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BILL # SB 1088 |
TITLE: children; veterans; disabilities; tuition waivers |
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SPONSOR: Borrelli |
STATUS: As Amended by Senate ED |
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PREPARED BY: Matt Beienburg |
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The bill would expand eligibility for tuition waivers at Arizona's public universities and community colleges to include children of current or former members of the U.S. Armed Services whose disability rating is at least 30% and who are Arizona residents or were stationed in Arizona when injured.
The bill also includes a legislative intent clause that the Legislature shall annually appropriate enough monies to fully offset the costs of these and other tuition waiver programs established by statute.
The bill also appropriates $9.0 million from the General Fund to the Arizona Board of Regents (ABOR) and $500,000 to Community Colleges to reimburse them for the cost of providing the new 30% disability waiver and other statutory tuition waivers.
Estimated Impact
The JLBC Staff estimates that the new 30% disability tuition waivers would add $7.1 million and $2.4 million of annual costs to the universities and Community Colleges, respectively. In comparison, the bill appropriates $9.0 million from the General Fund to ABOR and $500,000 from the General Fund to the Community Colleges to offset the costs of providing these and other tuition waivers. As a result, the appropriations may be insufficient to meet the requirements of fully offsetting the waiver costs to the universities, but would exceed the amount needed for the Community Colleges.
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Table 1 |
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SB 1088 General Fund Appropriations vs. Cost of New Waivers |
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Bill Appropriations |
Estimated Cost of New Waivers |
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Universities |
$9.0 M |
$7.1 M |
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Community Colleges |
$0.5 M |
$2.4 M |
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Total |
$9.5 M |
$9.5 M |
The bill also states that it is the Legislature's intent to annually appropriate enough monies to fully offset the costs of these and other tuition waiver programs established by statute. The short-term cost of offsetting all existing statutory waivers at the universities would be approximately $3.2 million. At this time, we are unable to estimate comparable Community College costs.
The total short-term costs of the new and existing statutory waivers that the Legislature would intend to cover under the bill would therefore be approximately $12.7 million ($9.5 million cost of new 30% disability waiver + $3.2 million for existing waivers).
By FY 2023, the estimated state costs of offsetting the new and existing waivers at the universities could reach $26.0 million, in addition to at least $2.4 million for the Community Colleges.
(Continued)
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Table 2 |
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Costs of Fulfilling Legislative Intent to Fully Fund New and Existing Statutory Waivers |
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Short-Term (FY 2019) |
Long-Term (FY 2023) |
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Universities |
$10.3 M |
$26.0 M |
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Community Colleges 1/ |
$2.4 M |
$2.4 M |
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Total |
$12.7 M |
$28.4 M |
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1/ Includes only the cost of the new 30% disability waivers. Does not include short-term or long-term costs of other existing statutory awarded to Community College students. |
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The Arizona Community Colleges and Board of Regents (ABOR) do not have a fiscal estimate for this bill, but ABOR believes the costs of the new waivers would be greater than $1.0 million per year based on the costs of other statutory waivers provided by the universities.
Currently Eligible Populations
Under current law, several categories of students qualify for statutorily-established tuition waivers at Arizona's universities and community colleges:
· A child (under 30) or spouse of an Arizona peace officer, correctional officer, firefighter, emergency paramedic, National Guard member or member of the U.S. Armed Forces killed in the line of duty.
· Members of the U.S. Armed Forces or Arizona National Guard who received a purple heart and a disability rating of 50% or medical discharge due to injury.
· Current or prior foster care children (pilot program statutorily expires after FY 2018).
· Enrollees in the Arizona Teachers Academy who agree to teach 1 year in Arizona for each year of waived tuition.
· Students from Sonora, Mexico (students receive resident tuition rate).
The bill would expand eligibility for tuition waivers to include children of current or former members of the U.S. Armed Services whose disability rating is at least 30% and who are Arizona residents or were stationed in Arizona when injured.
According to the U.S. Census Bureau's 2016 American Community Survey (ACS), an estimated 58,121 veterans who reside in Arizona have a service connected disability rating of 30% or higher.
Based on Census Bureau and U.S. Department of Education National Center for Education Statistics (NCES) data, these veterans have approximately 5,000 children attending college as undergraduates in Arizona, including approximately 2,500 who are attending a community college, and 1,750 who are attending a public university.
University Costs of New Waivers
According to the FY 2017 ABOR Financial Aid Report, while the average "sticker price" of tuition at Arizona's public universities in FY 2017 was $10,962, the average tuition paid after other non-loan financial aid was awarded was $4,054. Because the bill states that the tuition waiver shall be reduced by the amount of any other federal or public grants awarded through the universities, the additional cost per student to the universities to provide a full tuition waiver is approximately $4,054.
The cost to provide waivers to all 1,750 students would therefore be approximately $7,094,500 (1,750 students X $4,054 additional cost per waiver = $7,094,500). There is no assumed increase in operating costs to the universities as a result of these waivers.
