FISCAL NOTE

Date Requested: January 15, 2020
Time Requested: 05:29 PM
Agency: Higher Education Policy Commission
CBD Number: Version: Bill Number: Resolution Number:
2472 Introduced HB2065
CBD Subject: Actions, Suits and Liens


FUND(S):

General Revenue

Sources of Revenue:

General Fund

Legislation creates:

Creates New Expense



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    House Bill 2065, if enacted, would create a new scholarship available to all West Virginians upon graduation from high school that remain in West Virginia to pursue an associate or bachelor’s degree of $10,000 per year.The only academic requirement is that the person have a 2.0 GPA, and graduate in no more than four years for an undergraduate degree or two and a half years for an associate degree; if the recipient, after graduation, stays and has full-time employment in West Virginia, repayment is forgiven on a year-to-year basis; if the person does not graduate or leaves the state after graduation, or fails to get a full-time job, the scholarships are converted to student loans and must be repaid.
    
    The initial annual cost of this legislation would be approximately $55.7 million. Upon full implementation, the annual costs would be about $155.5 million.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 55,677,000 155,533,000
Personal Services 0 316,000 412,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 55,361,000 1,555,121,000
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    Current PROMISE Recipients
    
    
    The estimates are calculated based on the following assumptions for current PROMISE recipients:
    
     Current PROMISE recipients continue to receive their current scholarship award
     until the completion of the 4th year of the most recent PROMISE cohort.
    
     The estimates of the number of POPMISE Scholars each year and the total funding is
     calculated as the three-year average based on the latest data available.
    
    
    New Promise for All Recipients
    
    
     Students who qualify for the new Promise for All Scholarship are:
     Considered in-state residents based on tuition and fees being changed
     Enrolled as full-time or part-time students in a public or an independent
     postsecondary institution
    
     Enrolled as first time freshmen within two years of high school graduation in the
     fall, spring, or summer semesters
    
     Qualified for renewal given that they maintain 2.0 cumulative GPA
    
    
    Total funding and number of student recipients of the PROMISE for All Scholarship
    were estimated based on the following assumptions:
    
     Number of students enrolling in public institutions (two-year and four-year) and
     independent institutions are estimated based on the three-year average of the
     latest available data
    
     85% of the qualifying students will accept the award based on the past PROMISE
     yield rate.
    
     Student retention for students who return the following years and maintained 2.0
     or higher cumulative GPA was estimated based on the three –year average for the
     latest cohort data available. Retention from year 1 to year 2 was estimated for
     two-year public institutions and retention from year 1 to year 2, year 1 to year
     3, and year 1 to year 4 was estimated for four-year public institutions. The
     retention for students attending independent institutions was assumed to be the
     same as the public four-year institutions.
    
     Administrative cost is estimated at $20,000 per 1,000 students serviced.
     Administrative cost is associated with ensuring student initial and renewal
     eligibility as well as tracking student employment and repayment restrictions.
    
    
    Two – Year Public Institution Estimates
    
    
     Estimated cost for full-time students attending two-year public institutions was
     calculated as the average tuition at community and technical colleges for 2017
     ($3,936). No room and board was included in the estimated funding for students
     attending two-year public institution.
    
     Estimated cost for part-time students attending two-year public institutions was
     calculated as the average tuition at community and technical colleges for 2017
     prorated for the average number of credits attempted per year (14) for a total of
     $2,296. No room and board was included in the estimated funding for students
     attending two-year public institution.
    
     Retention from year 1 to year 2 for students attending two-year public colleges
     was calculated as the three-year average retention for students attending
     community and technical colleges and maintaining 2.0 or higher cumulative GPA
     available for the last three cohorts.
    
     Separate retention rates are calculated for full-time and part-time students.
    
    
    Four-Year Public Institution Estimates
    
    
     Estimated cost for full-time students attending four-year public institutions was
     calculated as the average tuition and room and board at public four-year colleges
     and universities for 2017 ($15,935). Since the proposed scholarship allows for
     awards up to $10,000, that rate was used in the calculations for estimating the
     cost.
    
     Estimated cost for part-time students attending four-year public institutions was
     calculated as the average tuition at public four-year colleges and universities
     for 2017 ($7,212) prorated for the average number of credits attempted per year
     (11) for a total of $3,305. No room and board was included in the estimated
     funding for students attending four-year public institutions part-time.
    
     Retention from year to year for students attending four-year public colleges and
     universities was calculated as the three-year average retention for students
     attending public institutions who reenrolled and maintained cumulative GPA of 2.0
     or higher in the last three cohorts.
    
     Separate retention rates are calculated for full-time and part-time students.
    
    
    Independent Institutions Estimates
    
    
     Estimated cost for full-time students attending independent institutions was
     calculated as the proposed scholarship award of $10,000 since the tuition and fees
     and room and board rates are higher than $10,000.
    
     Retention from year to year for students attending independent colleges and
     universities was calculated as the three-year average retention for students
     attending public institutions who reenrolled and maintained cumulative GPA of 2.0
     or higher in the last three cohorts. Retention rates for students attending
     independent institutions are not available at this time.
    
    
    



Memorandum


    



    Person submitting Fiscal Note: Ed Magee
    Email Address: edward.magee@wvhepc.edu