COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES APPROPRIATIONS COMMITTEE HEARING BUDGET HEARING STATE CAPITOL MAJORITY CAUCUS ROOM HARRISBURG, PENNSYLVANIA TUESDAY, FEBRUARY 26, 2008, 11:30 A.M. VOLUME II OF VI PRESENTATION BY STATE SYSTEM OF HIGHER EDUCATION BEFORE: HONORABLE DWIGHT EVANS, CHAIRMAN HONORABLE MARIO J. CIVERA, JR., CHAIRMAN HONORABLE STEPHEN E. BARRAR HONORABLE STEVEN W. CAPPELLI HONORABLE H. SCOTT CONKLIN HONORABLE CRAIG A. DALLY HONORABLE GORDON R. DENLINGER HONORABLE BRIAN ELLIS HONORABLE DAN B. FRANKEL HONORABLE JOHN T. GALLOWAY HONORABLE WILLIAM F. KELLER HONORABLE TIM MAHONEY HONORABLE KATHY M. MANDERINO HONORABLE FRED McILHATTAN HONORABLE DAVID R. MILLARD HONORABLE RON MILLER HONORABLE JOHN MYERS HONORABLE CHERELLE PARKER HONORABLE JOSEPH A. PETRARCA HONORABLE SCOTT A. PETRI HONORABLE SEAN M. RAMALEY 2 1 BEFORE (cont.'d): HONORABLE DAVE REED 2 HONORABLE DOUGLAS G. REICHLEY HONORABLE DANTE SANTONI, JR. 3 HONORABLE MARIO M. SCAVELLO HONORABLE JOSHUA D. SHAPIRO 4 HONORABLE JOHN SIPTROTH HONORABLE MATTHEW SMITH 5 HONORABLE KATIE TRUE HONORABLE GREGORY S. VITALI 6 HONORABLE DON WALKO HONORABLE JAKE WHEATLEY, JR. 7 8 ALSO PRESENT: MIRIAM FOX 9 EDWARD NOLAN 10 11 JEAN M. DAVIS, REPORTER NOTARY PUBLIC 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 I N D E X 2 TESTIFIERS 3 4 NAMES PAGE 5 DR. PETER H. GARLAND 4 6 STUDENT JOSEPH M. PELTZER 4 7 DR. ANGELO ARMENTI, JR. 27 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 1 CHAIRMAN EVANS: We will now reconvene the 2 House Appropriations Committee meeting. 3 Today we have two individuals on the panel. 4 We have Peter Garland, who is representing the 5 Chancellor of the State System of Higher Education, 6 and then we have a guest who is a student at 7 Shippensburg University. He is here to give his 8 reaction. 9 Peter, we go right to the questions. Please 10 introduce yourself, and we'll have our guest 11 introduce himself. 12 DR. GARLAND: Peter Garland, Executive 13 Vice Chancellor for the State System of Higher 14 Education. 15 STUDENT PELTZER: My name is Joe Peltzer. 16 I'm a senior at Shippensburg University. 17 CHAIRMAN EVANS: Peter, the issues that I 18 raise are questions around teacher education. Give 19 me a little sense of the whole element the Governor 20 talks about, that we need good teachers in our 21 classrooms. Can you talk a little bit about what 22 is going on with teacher education in the State 23 System? 24 DR. GARLAND: Our universities prepare about 25 40 percent of the new teachers in Pennsylvania, and 5 1 we take that job very seriously. 2 We are certainly concerned in terms of the 3 quality of education for all students in the 4 Commonwealth and believe that our programs for 5 preparing teachers do the best they can in terms 6 of preparing them for the realities of the 7 classroom. 8 A current issue that we're dealing with in 9 terms of teacher education, and I know one that 10 certainly has had interest among the members of the 11 General Assembly, is the changes in the teacher 12 education policies by the State Board of Education, 13 which are going to provide us an opportunity to 14 fundamentally change the ways in which we prepare 15 teachers to meet -- I think better -- the demands of 16 the classroom. 17 We will be looking at changing most of those 18 programs over the next year or so. It's a major 19 challenge for our universities and will entail a 20 great deal of faculty time and energy in doing that. 21 But I think those are strong changes that will enable 22 the teachers coming out to even better address the 23 needs of students in our classrooms throughout 24 Pennsylvania. 25 CHAIRMAN EVANS: I'd like to introduce 6 1 another person, if he would like to move to the 2 table, President Armenti from California University 3 of Pennsylvania. He's also here. Do you want to 4 join them at the table, too? You can sit right 5 there. 6 Joe, let me ask you a question since you're 7 there, to give me, from your perspective, a little 8 reaction from a student's perspective of what is 9 taking place among the State System, issues like 10 tuition, things of that nature. Tell me how you see 11 it from your perspective. 