Independent Higher Education in the West: Status of the States

Independent Higher Education in the West: Building Access Capacity

Status of the States

"Many states have favorable tax structures for independent institutions which exempt them from income, sales, and property taxes."11

MANY WICHE states have programs and/or policies which involve the independent sector. In general, most of the financial resources available to the independent sector usually come in two forms: direct institutional funding or indirect via student financial assistance programs.6, 7 However, not all of these financial assistance programs involve state monies. Many states receive federal State Student Incentive Grants (SSIG) which require matching monies. Some states require the receiving independent institution to match the federal dollars-no state dollars support independent institutions. In the West, not all independent institutions participate in state and federal financial aid programs.

Other western state programs and/or policies relating to independent institutions concern issues of taxes. Most states provide some tax relief to this postsecondary sector. Arizona is the only western state that does not provide a property tax exemption to independent institutions.6 Arizona, Idaho, Montana, New Mexico, North Dakota, South Dakota, and Utah do not provide bonding authority for the independent institutions.6 States with higher independent institutional enrollments have creative arrange-ments between the state and independent institutions. Examples include:

Arizona established a pilot program in 1996 which provides a limited number of college-bound students with vouchers to attend an in-state independent institution.

California, which has the largest number of independent institutions in the West, has a long history of providing "Cal Grants." In 1996-97, California provided over $80 million to assist residents who chose to attend an in-state independent institution.

Colorado has fellowship programs for students who attend independent colleges and universities in state.

Florida independent institutions are seen as partners with the state to ensure adequate and reasonable access to higher education. Over $70 million in state support is provided annually for Florida students in independent institutions through several direct funding mechanisms, the Resident Access Grant, and more than a dozen different indirect student financial assistance programs. These initiatives support state goals of access and choice and provide specialized educational services.8

Maryland has a long history of support for eligible independent institutions that support state goals. During FY98, close to $32 million was allocated for various independent activities; over 50 percent will be used as financial aid for Maryland residents, almost 20 percent will go directly to enhance undergraduate education at the institutions. The capital grant program for independent institutions provides about $6 million in matching funds annually.9

New York, a leader in funding independent higher education, provided almost 42 percent of all the money used as funding for this sector in 1988.10 New York uses a combination of direct and indirect support:

In 1997-98, close to $17 million was allocated for academic support services and supplementary financial assistance for academically and economically disadvantaged students attending independent institutions in New York state.

Residents can also use an entitlement financial aid program.

In 1997-98, $42.5 million of unrestricted aid will go to independent institutions based on the number of degrees awarded.

Oregon has extensive statutory language acknowledging the independent sector as a vital provider of postsecondary education. The state also purchases educational services at nonsectarian colleges for specific academic programs.6

Pennsylvania provides funding to the indepen-dent sector in several ways, including the Institutional Assistance Grants and Equipment Grants Program (open to public and independent institutions).8

The state of Washington encourages utilization of the independent sector through several student choice programs, including the Need Grant Program for qualified students to attend public or independent institutions.

6. Education Commission of the States. (1990). The Preservation of Excellence in American Higher Education: The Essential Role of Private Colleges and Universities. Denver, CO: Education Commission of the States.

7. Zumeta, W. (1996). "Meeting the Demand for Higher Education Without Breaking the Bank: A Framework for the Design of State Higher Education Policies for an Era of Increasing Demand." Journal of Higher Education, 67(4), (July/August), 367-425.

8. Florida Postsecondary Education Planning Commission (1990). State Funding for Independent Postsecondary Education. Tallahassee, FL: PEPC.

9. Maryland Independent College and University Association. (1998). Briefing Book, January. Annapolis, MD: MICUA.

10. "Public Support of Private Colleges." (1988). Change, (March/April), 35-40.

11. Larson, T. (1998). Unpublished Survey of Activities and Future Issues for Private, Independent Higher Education. Survey conducted at February, 1998 meeting of the National Independent Association of College and Universities State Executives.