Coordinating Board for Higher Education Meeting Minutes 12-02

December 4, 2002

The Coordinating Board for Higher Education met at 8:00 a.m. on Wednesday, December 4, 2002, at the Truman State Office Building in Jefferson City. Members present were:

Sandra Kauffman, Chair
John Bass
Dudley Grove
Robert Langdon
Mary Joan Wood, Secretary, joined the meeting at 8:40 a.m.

Members absent from the meeting were:

Diana Bourisaw
Marie Carmichael
Mary Findley
Jim Summers, Jr.

Others attending included:

Quentin Wilson, Commissioner of Higher Education
Trudy Baker, Administrative Assistant
Becky Brennecke, Research Associate for Fiscal & Legislative Affairs
Debra Cheshier, Director of Education Policy, Planning and Improvement Center
Nancy Devino, Research Associate for Academic Technology
Scott Giles, Director of Lender, Institutions and Student Services
Joe Martin, Associate Commissioner for Fiscal & Legislative Affairs
Jim Matchefts, Associate Commissioner and Director of Legal Affairs for MOSTARS/General Counsel for Department of Higher Education
Brenda Miner, Administrative Assistant
Dan Peterson, Director of Student Financial Assistance for MOSTARS
Robert Stein, Associate Commissioner for Academic Affairs & Planning
Leroy Wade, Director for Proprietary School Certification
John Wittstruck, Senior Research Associate

Chair Kauffman called the meeting to order. A list of guests attending the meeting is attached (Attachment A).

Opening Comments

Chair Kauffman stated that Mrs. Wood would arrive later, and with no objections from other board members, the non-decision items were discussed first. Upon Mrs. Wood's arrival, the board proceeded with the action items on the agenda. Chair Kauffman introduced the newest Coordinating Board member, appointed in September, Mr. Robert (Bob) Langdon, from Lexington, Missouri.

Report of the Interim Commissioner

Commissioner Wilson welcomed Mr. Langdon to the Coordinating Board. Commissioner Wilson thanked staff for their support in working on issues facing the department and said he appreciated all the work they do. He also thanked institution representatives for their efforts in dealing with the challenges facing them on their campuses. He offered the support of the Coordinating Board and the Department as the higher education community works together through the current fiscal crisis. Commissioner Wilson thanked Mrs. Grove for her work with the representatives of the two-year, four-year institutions, and the department staff to develop common message points for new legislators. Commissioner Wilson extended his appreciation to Chair Kauffman and to the board for their work with the Governor's office. It is a reflection of the board's hard work in talking with elected officials and meeting the new legislators that the state is now focusing on the long-term impact of higher education.

The new legislators are very interested in the role higher education plays as an economic driver in the state. The higher education community is trying to do more in educational participation, opportunity, and student achievement. The presentation made by the Missouri Community College Association on Tuesday, December 3 to the freshmen legislators is an indication that the higher education community has a common vision of both the potential results higher education can achieve and that these results need to be effectively communicated to the public. The Coordinating Board for Higher Education and the Department will achieve improved performance through various projects. Following are the five main project areas:

• Economic Impact - The Research Alliance of Missouri
  Staff is working to develop a method of combining the research resources of the state, from within or outside the higher education institutions, to obtain more research funding from the state, federal government, and private investors. This is an effort to promote more research and to commercialize the research that is in existence, and to provide improved connection between the business and research communities. The recently established Educational Policy, Planning and Improvement Center (EPPIC) will be involved in helping to advance the Research Alliance. EPPIC staff include Debra Cheshier, director of the unit, John Wittstruck, senior research associate, Teala Sipes, research associate, Wei Zhou, senior associate, and Trudy Baker, administrative assistant.
• Student Participation, Achievement and Performance - Awareness and Outreach
  Missouri is an under-performing state in the area of postsecondary participation. The department, the institutions, and the Department of Elementary and Secondary Education are working to promote early awareness and outreach efforts. Collaborative efforts are vital in making early contact with students. If this contact is not made early in a student's life, they are much less likely to think about the prospect of attending college. In the long-term, these efforts at outreach will increase postsecondary participation. The department will combine efforts and programs such as the Governor's Youth Cabinet, GEAR UP, Resource Fairs and school-college partnerships to achieve these results.
• Financial Aid
  One of the projects in this area is the marketing plan for MOSTARS. Financial aid administrators at institutions are the Department of Higher Education's primary marketing contacts to the people who will be involved in this process. Establishing efficient methods of handling disbursements will enhance the student loan program. MOSTARS is currently searching for a new marketing director. The new marketing director will begin working immediately with MOSTARS staff to develop and implement an effective marketing strategy.

