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July 6, 2004 :: Financial Aid Increases Highlight Higher Ed’s 2004-05 Budget

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More students will be receiving help meeting college costs this fiscal year thanks to a $10.2 million budget increase in student assistance programs across the state system. The increase is part of higher education’s more than $1.5 billion operating budget for fiscal year 2005.

Approved by the Oklahoma State Regents for Higher Education recently, the FY05 budget will support education and research opportunities for the approximately 230,000 credit-seeking students who annually attend the state’s 25 colleges and universities and two higher education centers.

“Considering the funding challenges our public institutions have been facing during the last few years, this budget is certainly a step forward, albeit a small one,” Chancellor Paul G. Risser said. “Institutions have focused their budgets on providing more resources to help their students succeed while at the same time reducing administrative costs. This is extremely noteworthy since many institutions have seen significant enrollment growth on their campuses within the last four years.”

Regents reported that the primary functions of instruction, research and public service continue to make up approximately 56 percent of institutions’ operating budgets and that institutional expenditures within those functions have increased compared to FY04. Instruction showed the largest dollar increase of $52.3 million, which makes up 47.3 percent of expenditures, followed by research at $5.4 million and public service at $3 million.

Higher education operating funds come from two sources: state appropriations and revolving funds, which include revenues from tuition and fees, carry-over funds, federal and local funds, and gifts and grants.

State appropriations for the state system in FY05 total $802.1 million, an increase of $34.2 million from FY04.

Revolving fund income at state system institutions is expected to increase by $74.5 million to $696.4 million for FY05, thanks in large part to the tuition and mandatory fee increases at state colleges and universities and an expected enrollment increase statewide of 3.2 percent. Total tuition and fees will still be below limits set by the Oklahoma Legislature.

To help students pay for increases in tuition, Regents approved a $10.7 million increase in institution-based scholarships and added nearly $6 million in state-funded scholarships, including $4.1 million for the Oklahoma Higher Learning Access Program (OHLAP) and $900,000 for the Oklahoma Tuition Aid Program (OTAG).

Higher educations officials said that as a result of the funding situation in FY05, most institutions across the state system will be able to meet $22.5 million more in mandatory costs, such as health insurance and utilities, and will likely approve or propose salary increases. Institutions will also be able to restore 85 more faculty positions and 85 more staff positions after eliminating more than 300 last year. Institutions will also spend an additional $1.6 million for library books and other materials.

“Most faculty and staff at our colleges and universities have not seen a pay raise in several years, so we are pleased that the institutions can reward their employees with pay increases. They have performed admirably during these challenging times and deserve to be recognized for their work,” Risser said.

The state system will continue to hold down administrative costs, dropping from 8.1 percent of the budget in FY04 to 7.9 percent in FY05.

Despite the $34.2 million increase in state appropriations for FY05, Oklahoma’s public colleges and universities have seen a significant drop in state support over the last two decades. Since 1988, state appropriations as a percentage of the budget have dropped from 75 percent to 50 percent.

Officials said that they are still concerned about decreases in state appropriations and the lack of funds for several worthwhile programs such as OTAG and Summer Academies in Math and Science.

OHLAP, which pays the tuition for students who meet certain academic and behavior requirements in high school, still needs another $4.1 million in FY05 to meet its scholarship obligations this coming year. State Regents hope that a portion of revenues dedicated specifically for OHLAP from the recently created Tribal Gaming Compact will take care of the shortfall. If it doesn’t, they say they will request a supplemental appropriation in 2005. They are also uneasy about future funding for OHLAP, which is expected to need an additional $8 million in funding in FY06.

“Although Oklahoma’s economy looks to be on the rebound, there are still challenges ahead for the state system in the years to come,” State Regents’ Chairman Ike Glass said. “State support has dropped significantly and institutions have been searching for other ways to make up for those shortfalls, such as raising tuition and fees. We need to be careful so that we don’t price Oklahomans out of a college education. I am confident that higher education leaders and legislative leaders will continue work together to address this issue.”