HB 742 -- Higher Education Student Funding Act

Sponsor:  Bearden

This bill changes the laws regarding state funding of higher
education.  By August 28, 2006, the Department of Higher
Education is required to do a study of financial aid programs
recommending necessary changes to the law for the 2007
legislative session and implementing changes by January 1, 2008,
and report the results to the Governor, General Assembly, and the
Joint Committee on Higher Education.  The review assumes, but
does not mandate, that the A+ Program would be a model for the
first two years of any financial aid program, with Bright Flight
as the model for a merit-based component and the Gallagher
Program as the model for need-based aid.  Aid should be portable,
and no combination of forms of aid that contains state aid should
result in more than the actual costs.  Public institutions must
disclose the amount of aid coming from non-state sources.  When
per-student funding becomes effective, 20% of any additional
revenues must be directed to increased financial aid, with 75% of
that amount going to need-based aid.

Beginning July 1, 2006, the Coordinating Board for Higher
Education will provide certain services through fee-for-services
contracts, including services in rural areas, delivery of basic
courses prerequisite for post-secondary work, services needed to
meet reciprocal agreements, and services to increase economic
development opportunities.  These contracts will not increase the
per-student reimbursement rate and must be consistent with
performance contracts.  The board will make funding
recommendations that take fee-for-service contracts into account.

When state higher education operating appropriations reach their
Fiscal Year 2002 level, public institutions will qualify for
additional funding only if they establish performance measures;
establish performance contracts predicated on the performance
measures; and, where applicable, establish fee-for-services
contracts for non-self-supporting programs.  The bill contains
instructions for notice to the Revisor of Statutes of the
fulfillment of contingencies.

Upon the bill's effective date, higher education services to
students will be reimbursed by the state at a rate per student
for the first two years and a different rate for the second two
years, as established by the board in conjunction with the
institutions.  The first two-years' rate will be no more than the
lowest community college tuition, and the second two-years' rate
will be no more than the lowest tuition charged at a public
four-year institution.  The board will annually request
additional funding for inflation and for unfunded enrollment
growth, as specified in the bill.

Performance contracts of up to five years, based on improving
access, quality, efficiency, and addressing state needs, must be
entered into by public higher education institutions and by any
qualified private institution providing services under a
fee-for-services contract.  Performance contracts will exempt an
institution from certain purchasing regulations and from academic
program approval, as long as the programs fit the institution's
mission.  Proposed tuition increases must be reported to the
board.

The bill also establishes the Joint Committee on Higher Education
with 14 members, to meet at least every two years, beginning in
2006.  The committee will review the progress of higher education
reform and conduct studies, as it deems necessary, on higher
education finance in order to make recommendations to the General
Assembly.

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:20 pm