Community College Costs of New Waivers
Maricopa Community Colleges (MCCCD) reports that full-time and part-time students take a combined average of 8.5
(Continued)
credits per semester. Across Arizona's community colleges statewide, the average cost per credit hour is $85. On average, therefore, community college students' tuition and fees are roughly $1,445 per year (8.5 credits X 2 semesters X $85 per credit = $1,445). Assuming the 2,500 children of disabled veterans attending an Arizona community college represent full-time and part-time students in roughly the same percentage as the overall community college population, the value of tuition waivers to these students would be $3,612,500 (2,500 students X $1,445 per student = $3,612,500).
However, the U.S. Department of Education reports that 69,110 Arizona community college students received Pell Grants in FY 2016, averaging $3,309 per award. This implies that roughly one-third of Arizona community college enrollees received Pell Grants and that these awards would fully fund tuition costs for these students. Assuming a similar rate of federal aid among children of disabled veterans, the actual estimated cost to the community colleges to provide waivers to children of disabled veterans would thus be reduced by roughly one-third to $2,408,300 ($3,612,500 X 2/3 = $2,408,300).
Cost of Legislative Intent to Fund All New and Existing Waivers
The bill includes a legislative intent clause that the Legislature shall annually appropriate enough monies to fully offset the costs of these and other tuition waiver programs established by statute.
At the Senate Education Committee hearing on SB 1088, existing statutory waivers were estimated to cost the universities $6.4 million per year. Based on updated information, the JLBC Staff estimates this cost to be approximately $3.2 million, including waivers granted as part of the Arizona Teachers Academy.
The statutory waivers fund any amount not already covered by university or federally funded financial aid. Over time, however, the universities could presumably reduce the amount of university-funded aid they would have otherwise awarded to incoming students who are eligible for a statutory waiver, since the state would make up any difference.
For example, students who would qualify for the 30% disability waiver under the bill already have all but $4,054 of their tuition covered by other financial aid, on average. The incremental cost to the universities (and therefore, the cost to the state to reimburse them) to provide a full tuition waiver is thus $4,054. Under the bill, however, the universities could reduce the financial aid they would otherwise have provided to future students, leaving the state to fund approximately $9,680 (the full price of tuition less federal Pell Grants) for each waiver recipient, on average.
Including growth in the Arizona Teachers Academy from 230 to 730 participants by FY 2023, the cost of the legislative intent to fully fund all new and existing statutory waivers at the universities would reach $26.0 million, as shown in Table 3.
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Table 3 |
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Short-Term and Long-Term Costs of Fully Funding University Statutory Tuition Waivers |
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Short-Term (FY 2019) 1/ |
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Long-Term (FY 2023) 2/ |
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Recipients |
Total Cost |
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Recipients |
Total Cost |
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Firefighters, Paramedics, Correctional |
1 |
$ 13,300 |
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1 |
$ 13,300 |
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Children/Spouses of Slain Peace Officers |
14 |
134,800 |
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14 |
134,800 |
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Military, National Guard |
96 |
916,800 |
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96 |
916,800 |
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Foster Care Students |
71 |
246,900 |
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71 |
246,900 |
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Students from Sonora Mexico |
43 |
708,000 |
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43 |
708,000 |
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Arizona Teachers Academy |
230 |
1,150,000 |
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730 |
7,066,400 |
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Children of 30% Disabled Veterans |
1,750 |
7,094,500 |
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1,750 |
16,940,000 |
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Total |
2,205 |
$10,264,300 |
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2,705 |
$26,026,200 |
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1/ Number of recipients and waiver costs as shown in the FY 2017 ABOR Financial Aid Report, except for Arizona Teachers Academy and Children of 30% Disabled Veterans amounts, which are based on JLBC Staff estimates. 2/ Estimate if universities reduce university-funded financial aid for future recipients of the new waiver. Estimated growth in Arizona Teachers Academy waivers based on ABOR's 5-year estimate. Does not include any additional growth in number of waivers for categories besides the Arizona Teachers Academy. |
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Additional Factors
The actual costs to the universities and community colleges may be slightly lower, as some children of disabled veterans may also already qualify for benefits under existing federal aid programs, such as the Survivors' and Dependents' Educational Assistance (DEA) program or Post 9/11 GI Bill.
In addition, Community Colleges receive General Fund appropriations based on enrollment 2 years prior. If the bill induces additional students to enroll in Arizona community colleges (excluding the Maricopa and Pima County Community Colleges, whose Operating Aid and Science, Technology, Engineering and Mathematics (STEM) and Workforce Programs State Aid amounts are suspended), it would increase General Fund costs 2 years afterwards. However, because the bill may also induce eligible students who would otherwise have attended a community college to instead enroll for free at a university, it could actually decrease General Fund costs since there is no General Fund formula funding for university students. It is not possible to predict the relative magnitude of these two offsetting impacts on enrollment patterns in advance.
Local Government Impact
None
1/31/18