  With respect to the MSLP's disbursement process, MOSTARS has begun negotiations with American Student Assistance (ASA) with the goal of replacing the current ATOM disbursement system with ASA's FastFund disbursement system, at no additional cost to MOSTARS. To assist in this process, ATOM staff members will be visiting ASA's offices reviewing the FastFund system and processes.

• Web Site Redesign
  This project will have a high, positive impact on higher education institutions, parents, and students. The web site redesign will ultimately allow consumers to easily access information about postsecondary education and financial assistance. Several design ideas have been drafted. The project will commence with a chartering session, to be scheduled in the near future.

  During FY 2002, the Missouri Learners' Network (MLN; www.mlnetwork.org) made significant progress toward becoming the state's one-stop education portal. In fall 2001, the MLN was transferred to the Department of Higher Education, where staff assumed the day-to-day responsibilities associated with maintaining the MLN. These responsibilities included a complete redesign of the graphics, navigation, and database structure and language. The MLN Director also re-energized the Department of Higher Education's affiliation with the Missouri National Guard (MoNG), resulting in increased collaboration and consideration in-kind support for ongoing hosting and development of the MLN site. The higher education section of the MLN was formally presented to constituent groups in summer 2002. In December 2002, all necessary security requirements at MoNG were addressed, thereby providing MLN member institutions with the ability to add, delete, or edit their database records via the Internet. Work continues on development of the K-12, community education, and military education sections of the MLN, together with further refinement of the higher education section.

• State Grant Programs Integration Project
  This project, being conducted in collaboration with other state government agencies, affects participation in applying for many different grant programs by combining all of the programs in an easily accessible format. There are 14 additional programs in other agencies, which the Department of Higher Education will attempt to combine into a common look and feel. These five projects have a high impact on the top three results that are included in the Coordinated Plan.

  The State Programs Integration project is on target for implementation for the 2004-2005 academic year. Significant accomplishments this quarter include completion of database models, finalizing the graphical user interface (GUI) for post-secondary institutions, and presentations of the proposed new system to financial aid professionals and high school counselors in Missouri. Current and planned activities for the next quarter include finalizing requirements and system design, continuing system development, and preparing for system testing and training.

  The State Program Database Integration Project Institutional Work Group met on the following dates: September 27, 2001, October 18, 2001, January 23, 2002, June 28, 2002, and December 11, 2002. The State Program Database Integration Project High School Work Group met on June 3, 2002. Meetings with these work groups will continue as staff moves forward with the integration project.

The board will be given regular progress reports on the success of these projects.

Chair Kauffman added her thanks to those people who have played a very important role in the progress that has been made during the last six months - representatives from the two- and four-year institutions, independent colleges, proprietary schools, and members of the public that have been responsive, cooperative and supportive. She offered thanks to the staff and to the board, who have been supportive of the decisions to proceed on various issues. Thanks were given to those who participated on the committee to develop a common message. In particular, she thanked the Missouri Community Colleges Association (MCCA) and Council on Public Higher Education (COPHE) for hosting the New Legislators Tour.