12 STUDENT PELTZER: I still believe that the 13 State System provides an incredible quality education 14 to the students. It's a decision that I made to 15 attend the State System institution that I would not 16 have changed after going through 4 years of education 17 there. 18 I think that tuition is incredibly 19 affordable. Again, I think that with the changes 20 that our campuses are undergoing through facilities, 21 additional academic programs, and such, I'm firmly 22 behind what the State System has been doing. 23 CHAIRMAN EVANS: Chairman Mario Civera. 24 CHAIRMAN CIVERA: Thank you, Mr. Chairman. 25 Basically what I wanted to ask was what we 7 1 asked of the State-relateds with the situation with 2 the money market and the submortgage market. How is 3 the State System preparing for this situation with 4 the loans and the grants? You know, could you give 5 us some idea? 6 DR. GARLAND: Sure. As my colleagues for 7 the State-related universities I think mentioned, all 8 of us were participating in a summit held by PHEAA 9 last week to begin to address this issue. 10 It's certainly one that I don't think anyone 11 knows yet what the actual outcome is going to be, but 12 one that we are incredibly worried about in terms of 13 our students having access to the dollars they might 14 need to afford their education. 15 The continuing crunch in the credit market 16 certainly is affecting PHEAA's ability to enter the 17 loan market and create the funds that are necessary 18 for students to borrow. That was the impetus for 19 that summit. 20 I think there are other dimensions of it in 21 terms of knowing how many of our students and their 22 families use home-equity loans, use various other 23 credit vehicles to help cover the cost. 24 What we know to date is the fact that there 25 is instability and concern in the credit markets 8 1 about credit. We don't necessarily know how that's 2 going to affect the availability of loans coming into 3 the future. It's something that all of us I think 4 are going to have to monitor very carefully. 5 Our students, certainly like the students at 6 all colleges and universities, rely on a variety of 7 financial aid packages to make certain that they have 8 what they need to afford. 9 Loans are certainly a critical part of that. 10 The majority of our students are in the Stafford 11 Loan, subsidized and nonsubsidized. That's our 12 largest portion, and that program is not going to be 13 affected by the current issues. But those who need 14 to borrow additional dollars in Plus Loans and other 15 areas, that gets a little bit more of a concern for 16 us. 17 Like my colleagues in higher education, we 18 will be monitoring that carefully and see what we can 19 do. 20 CHAIRMAN CIVERA: Do you believe that there 21 could be a drop off of the student population as far 22 as attendance in the State System with this? 23 If the schools are not really prepared, you 24 know, your financial office is not really prepared to 25 give alternatives, I mean, what do you foresee with 9 1 this? Because I don't see this money market moving 2 in the direction where it's going to clear up in the 3 next 2 years and in some type of fashion where we 4 could be helping out, like we were normally doing 5 before. 6 DR. GARLAND: Sure. I think that will 7 happen, what my best guess is that will happen is 8 that, first, students and families will look to other 9 credit markets, other vehicles, other loan mechanisms 10 that may not be as attractive in terms of rate, but 11 will look to some of those first. 12 I believe, depending on what people can 13 afford in terms of their ability to gain loans in 14 that market, there may be some who have to move to 15 lower-cost institutions, particularly for those 16 that are just entering college. That may mean that 17 more move to system universities or community 18 colleges. 19 For those that are currently enrolled, 20 particularly those that are entering their junior and 21 senior years, when they've truly made that commitment 22 to the university and need to get done, that's the 23 stress point, I think, that we don't know yet what 24 that's going to cause in terms of students perhaps 25 having to drop out for a semester, or in many cases, 10 1 to drop down in the number of credits that they take 2 and seek other employment to continue to be able to 3 afford that education. 4 CHAIRMAN CIVERA: Thank you.