Annual report for postsecondary education grant (PEG) program

              Arizona Commission for
Postsecondary Education
… expanding access and increasing success
in postsecondary education for Arizonans
Annual Report for
Postsecondary Education Grant (PEG) Program
Fiscal Year 2010 - 2011
Arizona Commission for Postsecondary Education
2020 North Central, Suite 650
Phoenix, Arizona 85004
Tel: (602) 258-2435 | Fax: (602) 258-2483
Email: acpe@azhighered.gov | Website: http://www.azhighered.gov
December 28, 2011
The Honorable Janice K. Brewer, Governor
The Honorable Steve Pierce, President of the Senate
The Honorable Andy Tobin, Speaker of the House of Representatives
Mr. Vincent Alascia, State Documents Librarian, AZ Library, Archives, and Public Records
I respectfully submit the enclosed annual report on the Postsecondary Education Grant (PEG)
Forgivable Loan Program on behalf of the Arizona Commission for Postsecondary Education
(ACPE). The ACPE Commissioners and staff remain committed to investing themselves in the
work of higher education through their mission of increasing access and expanding success in
postsecondary education for Arizonans. This report reflects that commitment.
Elements of this report include a brief history of the program development and a detailed
description of the recipients of the forgivable loan during the last year of available funding (FY
2010) including: the amount of monies distributed, the institutions the recipients attended, and the
number of students on the waiting list at the end of the fiscal year. Additionally, a summary of the
budget reductions and future of the program are included.
Established in the 2006 legislative session, the PEG Program was designed to provide financial
assistance to both adult-returning and traditional-aged baccalaureate-bound students attending a
private postsecondary college or university. This program was also intended both to build the
Arizona’s postsecondary education capacity and to meet the challenge of supplying an educated
workforce for Arizona’s economic growth.
The FY 2011 and FY 2012 enacted budgets suspended all state funding for and placed on
moratorium the Postsecondary Education Grant (PEG) Forgivable Loan Program. Elimination of
funding for the PEG program places continued College Access Challenge Grant funding for
Arizona in jeopardy as criterion 2 of the College Access Challenge Grant Maintenance of Effort
(MOE) requires that the state maintain a sustained funding stream of financial aid for students
attending private Arizona postsecondary institutions.
A copy of the annual report and more detailed information about the Arizona Commission for
Postsecondary Education, its administrative functions, initiatives and its collaboration and
partnerships is available from the website www.azhighered.gov or by contacting our office at
602.258.2435.
Respectfully Submitted,
Dr. April L. Osborn, Executive Director
Arizona Commission for Postsecondary Education
cc: Liisa Laikko, Senate Education Research Analyst
Breanna Bushu, JLBC Fiscal Analyst
Dale Frost, OSPB Budget Analyst
Dawn Wallace, House Policy Advisor to the Majority
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The Arizona Commission for Postsecondary Education (ACPE)
Postsecondary Education Grant (PEG) Program
FY 2010 -11 Annual Report
Submitted December 23, 2011
Dr. April L. Osborn, Executive Director
Introduction and Description of the Grant (forgivable loan)
The Postsecondary Education Grant (PEG) program, created in the 2006 legislative session, is a student-centered, non-need based forgivable loan designed to financially support and encourage Arizona resident students to attend a private postsecondary baccalaureate degree granting institution in Arizona. The maximum grant is $2,000 per year for up to four academic years (eight semesters/terms). These funds must be used for tuition, books and fee expenses. Students must obtain a bachelor degree within five years after the first PEG disbursement. Should a student not obtain a bachelor degree within five years, the student must repay all grant funds.
The PEG program was patterned after the successful student-centered PFAP program. Goals for the PEG program include (1) strengthening the private higher education sector, (2) providing cost savings to the State by encouraging residents to attend private colleges and universities over publically funded universities, and (3) increasing the number of baccalaureate degrees in the State of Arizona, thus increasing the tax revenues from a more readily available educated and higher wage-earning workforce.
Who Benefited from the Forgivable Loan?
FY 2010 was the last year forgivable loans were awarded in this program. The ACPE awarded 1,400 students for a total of $2,242,678 and after funds were exhausted, there were an additional 2,627 students on the waiting list. The table below provides an illustration of the students who benefited from this forgivable loan program.
More than 4,000 students have benefited from the PEG Program since its inception. The PEG program has assisted in the goal of increasing the number of baccalaureate degrees awarded in the State by financially assisting a total of 2,300 private college and university graduates.
The following pie charts illustrate the institutions attended and programs of study selected by recipients in the PEG program for FY 2009-10. This reflects an increase in the 2
percentage of students majoring in health professions/nursing (up from 16% to 17%), and those majoring in education programs (up from 18% to 21%).
Loss of PEG Funds and Future of Program
The effects of the suspension in funding include a loss of financial aid to private college students, less support to the private higher education sector, and loss of potential cost savings to the state due to a loss of an incentive to seek a private education. Additionally, the loss of funding occurred at at time when many students were in the 3
middle of their funding cycle and unable to find additional resources to continue their education.
The Commission now must focus on the 1,144 promissory note holders in the PEG program who are reported as not enrolled or attending the institution on file at the time of their last disbursement. The ACPE is currently searching to locate these students for inquiry regarding their enrollment or graduation status. Promissory note holders who fail to meet the requirements of the forgivable loan must enter into the repayment program.
The ACPE staff is working with Gold Bridge Partners, Inc. to develop and implement semi-automated online loan repayment software on the AzGrants.gov website. This software is designed to allow the small ACPE staff to handle the increased volume of the Postsecondary Education Grant (PEG) forgivable loans as well as the Private Postsecondary Education Student Financial Assistance Program (PFAP) forgivable loans. This nearly completed web-based software is currently being modified to accommodate the new Math, Science and Special Education Teacher Loan Forgiveness Program loan repayments including interest and the extensive tracking of borrowers and retention in the field of preparation.
The web-based software will automate some of the processes by tracking the borrowers’ repayments or, lack of repayments, and generating the appropriate emails or letters to be sent to them. The Office of the Attorney General is used by ACPE for collections when normal investigative means to locate the former student are unsuccessful or when grantees have been contacted three times and refuse to enter the repayment program. The Attorney General’s office performs this service for a variable fee on every dollar collected.
The Commissioners remain hopeful that the PEG funding will be restored in the future as this program represents a pathway to higher education that is very valuable to the State and its future educated workforce. Additionally, this program along with PFAP is a factor in order for the State to meet the required Maintenance of Effort (MOE) for the College Access Challenge Grant. For which criterion 2 requires that a state maintain a sustained funding stream of financial aid for students attending private Arizona postsecondary institutions. With the recent elimination of funding for the Private Postsecondary Financial Assistance Program (PFAP) and the Postsecondary Education Grant (PEG) programs, future CACG funding for Arizona is in jeopardy.