Proposed 2003 Legislative Initiatives

Mr. Joe Martin stated that at this time, no formal legislative proposals have been submitted by the institutions for the board's consideration. The staff will monitor legislation related to higher education issues, and update the board and the institutions with a weekly report. During 2003, the Department of Higher Education staff will construct a plan and analyze ways to consolidate the administration of state-funded scholarship and grant programs currently housed in other agencies. The two bills that have been filed to date are for Missouri Southern and Missouri Western to change their names from colleges to universities, and for Missouri Southern to add three Masters level programs and to modify the structure of their board.

Chair Kauffman stated that she was pleased that the department is pursuing the consolidation of the scholarship and grant programs into the department. Access is the major goal of this endeavor. Mr. Martin responded that ultimately, a provision is necessary for students and perspective applicants to have an easily identifiable source, where they can analyze financial aid availability through all of the state agencies. Mrs. Grove suggested an extensive method of circulating the Department of Higher Education's one-stop source would be through the network of high school and college counselors.

Commissioner Wilson stated that the design of this project would involve the participation of financial aid people and high school counselors, because they are the main user of this information, and the main mode of transfer to the students. This project, which includes a web-site and its integration, will be designed to offer easy accessibility and retrieval to college financial aid people, high school counselors, and others.

Mrs. Grove suggested two other groups in St. Louis, who handle scholarship aid and other assistance to students, are the religious community and the social service network. The United Way has the ability to help the Department of Higher Education communicate to many agencies, which may each have funds for matching, or provide direction to those who still have gaps in their funding. Mr. Bass added that parents are important communicators, and they should be included in the process of the one-stop arrangement.

Annual Report of the CBHE Proprietary School Certification Program

Mr. Leroy Wade presented an overview of the Proprietary School Certification Program, the current activities, a data summary about the institutions and their students, and a directory of schools to give the board a better understanding of the scope and breadth of what the program entails (Attachment B). Through the Proprietary School Certification Program, the department provides improved access to educational services and improved quality of life contributing to higher education being the economic driver of the state. The program is comprised of the following:

• The program's mission is to provide access to quality, post-secondary education and job oriented training through a meaningful and rigorous oversight system. The program is successful, in large part because of the quality of the people who operate the businesses that are involved in private career education in the state. Mr. Wade commended them and recognized their contributions to that purpose.
• The program is a standards-based process involving standards, rules and regulations based upon the statutory framework established in 1983 and amended in 1991. The standards provide a general framework for review of and a decision concerning an institution. Staff base their decision on the nature of that institution and its mission, reflecting the uniqueness of an institution, but also holding them accountable to meaningful standards of operation. Two of the areas the Department of Higher Education analyzes are governance and control, and program content and information. Accreditation establishes independent standards that provide staff with guidance about what the programs involve and how they should be executed. The standards also include faculty qualifications, and financial stability. The Department of Higher Education tries to ascertain if people are serious about starting a new school, if they are committed to it, and if they want it to continue that commitment for the long term. In the area of student services, information and records, the Department of Higher Education staff confirms that the proposed school has an adequate catalog, record keeping systems, transcripts, student policies, admission materials, and other materials required for handing enrollment and operation.

  Proprietary School Certification Actions and ReviewsAs of December 3, 2002, 132 schools have been certified to operate through the Proprietary School Certification Program. They comprise three general groups as follows:

  • Missouri based private career schools - mostly for-profit, very narrowly focused institutions providing technical or business education;
  • Out-of-state institutions - almost exclusively degree granting institutions. They include Lesley University of Massachusetts, Central Michigan University, and institutions that are coming into Missouri to provide a post-secondary education program.
  • Schools that are not offering instruction in Missouri, but have established a physical presence to recruit students. They are required to meet our standards in terms of their operation, and the manner in which they treat students coming from Missouri.

In the area of program diversity, approximately 1500 programs are offered within the private career school sector, which reflects a 7 percent increase this year. Twenty-two percent of the 1500 programs are in a business-related area. Financial aid from all sources was $133 million.

