State leader makes higher ed a priority

State leader makes higher ed a priority

The state's public universities would finally get an increase in state funding in the budget Gov. Rod Blagojevich unveiled today, including a much-needed boost for the University of Illinois.

Administration spokeswoman Becky Carroll confirmed on Tuesday that the governor's budget would contain a $40 million increase for higher education, enough to increase need-based Monetary Award Program grants by nearly $8 million and provide almost 1.5 percent more to universities than they got this year.

University presidents returned the favor with an open letter supporting not only the governor's higher education budget but also his controversial attempts to pass a capital construction bill and sell off all or part of the state's secondary student loan portfolio, as long as certain conditions are met.

"We are pleased to support your budget for higher education," the letter stated. "It reflects the priorities we all share: access for students through the College Tuition Tax Credit and MAP funding, support for faculty, continuation of core services for students and families through (the Illinois Student Assistance Commission) while generating revenue from the sale of loan assets, and a commitment to build momentum on the capital side to maintain our investment in Illinois' educational facilities. We look forward to working with you to ensure this higher education budget is adopted for Fiscal Year 2007."

Although exact details were not available on Tuesday, Carroll said the governor's proposal would give universities slightly more than was requested in the Illinois Board of Higher Education's recommended budget, which called for about 1.1 percent more for universities. That would have translated to $8 million more for the University of Illinois, the first increase in state support in five years.

"It's going to allow us to hire more faculty, to provide more course sections and high-quality instruction after several years of cuts and no growth in our state funding," said UI spokesman Tom Hardy.

State Rep. Chapin Rose, R-Mahomet, said he was happy to hear that there would be an increase in state funding for universities, but added that "it doesn't come close to alleviating the damage that's been done to higher ed" over the last several years.

In addition to the increase for universities, the governor is proposing a tuition tax credit of up to $1,000 for college freshmen and sophomores who maintain at least a B average. The $90 million first-year cost of that plan would be covered by the sale of ISAC's secondary student loan portfolio, Carroll said on Tuesday. Additional revenue from such a sale would be dedicated to paying for the tax credit in future years or to other ISAC needs, she said.

When Budget Director John Filan proposed selling the loans last spring, he said it could generate between $300 million and $500 million for the state. But Carroll declined to provide a specific estimate on Tuesday.

"I think everyone anticipates that it would be several hundreds of millions of dollars, but we don't want to put a ceiling out there because we might end up stepping on our potential proceeds," she said.

Lawmakers blocked the proposed loan sale last spring after ISAC objected to the idea, but the governor has since replaced a majority of the commission's board, and now the universities have signed on as long as certain terms and conditions are met. They include assurances that students' loan terms will not be changed and that any interest rate and fee incentives that are currently offered will be preserved.

State Rep. Naomi Jakobsson, D-Urbana, has sponsored legislation to that effect, which the University of Illinois Student Senate recently endorsed. It is currently awaiting a hearing in the House higher education committee.

But the Illinois Student Senate also passed a resolution opposing the loan sale entirely, and area Republicans have also expressed concern about such an action. It was unclear on Tuesday whether the deal the universities had reached with the administration would change their minds.

ISAC Chairman Don McNeil said the commission is "fully in accord" with the conditions outlined in the letter, which also include: preserving or enhancing the Monetary Award Program for low-income students and other scholarship programs; continuing all current research, analysis, outreach and training services provided by the ISAC, including the CollegeZone Web site; and requiring that a private purchaser offer jobs to ISAC employees currently performing services relating to the loans.

In addition to support for the proposed loan portfolio sale, the universities expressed support in the letter for the governor's capital proposal.

"We thank you for your support of enhanced capital funding and look forward to working with you and your staff during this session to pass a healthy capital funding bill that contains desperately needed funds for public universities," the letter stated.

Blagojevich needs a three-fifths majority in the House and Senate to borrow the $3.2 billion that he is requesting for the capital plan, but Republicans are generally opposed to further increasing state debt, and say there are still too many questions about what projects might be included and how exactly the money would be repaid.