% of high-school graduates enrolled in universities during 2016-17 compared to 18.3% in 2015-16).   Whether the decline can be attributed to Oregon Promise is unclear;  data  from the second term of the Oregon Promise will be used to establish the connection between declining university enrollments and the Oregon Promise.

Sources:

The First Term of the Oregon Promise (SB-81-Report-Oregon-Promise-1st-term-2016.pdf)

 

2017-19 Governor’s Budget (https://www.oregon.gov/das/Financial/Documents/2017-19_gb.pdf)

 

League of Women Voters of Oregon (http://lwvor.org)

 

Fulfilling the Promise?  Early Findings on Oregon’s New College Grant Program  (http://educationnorthwest.org/)

 

Academic Level

Higher Education

State

Oregon

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