Regarding student data, the total enrollment for the calendar year 2001 was over 60,000 students.This represents a 6 percent increase, with 26 percent of the students being members of an ethnic minority, 20 percent being African American, and 37 percent are degrees seeking. Ninety-one percent of those attending were high school or GED recipients. Nearly 24,600 students completed their program in 2001, representing a 5 percent growth this year. Twenty-five percent of the graduates are members of an ethnic minority, 17 percent are African American, and 14 percent received degrees. Regardless of the proportion of degrees, this sector still offers many short-term certificates, non-degree programs and helps fill that niche in the higher education system.

Regarding graduates by instructional programs, 41 percent of the graduates completed technical and mechanical training programs. This has been a growth area.

Concerning student based performance, the overall graduation rate is 78 percent. The at-risk graduation rate is 82 percent. This group is characterized as students who do not have either a high school diploma or a GED. They are known in higher education circles as ability to benefit students. Their graduation rate is higher even though there are fewer students, which is due to the nature of this type of school - a very supportive organization.

In terms of employment, more than 70 percent of the students are getting jobs in training related fields and 7 percent are going on to further their education.

Mr. Wade recognized the Coordinating Board's Proprietary School Advisory Committee, as being a critical part of the program. Committee members willingly donate their time and energies to help the program move forward, and have contributed to the success of the program. Recognition was given to committee member Mr. Tom Hollins, from the Missouri Welding Institute, for his attendance at the meeting.

The major areas of program functions include consumer protection, technical assistance and public information. In the area of technical assistance, the Department of Higher Education staff spends considerable time working with the new schools. This technical assistance to new school start-up has been a critical addition to the program along with training workshops for all schools. In 2000, the student unit record was revised and is continually improved upon. Consumer information is critically important for the people of the state, whether they are interested in post-secondary education or in starting a school. They need to have access to information on the availability of programs, the schools in existence, and performance information, so they can make informed judgements when selecting a school. The Department of Higher Education staff is working to ensure diploma mills do not spring up in the state of Missouri and to provide information to students and the public about those dangers.

Another challenge for the staff is trying to adjust to the changing nature of many of the schools, which are mostly owned by corporations now. Mr. Bass asked how the Proprietary School Program staff use the information from audits and reviews of schools. Mr. Wade responded that if the financial aid review or audit shows signs of problems, the Department of Higher Education staff responds.

By working in partnership with the Department of Education and with MOSTARS, they can locate the problem, create a solution, and guide the school in the right direction. If there is substantial or continued loss, the staff requests additional information such as a CPA based audit.

Mr. Wade recognized other Advisory Committee members, Karen Watkins from St. Louis, George Holske from St. Louis, Rolla, Cape Girardeau and Jefferson City, and Chris Gearin from St. Louis.

Appointments to the CBHE Proprietary School Advisory Committee

Mr. Wade stated that there were three vacancies in the Committee this year. Commissioner Wilson has re-appointed Karen Finkenkeller from ITT Technical Institute for a full term. Mr. Brian Stewart from Bryan Career College in Springfield, and Ms. Debra Crowe from Concorde Career Institute will fill the two new appointments. Chair Kauffman thanked the new members and wished them success during the next three years.

Chair Kauffman announced that Mrs. Wood had arrived and asked the board for approval of the minutes.

Minutes of October 10, 2002, CBHE Meeting

Mr. Bass moved that the minutes of the October 10, 2002 board meeting be approved as printed. Mrs. Grove seconded the motion, and it passed unanimously.

