SF 2029 (LSB 5208XS (6) 85)

SENATE FILE 2029

BY  BOLKCOM

A BILL FOR

An Act directing the state board of regents and the department of education to convene a commission to study financing strategies for the state’s public postsecondary institutions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  STUDY OF FINANCING STRATEGIES FOR PUBLIC POSTSECONDARY INSTITUTIONS.
   1.  The state board of regents and the department of education shall convene a commission consisting of representatives of the community colleges and the institutions of higher education governed by the board to study financing strategies, as described in this section, for the state’s public postsecondary institutions.
   2.  a.  The commission shall study the feasibility of establishing the alternative payment pilot program described in paragraph “b” to replace the current system of charging students tuition and fees for enrollment at public institutions of higher learning. The commission shall, at a minimum, review the following:
   (1)  Potential short-term and long-term funding sources for the pilot program.
   (2)  The manner and extent to which a student who withdraws from the participating institution will pay for the education credits earned.
   (3)  The maximum number of years a student may be enrolled in the participating institution under the pilot program.
   (4)  The rate of payment by students necessary to sustain the pilot program.
   (5)  Deferment of payment or a reduced rate of payment for students who after graduation are unemployed or underemployed.
   (6)  How the state or the participating institution may fund the pilot program’s implementation.
   (7)  How the state or the participating institution may collect accurate income data on students who move out of state.
   (8)  How the state or the participating institution may collect and enforce payments from students.
   (9)  How the pilot program may account for and apply to part-time students, transfer students, mid-career students, and other nontraditional students.
   (10)  How the pilot program may function with federal and state financial aid programs.
   (11)  The provisions or services that may be provided to low-income students under the pilot program.
   (12)  Whether participation in the pilot program should be limited to specific academic programs, such as programs that lead to employment in workforce shortage areas.
   (13)  The “pay forward, pay back” pilot program considered by the Oregon higher education coordinating commission.
   b.  If the commission determines that a pilot program is warranted, the commission shall identify one or more public institutions of higher education to participate in the pilot program and shall submit the proposed pilot program in the report required under subsection 4.
   (1)  The proposed pilot program submitted by the commission shall do the following:
   (a)  Allow students who are residents of this state, as defined by the participating institution, and who qualify for admission to the participating institution to enroll in the participating institution without paying tuition or fees.
   (b)  Provide that, in lieu of paying tuition or fees, students must sign binding contracts to, upon graduation from the participating institution, pay to the state of Iowa or the participating institution a certain percentage of the student’s annual adjusted gross income for a specified number of years.
   (c)  Specify the methodology by which the number of years and the percentage of annual adjusted gross income for contracts shall be determined and base the specifications on research to date.
   (d)  Establish an immediate funding source for the first 15 to 20 years of the pilot program and include the establishment of a revolving fund to deposit payments made under the pilot program.
   (2)  The proposed pilot program submitted by the commission, and the contracts entered into under the program, may vary by institution depending on factors which include but are not limited to the following:
   (a)  The total cost of education at the participating institution.
   (b)  The portion of the cost of education that is paid by appropriations of funds from the state of Iowa.
   3.  The commission shall also conduct a study of whether the state’s public postsecondary institutions can successfully implement a tuition freeze that will guarantee incoming undergraduate students the same tuition rate for four years. The study must include an analysis of:
   a.  The western tuition promise program offered by western Oregon university.
   b.  The finish in four program proposed in Florida, and similar programs.
   c.  Options for mitigating the financial strain that the adoption of a tuition freeze would place on an institution’s finances.
   4.  The commission shall submit its findings and recommendations in a report to the state board of education, the state board of regents, the governor, and the general assembly by January 15, 2015.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill directs the state board of regents and the department of education to convene a commission consisting of representatives of the community colleges and the institutions of higher education governed by the board to conduct two studies regarding financing strategies related to payment of tuition and fees at public postsecondary institutions.
   The commission is directed to study the feasibility of creating an alternative payment pilot program to replace the current system of charging students tuition and fees for enrollment at public institutions of higher learning. 
   With regard to the pilot program study, the commission is directed to, at a minimum, review issues relating to funding sources for the pilot program, student payments under the pilot program, the scope of the pilot program in regards to participation of students and academic programs, data collection under the pilot program, and the manner in which the pilot program may function with federal and state financial aid programs. The commission is also directed to review the “pay forward, pay back” pilot program considered by the Oregon education coordinating commission.
   The proposed pilot program submitted by the commission shall allow students who are residents of this state, and who qualify for admission, to enroll in the participating institution without paying tuition or fees; provided that, in lieu of paying tuition or fees, students sign binding contracts to pay to the state or the participating institution a certain percentage of the student’s annual adjusted gross income upon graduation from the participating institution for a specified number of years. The pilot program is to specify the methodology by which the number of years and the percentage of annual adjusted gross income for contracts shall be determined and base the specifications on research to date and to establish an immediate funding source for the first 15 to 20 years of the pilot program, which is to include the establishment of a revolving fund to deposit payments made under the pilot program.
   The proposed pilot program may vary by institution depending on the total cost of education at the participating institution and the portion of the cost that is paid by the state.
   The commission is also directed to study the question of whether the state’s public postsecondary institutions can successfully implement a tuition freeze that will guarantee that incoming undergraduate students have the same tuition rate for four years. The study must include an analysis of a tuition promise program offered by western Oregon university, the finish in four program proposed in Florida and similar programs, and ways of mitigating the financial strain that the adoption of a tuition freeze would place on an institution’s finances.
   The commission must submit its findings and recommendations in a report to the state board of education, the state board of regents, the governor, and the general assembly by January 15, 2015.