PRELIMINARY ACFB RECOMMENDATION — EARLY COLLEGE START TUITION

[1] Summary:

The ECS program is seen by the ACFB as being an important one, both in its benefits and its costs. Its special treatment of high school students has the potential of promoting college participation, but also raises issues of fairness to other students and to taxpayers. While the current opinion of most (but not all) ACFB members is that the present waiver structure should be modified, we recommend that such changes be deferred until FY06 to permit development of better information and of plans to coordinate scholarship and marketing changes to maintain accessibility. We also recommend that ACC consider seeking a change in state law to permit it to waive/discount tuition and fees for the first college course or two for all first-time-in-college students, an approach that would remove many of the objections to ECS waivers and permit extension of the ECS efforts to immediate graduates of high schools and GED programs.

[2] Differentiation between types of ECS delivery:

[a] Both now and for the long term, full tuition waivers for the component of the ECS program that is taught on high-school campuses by teachers who are not paid by ACC is seen by the ACFB as being financially appropriate. While such classes entail some overhead (e.g., supervision costs and a fair share of course-development costs), costs will be much less than is typical of other classes and should be adequately covered by the associated state reimbursement funds.

[b] Restricted ECS classes taught at high schools by ACC-paid teachers raise more complex issues for computing price sensitivity and marginal cost. There is not yet an ACFB consensus about what level of waivers, if any, is appropriate for such classes.

[c] On the other hand, at this point most ACFB members feel that ECS students who attend ACC campuses in classes along with older ACC students should eventually pay on the same basis as those older students. However, this should include comparable financial aid (from ACC if necessary) even if the ECS students do not qualify for particular programs such as Pell grants; where needed, such aid should cover textbooks (and perhaps transportation) as well as ACC tuition and fees.

[3] Preliminary economic comments (Note that the fact that an ECS subsidy may exist does not necessarily imply that such a subsidy is inappropriate – that is a priority decision for the Board to make):

[a] The ACFB does not believe that all elements of the ECS program are immediately financially beneficial to ACC. When the eventual expansions of support services needed to maintain quality of instruction are taken into account, sustainable marginal costs for ACC-campus-based enrollments (2/3 of the current ECS total) exceed the state reimbursement level. Development of a coherent ACC economic model during 2004 will provide a context to quantify and refine this aspect of the discussion, and to explore the financial implications of any recruitment effects.

[b] The limited demographic information available so far suggests that many of the families of current ECS students are better able to pay full price than the typical older students who must now cover some of the ECS-student share of average costs. However, it is quite plausible that many first-time-in-college students may be substantially more sensitive to price than older students are, especially since their scholarship opportunities may differ. This implies that full or partial restoration of ECS tuition, if decided on, should be done carefully and with aggressive use of accompanying scholarships.

[4] Next steps:

The information needed to fully assess this issue should be developed during calendar 2004 on a collaborative basis, with participation from ECS staff, ACC faculty, ACC administration, and the ACFB. This should include a comprehensive survey of the demographic and economic backgrounds of actual and potential ECS participants, as well as information about the pattern of ECS tuition charges, enrollment, and faculty compensation at other Texas community colleges. The other major component needed for a good analysis of this topic is a coherent economic model of ACC costs and revenues. The ACFB will work with ACC staff on the development of such a model, which should be in a usable form prior to the time that the FY06 decision on ECS tuition must be made.