Proposed 2004 CBHE Meeting Dates

Commissioner Wilson presented the proposed 2004 Coordinating Board for Higher Education meetings and referenced that he and Chair Kauffman had discussed scheduling the meetings in Jefferson City during the legislative session. Following are the proposed meeting dates:

February 6, 2003 - Jefferson City
April 10, 2003 - Truman State University, Kirksville
June 5, 2003 - William Jewell College, Liberty
October 9, 2003 - Moberly Area Community College, Moberly
December 11, 2003 - Springfield
February 12, 2004 - Jefferson City
April 8, 2004 - William woods University, Fulton
June 10, 2004 - Three Rivers Community College, Poplar Bluff
October 14, 2004 - University of Missouri - Kansas City
December 9, 2004 - St. Louis

Chair Kauffman asked the board to consider adopting the proposed 2004 schedule of meeting dates and locations with the provision that they be reviewed, and necessary changes be made if the Department of Higher Education's budget situation indicates that the meetings should be held in Jefferson City.

Chair Kauffman asked the board to consider having the February 6, 2003 meeting in Jefferson City. The April 10, 2003 meeting will be held at Truman State University in Kirksville.

Mrs. Grove stated that the proposed 2004 Coordinating Board for Higher Education meeting dates be amended to give the board the option of changing the meeting locations.

Mrs. Grove moved that the Coordinating Board for Higher Education adopt these dates for the next two years with the locations to be determined later. Mrs. Wood seconded the motion, and it passed unanimously.

Adjustments to the FY 2004 Budget Recommendations

Mr. Joe Martin stated that a financial analysis is required by the five-year mission review process. The five-year mission review financial report for FY 2004 is included as Attachment C. The report provides potential FY 2004 core base budget adjustments. A summary of previously recommended core base budget adjustments in FY 2002 and FY 2003 are included, as well. As a result of the analysis, institutions that were recommended for potential adjustments include: Lincoln University, Northwest Missouri State University, Missouri Southern State College, Missouri Western State College, Southwest Missouri State University, St. Charles Community College, and Three Rivers Community College.

Mr. Bass asked what the Department of Higher Education was suggesting or what was the Governor's view. Mr. Martin responded that last year the board had adopted a process for analyzing core state funding based on FTE basis. The board will be acknowledging that these adjustment amounts have been derived through that process, and they are acknowledging that these adjustments are needed based on this particular methodology.

Mr. Martin explained the report includes an analysis of the University of Missouri. Based on the same methodology and information provided by the University of Missouri (UM), the UM System appears to receive adequate state funding. However, the Coordinating Board for Higher Education's analysis of individual campuses indicates the University of Missouri-St. Louis (UMSL) may not receive an adequate share of state funding from the UM Board of Curators. In addition to the CBHE analysis, UM President Manuel Pacheco stated in his remarks before the Missouri House Subcommittee on Appropriations-Higher Education Equity Funding on October 10, 2001, that UMSL is under-funded relative to its appropriate comparator group. But since the UM System as a whole is adequately funded, no core base budget adjustment is indicated for the UM System.

Based on these findings, the report suggests that perhaps the Board of Curators should look at the amount of state funding that is given to the St. Louis campus, in relation to the total amount of state funding the System receives from the state, to see if any inequities exist. This data does not include the 10 percent core cut in this fiscal year. It may look different if the analysis was done today, but it is a comparison of Missouri institutions to like institutions nationally, and most institutions in several states have received some type of cuts. Chair Kauffman stated that when the process was established, they talked about holding the campuses harmless, if they exceeded the amount. There has never been any recommendation, and no part of the process suggests taking that money away from them. The scope of this analysis is really only in terms of additional funding.

Mrs. Grove asked how this information would be utilized. Chair Kauffman stated, that if the board adopts the report, it needs to become a part of the Department of Higher Education's message in visits with the legislators. Each year that higher education moves forward without funding these core-base adjustments, means the institutions lose more ground.

FY 2004 Capital Improvement Recommendations, Public Four-year Institutions and Linn State Technical College

Mr. Martin stated that the FY 2004 capital improvement recommendation totals just over $150 million. Most of the projects, and most of the institutions' number one priorities are the FY 2001 projects that are still being withheld. Some institutions have submitted different priorities. The recommendations are listed in CBHE priority, in relation to their previously adopted policy and guidelines, regarding capital improvement projects. Those guidelines give priority to renovation projects, and also to projects that had previously received state funding.

