State performance scholarship applications down 9 percent this year
State education officials see a 9 percent decline of Alaska Performing Scholarship applications and awards this year, which they attribute to uncertainties and controversy in the state budget last spring, a time when parents and students are deciding whether high school seniors will attend higher education in Alaska or the Lower 48. Another negative sign is that fall enrollment at the University is down statewide and particularly at the University of Alaska Anchorage.

Worry: Losing Alaska young to out-of-state higher education and not getting them back
Alaska educators and employers are concerned about high school graduates going out of state because studies show most do not return. Research shows that 80 percent of students graduating from higher education remain in the area of colleges and universities they attended. The Legislature funded $11.75 million in performance scholarship grants under the program in Fiscal Year 2019. Grant recipients must attend qualifying post-secondary schools in the state including the University of Alaska. A second state education grant program provides needs-based assistance to eligible modest-income students, who must also attend in-state schools. In FY 2019 the Legislature approved $5.875 million for these.

The state also provides more conventional college loans, which can be used in-state or out-of-state and last year there were 835 of these totaling $8.7 million. Under a separate “family loan” program, there were 62 education loans totaling $700,000. Loan volumes appear stable under the conventional loan programs. Recipients are split about 50-50 in attending Alaska or Lower 48 schools, state officials tell us.

New initiative: Student loan repayment as a recruiting tool for employers
A new initiative of the state postsecondary education commission is development of an Alaska employer-assisted student loan program as a recruiting tool. The commission has the idea under development and is working with the Alaska Society for Human Resources. Last year the Legislature authorized a state-coordinated program for health care providers to assist new-hires with payment on medical school loans (state involvement is required for certain federal tax benefits). National data shows that with loan repayment assistance 86 percent of new-hires commit to work for five years and that employee retention rates are, on average, 36 percent longer.

Legislature chips away at higher education fund:
One challenge for state postsecondary assistance is that the Higher Education Investment Fund, (HEIF) which supports the college loans, is shrinking. The Legislature has been chipping away at the balance over several years, using the HEIF as a funding source for other state programs. The HEIF has a current balance of $340 million, but that’s down from $400 million originally appropriated.