Governor proposes Hoosier College Promise

TERRE HAUTE – Governor Mitch Daniels will ask the next Indiana General Assembly to approve the Hoosier College Promise, a program that would provide Indiana high school graduates with more affordable access to higher education.

The governor introduced this idea several months ago and has further developed the concept. The Hoosier College Promise would be available to Indiana students from families who earn about $60,000 or less annually. They would receive two years of free tuition at Ivy Tech Community College or an equivalent amount of $6,000 to use for their first two years at another college or university that is recognized by the State Student Assistance Commission of Indiana (SSACI). Students would be required to be enrolled full time and maintain a ‘C’ average in a degree program.

“Too many of our kids don’t believe they can go to college. Yet the jobs being created in the 21st century require skills and knowledge beyond a high school education. We seek to assure each Indiana high school graduate, as far up the income scale as we can reach, the chance to go to college for at least two years,” said Daniels.

Indiana ranks 44th among states for share of the adult population over age 25 who have a bachelor’s degree and 41st for share of working-age adults with an associate degree or higher. And 69 percent of Indiana high school juniors who are in families where there is no college graduate in the household do not think they can afford to go to college, according to a Commission on Higher Education study.

The Hoosier College Promise would supplement the more than $200 million in need-based financial aid provided through SSACI. For example, students from families with average incomes of $40,000 currently receive an average of $400 of need-based aid to attend Ivy Tech. The governor’s plan would make up the difference to $3,000 annually for each of two years. Students who attend four-year public or private universities generally receive larger grants from SSACI and would get less assistance from the Hoosier Promise program.

It is estimated the plan would cost about $50 million annually, once fully implemented. About 24,000 new high school graduates (incoming freshmen) are expected to receive a Hoosier College Promise award each year.

The governor said issuing bonds and repaying them with the growth in Hoosier Lottery revenues is one way to pay for the program. Another is to invite private companies to compete to manage the lottery. Daniels believes that at a minimum, a company would pay the state $1 billion up front for a 30-year agreement. If the state received a higher amount, more students would be eligible.

“With the Hoosier College Promise program, we can redeem the lost promise of the Hoosier Lottery. When it was created, Hoosiers were told it would be dedicated to education. It’s time to finally do just that, by putting part of our lottery proceeds in trust for college aid. We believe we can lower our high school dropout rate and increase our college attendance rate,” said the governor.

Ivy Tech has agreed to hold any tuition increase to the rate of inflation for at least five years, assuming consistent state support, and Daniels has challenged other Indiana colleges and universities to consider what they can do to keep tuition increases in check.

Background information

• 651,609 Hoosiers completed high school but have no college education (February 2008 Indiana Chamber of Commerce report Indiana’s Adult Education and Workforce Skills Performance)

• 524,029 Hoosiers have not completed high school (or equivalent) (Chamber report)

• Indiana ranks 44th among states for share of population over age 25 with a bachelor’s degree (Chamber report)

• Indiana ranks 41st among states for share of working-age adults with an associate degree or higher (Chamber report)

• Indiana lags the nation in first-year retention rates at public two-year colleges with only 49 percent staying in school (Chamber report)

• Approximately two-thirds of all students borrow money to pay for college. The average debt load for a student graduating with a bachelor’s degree has climbed to $20,000 up from $9,000 in 1993 (Commission for Higher Education, March 14, 2008, “Reaching Higher with Affordability”)

• Over the last 10 years (1997 to 2007) tuition at Indiana’s public four-year universities has risen an average of 105 percent – over the same period Hoosiers’ personal income grew by 44.2 percent and CPI (inflation rate) grew by 29 percent (Commission for Higher Education)

• 69 percent of Indiana high school juniors from families without a college graduate in the household and 40 percent with a college graduate in the household did not think they could afford to go to college (Commission for Higher Education)

Opportunities for Hoosiers

• Each year of education beyond high school enables an individual to increase annual earnings by 10 percent.

• Better education leads to better jobs. Forty-four of the state’s 50 “Hoosier Hot Jobs” in greatest demand require an education beyond high school.

• The Indiana Department of Workforce Development estimates that by 2014 there will be an additional 222,410 high-wage, high-demand Indiana jobs requiring a post-secondary degree.

• According to the 2007 Kauffman State New Economy Index, Indiana ranks 16th among the states for the “fastest-growing firms,” but ranks 43rd for workforce education level.

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