Mrs. Grove moved that the Board approve the FY 2004 capital improvement request for the public four-year institutions, and Linn State Technical College for submission to the Governor and General Assembly. Mr. Langdon seconded the motion, and it passed unanimously.

FY 2002 Annual Report of the Missouri Department of Higher Education

Commissioner Wilson presented an outline of the annual report, which has been streamlined from previous years, to focus on Missouri's performance in three key areas: economic growth, educational opportunity and achievement, and quality of education and life. The outline was shaped to communicate in a manner that is consistent with the common message being developed by the Board, the Department of Higher Education and the institutions. More appropriately, this will be a fiscal year report to correlate with the appropriations process and the funding received. Mrs. Lena Hoeflicker added that some of the strategic planning initiatives, and some specific examples of how the institutions contribute to economic growth, quality, and achievement, have been incorporated in the report. The report is scheduled for completion by the beginning of the legislative session and will be a valuable tool in conversations with the legislators. Additional text is in draft form and will be distributed to the board for review in the near future.

Mr. Bass asked about contributions by the institutions building the annual report. Commissioner Wilson stated that the report was consistent with the common message being developed with the two- and four-year institutions. The examples provided in the report are drawn from information received from the institutions on their accomplishments in economic growth, in student participation, and in performance improvement. The report will focus heavily on the institutions. Mrs. Hoeflicker stated that the institutions' efforts toward cost containment would be included as well.

Mr. Langdon moved that the Coordinating Board for Higher Education accept the FY 2002 Annual Report Outline. Mr. Bass seconded the motion, and it passed unanimously.

Standards for Establishing Community College Taxing Districts in Missouri

Dr. John Wittstruck presented information related to the board's administrative rule for establishing new community college taxing districts, and their standards embedded within that rule. Collected information suggests that there is a need to revise this rule, as it is one of the board's public policy tools available to them, to enhance the participation in the state system of higher education. This rule, being so rigorous, may have limited participation in the state system of higher education and particularly in the community college sector. The reasons for this are: the clientele served by community colleges compared to those served by the public four-year institutions are different. Fifty-one percent of the undergraduates enrolled in community colleges are over the age of 22, compared to 35 percent of the undergraduates being over the age of 22 in the public four-year institutions. And students enrolled in the public community colleges have parents with gross incomes of $24,000, compared to students enrolled in the public four-year institutions whose parents have a gross income of $42,000. Nationally, 47 percent of the students enrolled in public higher education are in public community colleges. In Missouri, only 39 percent of the students are enrolled in public community colleges. Missouri has 8 percent more students in the public four-year sector than the national average. Students are choosing community college education. Of the 100 institutions in the nation that enroll the majority of Missouri's students outside the state of Missouri, 14 are public community colleges. Among the top 10 institutions enrolling Missouri freshmen, three are public community colleges - in Kansas, Illinois and Iowa.

The community college delivery system in the nation has matured to the extent that few states are establishing new community colleges. Twenty-five percent of the community colleges in the nation are community career institutions. As it is applied, the rule assumes every community college is going to be alike, but they are different. They serve different communities and different clientele. Consideration should be given for provisions to be built within the rule whereby the board can take into account some of these differences, to promote access within the state and increasing participation. Further background of the proposed language on the rule will be provided to the board in February.

Dr. Wittstruck stated that the assessed valuation standard needs to be evaluated with the possibility of looking at a minimum assessed valuation. There is a requirement in the rule that the petitioner school districts must have 1600 students in 10th, 11th, and 12th grades, a portion of this enrollment comes directly from high school, but it is not the majority of the individuals served by the community colleges. In the rule, the 1.5 percent of the population has to generate 1250 FTE, which is low. Comparing Missouri's rural community college enrollments to their populations, about 2.5 percent to 3 percent of the population is enrolled. Neither the law, nor the rule, allows the board to consider whether or not the state can support more community college districts in the feasibility study they perform when a group submits a proposal. Commissioner Wilson added that this is an important issue, and it is necessary to establish a particular goal and what it will cost, because the reality of startup and operation is definitely related to state financing. Chair Kauffman stated that with the financial requirement in place, it continues to be a strong driving force, and ensures that potential districts have the local support they need before they make their proposals.

