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INFORMATIONAL ITEM

ACADEMIC AFFAIRS COUNCIL

AGENDA ITEM: 4 – I

DATE: April 11, 2018

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SUBJECT

State Level Affordability Analysis

CONTROLLING STATUTE, RULE, OR POLICY

None

BACKGROUND / DISCUSSION

Consistent with one of their primary strategic goals for improving affordability for

students, the Board prioritized the creation of the Dakota’s Promise scholarship program

at their August retreat this past year. Unfortunately, the program was not advanced as part

of Governor Daugaard’s budget recommendation for this year.

In February, the National College Access Network (NCAN) released an analysis of

affordable four-year college options in every state and Puerto Rico based on IPEDS data.

The NCAN definition of affordability is: “The average Pell Grant recipient should be able

to cover the cost of attendance and have $300 on hand to cover an emergency when using

their combined federal grant aid, state grant aid, institutional grant aid, federal student

loans, Expected Family Contribution, and wages from reasonable work.” For in-state

students living on campus and working over the summer, South Dakota is one of only two

states to have zero affordable four-year institutions (the other being Puerto Rico) under

NCAN’s definition. For those students, the affordability gap is $2,376. For those students

who choose to live off campus (not with family), the affordability gap increases to $3,328.

Attachment I includes a regional comparison of affordability for in-state students with

summer work.

A paper in the journal Research in Higher Education1 published in March and covered by

Inside Higher Ed2 explored the effects of tuition increases on racial/ethnic diversity at

public colleges and university. The researchers found that for every 1% increase in in-state

tuition and fees, racial and ethnic diversity decreased by 0.013%. In other words, an

increase of $1,000 would lower the diversity of full-time students by 0.22%. The decrease

is even more marked at nonselective institutions. At nonselective institutions, every 1%

1 https://link.springer.com/article/10.1007%2Fs11162-018-9502-6 2 https://www.insidehighered.com/news/2018/03/27/increases-college-tuition-drive-down-diversity-public-colleges-

study-says

State Level Affordability Analysis

April 11, 2018

Page 2 of 2

increase in tuition and fees is linked to a 0.141% drop in full-time undergraduate diversity,

so a $1,000 increase in tuition and fees would lead to a 2.6% drop in racial and ethnic

diversity.

IMPACT AND RECOMMENDATION

Higher education is increasingly becoming more unaffordable. Without an increase to

financial aid programs, or an increase in state funding, tuition increases will have a noted

impact on enrollment trends in the state.

ATTACHMENTS

Attachment I – Four-Year Public Institution Affordability Gaps for In-State Students

Four-Year Public Institution Affordability Gaps for In-State Students Living on Campus with Summer Work

State # of 4-

year

Publics

Avg.

Total

Price

Avg.

Federal

Grant

Aid

Avg.

State/Local

Grant

Aid**

Avg.

Institutional

Grant Aid

Avg.

Federal

Loans

EFC

Based

on Avg.

Pell

Minimum

Wage

Summer

Earnings

(12 wks x

40 hrs)

Affordability

Gap

# of

Affordable

Institutions

Wyoming 1 $19,615 $4,315 $4,420 $5,359 $5,305 $2,080 $7.25 $3,480 -$5,344 1

Iowa 3 $20,888 $4,206 $4,799 $6,117 $5,408 $2,080 $7.25 $3,480 -$5,202 3

Montana 6 $18,658 $4,301 $2,953 $3,949 $5,531 $2,080 $8.15 $3,912 -$4,067 6

North

Dakota

7 $18,172 $4,322 $1,964 $2,688 $5,320 $2,080 $7.25 $3,480 -$1,682 7

Minnesota 11 $22,300 $4,535 $3,536 $3,390 $5,602 $2,080 $9.50 $4,560 -$1,403 9

Nebraska 6 $20,496 $4,189 $1,918 $3,893 $4,981 $2,080 $9.00 $4,320 -$884 5

South

Dakota

6 $22,393 $4,487 $1,271 $2,448 $5,580 $2,080 $8.65 $4,152 $2,376 0

National 550 $23,301 $4,685 $3,497 $4,783 $5,457 $2,080 $8.30 $3,983 -$1,151 325

*NCAN Definition of Affordability: The average Pell Grant recipient should be able to cover the cost of attendance and have $300 on hand to cover an

emergency when using their combined federal grant aid, state grant aid, institutional grant aid, federal student loans, Expected Family Contribution, and

wages from reasonable work

**State/Local Grant Aid: Grant monies provided by the state such as Leveraging Educational Assistance Partnerships (LEAP) (formerly SSIG's); merit

scholarships provided by the state; and tuition and fee waivers for which the institution was reimbursed by a state agency. Local government grants include

scholarships or gift-aid awarded directly to the student.

Source: http://www.collegeaccess.org/BlogItem?dg=def667bc-ad06-4aac-b2b3-1030a72cc0cb

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Four-Year Public Institution Affordability Gaps for In-state Students Living Off-Campus (Not with Family) with Summer Work

State # of 4-

year

Publics

Avg.

Total

Price

Avg.

Federal

Grant

Aid

Avg.

State/Local

Grant

Aid**

Avg.

Institutional

Grant Aid

Avg.

Federal

Loans

EFC

Based on

Avg. Pell

Minimum

Wage

Summer

Earnings

(12wks x

40 hrs)

Affordability

Gap

# of

Affordable

Institutions

Wyoming 1 $19,615 $4,315 $4,420 $5,359 $5,305 $2,080 $7.25 $3,480 -$5,344 1

Iowa 3 $20,774 $4,206 $4,799 $6,117 $5,408 $2,080 $7.25 $3,480 -$5,316 3

Montana 6 $18,975 $4,301 $2,953 $3,949 $5,531 $2,080 $8.15 $3,912 -$3,751 6

North

Dakota

7 $18,414 $4,322 $1,964 $2,688 $5,320 $2,080 $7.25 $3,480 -$1,440 7

Minnesota 11 $22,207 $4,535 $3,536 $3,390 $5,602 $2,080 $9.50 $4,560 -$1,495 9

Nebraska 6 $20,276 $4,189 $1,918 $3,893 $4,981 $2,080 $9.00 $4,320 -$1,104 6

South

Dakota

6 $23,346 $4,487 $1,271 $2,448 $5,580 $2,080 $8.65 $4,152 $3,328 0

National 673 $22,890 $4,642 $3,261 $4,246 $5,283 $2,080 $8.37 $4,017 -$638 368

**State/Local Grant Aid: Grant monies provided by the state such as Leveraging Educational Assistance Partnerships (LEAP) (formerly SSIG's); merit

scholarships provided by the state; and tuition and fee waivers for which the institution was reimbursed by a state agency. Local government grants include

scholarships or gift-aid awarded directly to the student.

Source: http://www.collegeaccess.org/BlogItem?dg=def667bc-ad06-4aac-b2b3-1030a72cc0cb

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