Assembly Budget panel airs higher-education funding problems

New Jersey is caught between students’ rising demand for financial assistance to attend college and the reality of reduced funding levels, Assembly Budget Committee members were told Tuesday.

“Demand for financial aid continues at unprecedented levels,” said Glenn Lang, the acting executive director for the Commission on Higher Education. He told the lawmakers that there are approximately 510,000 grant and-or scholarship applications, up 10 percent over the prior year.

Yet, as committee chairman Lou Greenwald, (D-6), Voorhees, said, “We’re hemorrhaging students out-of-state.”

Among other things, the governor’s proposed budget seeks $1.3 billion, or .9 percent, less for higher education.

Budget concerns were aired in light of the ongoing efforts of the administration to restructure higher-education oversight. In January, the governor established a Higher Education Council following the recommendation of the governor’s Higher Education Task Force that the Commission be eliminated.

Last year, the cabinet-level post of Higher Education Secretary was created but no appointment has yet been made.

“This is an awful budget by anyone’s calculation,” said Assemblyman Gary Schaer, (D-36), Passaic, who expressed support for restructuring the so-called 529 educational savings plans. Although withdrawals from accounts are not taxed if the money goes toward paying for education, money is taxed when it is placed in such an account.

Michael Angulo, executive director of the Higher Education Student Assistance Authority, agreed that making both ends of that savings program tax-free would spur even more involvement than it already has.

As of February, he explained, there were more than 285,000 such accounts with approximately $2.9 billion in savings.

Both Angulo and Lang outlined for the committee the challenge of meeting needs in this tight economy. For instance, the proposed budget will cut the amount of NJ STARS II scholarships for those who have previously received an award from a maximum of $3,000 per semester to $1,250 per semester.

“We’re doing what we can with limited resources,’’ said Angulo, adding that such programs could make the difference for some students in whether they attend college or not.

In light of such tight financial constraints, Schaer asked the witnesses whether findings of a 2007 State Commission of Investigations report that documented waste and abuse in higher education has led to the Commission conducting more oversight itself, and Lang responded that the Commission – whose staffing has dwindled from 23 to about a dozen people – does not do such work.

Declan O’Scanlon, (R-12), Red Bank, said the last public bond issue for higher education was 1988, meaning the problem has gone unaddressed through numerous administrations in both parties.

Greenwald said he supported the idea of having a bond issue.  “And if the voters say no that’s OK, at least we know where we are,” he said.

Assembly Budget panel airs higher-education funding problems