Scholarships, funding, and oversight boards: Higher education takeaways from the Pa. state budget

The new Pennsylvania budget includes a number of new components that could greatly impact the state’s higher education institutions, including more scholarships for students, accountability for institutions, and incentives to close gaps in high-demand workforce needs.

And while some of the exact initiatives initially envisioned by Gov. Josh Shapiro did not make the cut, much of what was approved Thursday night addresses the issues that he laid out as critical when describing his proposal earlier this year in a state that really hadn’t done much on the higher education policy front, his administration said.

“He described his blueprint as a bold vision that really was designed to serve as a starting point of a conversation with stakeholders,” said Kate Shaw, deputy secretary and commissioner of higher education. “We landed in a place that addresses the goals that the governor set out but does so in a way that was sensitive to the feedback and concerns of higher education and other stakeholders in the field.”

» READ MORE: Pa. lawmakers reach $47.6 billion budget deal with sweeping changes to public education

The budget, she said, includes a $144 million, or 33%, increase in financial aid to students, some through existing programs and some through new efforts. There will be a new State Board of Higher Education that will serve as an overarching coordinating body aimed at charting a course for higher education with goals and a strategic plan addressing access, quality, affordability and accountability. As part of that board, a new council will create performance-based criteria that in subsequent years will help determine funding for three of the four state-related universities: Pennsylvania State University, the University of Pittsburgh and Temple University.

» READ MORE: A plan to overhaul Pa.’s higher education landscape is a long time coming, but questions remain.

And coming on the heels of the abrupt and disruptive closure of University of the Arts in June, another new measure in the budget calls for the development of criteria that closing schools must follow to avoid a similar situation.

“They look like they are all positive for Pennsylvania, which is positive for Temple,” Ken Kaiser, Temple’s senior vice president and chief operating officer, said of the new initiatives.

Here’s a closer look at each of the major pieces and how they will work.

» READ MORE: The University of the Arts is closing June 7, its president says

Shapiro’s initial proposal to reduce tuition at state-owned colleges to $1,000 for families making the median income of $70,000 or less is not part of the budget.

But new Grow Pennsylvania scholarships of up to $5,000 will be targeted to in-state students who study in certain high-demand fields, maintain adequate academic progress, and agree to work in the state for a specified period after they graduate. There are no income requirements and the scholarships are so-called last dollar, meaning they are applied after other aid.

The eligible fields will be determined using data from labor and industry, Shaw said, and may change over time, as workforce needs evolve. The grants are open to students attending both public and private colleges.

Shapiro, she said, wanted to get more students into high-demand jobs to help close gaps in workforce needs, she said.

“We project the gap between postsecondary credentials and workforce credential needs will grow to over 225,000 over the next eight years,” Shaw said.

For every year students receive funding, they must sign an agreement to work in the state for a year, and if they renege, they must pay back the aid. The program will be administered by the Pennsylvania Higher Education Assistance Agency, which will have to come up with criteria on how that will work.

» READ MORE: Pa. state universities plan for another tuition freeze, but postponed decision waiting for budget

Another new merit scholarship program could help lure more out-of-state students to the 10 universities in the Pennsylvania State System of Higher Education (PASSHE). Under the program, which won’t start until 2025-26, PASSHE can charge in-state tuition to students who commit to working in Pennsylvania after graduation for the same period as the Grow Pennsylvania scholarship recipients.

An existing scholarship program, called Ready to Succeed, will be expanded to serve more students. The income limit for receiving the scholarship will rise from $126,000 to $175,000 and the GPA for eligibility will be reduced.

PASSHE will receive a 6%, or $35.1 million, increase in funding, which system Chancellor Daniel Greenstein said will be enough to recommend to his board of governors that tuition be frozen for a sixth consecutive year.

“PASSHE is incredibly appreciative of the governor and legislature for their strong commitment to higher education and the increased investment in state system students and universities,” the system said in a statement.

The state’s community colleges also will get a 6% boost, which a Community College of Philadelphia spokesperson said will help the institution “continue to avoid a tuition increase.”

» READ MORE: Penn State, Temple, and Pitt get flat funding from the state — with a catch

But state-related universities, with the exception of Lincoln University, which got a 13% funding increase, again were held to flat funding.

“We’re grateful to get the funding from the commonwealth,” said Kaiser of Temple, which announced last week it would raise tuition more than 4%, “but greatly disappointed to be held flat now for six consecutive years, especially with inflation and all the demands on higher ed today.”

For years, some have cited the need for an overarching board that could better plan how Pennsylvania’s plethora of private colleges, state and state-related universities, and community colleges can work together to meet the needs of students and the state’s workforce.

“The board is charged with coming up with a strategic vision or plan for higher education within the first year of its existence,” Shaw said, as well as a data system to make the colleges’ progress more transparent.

It will not have regulatory authority, except for what currently exists over community colleges that had been carried out by the board of education and now will be transferred to the new board, Shaw said. Community colleges otherwise will maintain their autonomy over their local operations, which was important to them, Shaw said. The budget does not include a provision from Shapiro’s initial plan that would have created one board to oversee PASSHE and the community colleges.

The new board also will establish a council to develop a performance-based funding formula for Temple, Penn State and Pitt that likely will include a look at graduation and retention rates and job outcomes.

Kaiser said he’s glad that Temple will have a seat on the council and a voice in the process.

The new state board of higher education will be responsible for developing procedures by July 1, 2026, to ensure orderly closures of colleges, proper teach-out plans, and the proper preservation of an institution’s records.

» READ MORE: State lawmakers want to prevent universities from closing abruptly like UArts

State Rep. Ben Waxman (D., Philadelphia) was among legislators who said in June that they were introducing legislation to avoid abrupt closures of colleges. The move followed the closure of UArts with only a week’s notice.

Waxman said Friday he was pleased to see the new provision in the budget.

“At the end of the day, we are going to have the rules spelled out that will prevent this from happening again,” he said.

The Middle States Commission on Higher Education, the accrediting body for area colleges, said it would look closely at any new provisions the state develops.

“We already do see states differ in their approach to institutional closure,” said Nicole Biever, chief of staff. “For example, in New York, the New York State Education Department (NYSED) becomes the final repository for student records when institutions fail to arrange a repository.”

The commission recently revised its guidelines so that only schools that plan appropriately for closure will have them approved by the commission.

“Any institution that provides less than six months’ notice of institutional closure will be deemed unapproved,” she said.