Mrs. Grove moved that the Department of Higher Education staff propose revisions to the standards for establishing new community colleges included in 6 CSR10-6.010 for action by the Coordinating Board at its April 2003 meeting. Mrs. Wood seconded the motion, and it passed unanimously.

Lake of the Ozarks Community College Proposal

Chair Kauffman extended an apology to the Lake of the Ozarks Community College Steering Committee for the inconvenience the board caused them in October. The board hopes that they can assist the Lake of the Ozarks as they move forward with this proposal in April, 2004.

Dr. Wittstruck stated that the recommendation addresses, specifically, the proposal presented to the board by the Lake of the Ozarks Community College Steering Committee, and establishes the feasibility study and its relevant information for review and consideration, once the rule is revised, eliminating the need for this feasibility study to be repeated. The steering committee also requests that the board extend their action of April 2001, with regard to State Fair Community College in asking it to limit its offerings in the Lake of the Ozarks area of the state until this decision is resolved.

Mrs. Wood moved that the Coordinating Board for Higher Education accept the September 2002 Lake of the Ozarks Community College Feasibility Study submitted by the Steering Committee as the basis for evaluating the proposal once new or revised standards become effective through the Administrative Rule process. In addition, it is recommended that the Coordinating Board reaffirm its action of April 12, 2001, directing State Fair Community College to limit and not expand its course offerings in the Lake of the Ozarks region of the state. Mrs. Grove seconded the motion, and it passed unanimously.

Update on Two- and Four-year Review of Associate Degree Delivery Policies

Dr. Robert Stein stated that at the board's October 2002 meeting, the board discussed the Coordinating Board for Higher Education public policy on associate degree delivery. The original recommendation to form a task force with representation from the legislature, the Governor's office, and all the educational sectors was delayed for six months. Instead, the board agreed to give public two- and four-year institutions the opportunity to meet and make recommendations for any policy changes. The board asked for regular progress reports at all future meetings until the issue is resolved. Dr. Stein reported that both the Council on Public Higher Education (COPHE) and the Missouri Community Colleges Association (MCCA) have appointed four-person subcommittees. Dr. Ken Dobbins, president, Southeast Missouri State University and Dr. Walter Nolte, president North Central Missouri College are meeting to discuss future timelines for joint meetings between the two subcommittees and to determine the appropriate process they will use in presenting recommendations to the board. Chair Kauffman encouraged the two- and four-year institutions to resolve this issue in a timely fashion. She thanked them for accepting this challenge and indicated that the board looks forward to hearing their recommendations.

CBHE Public Policy on Academic Program Proposals

Dr. Stein stated that at the board's October 2002 meeting, the board discussed its program review policies and procedures and reviewed a draft set of Clarifying Comments. As a result of its discussion, the board placed a moratorium on all future program actions, except for program requests already in the hopper. The moratorium will be in force until the draft clarifying comments are reviewed by institutions and resubmitted to the board for review and action.

Immediately following the board meeting, institutions were encouraged to provide feedback to the draft set of Clarifying Comments. While most community colleges provided feedback, public four-year institutions are just beginning to respond. Dr. Stein indicated that this board item includes a summary of the feedback received to date. In general, concerns were raised about the extent to which the clarifying comments are too restrictive. Many institutions commented about the value of flexibility so higher education maintains its ability to demonstrate timely responsiveness to the demand for new programs by local communities and the state.

The statement in the draft Clarifying Comments concerning cost differentials and geographic location received a lot of attention. Institutions reacted strongly to the draft statement that these factors alone would not be sufficient to establish program need. Several institutions suggested that there are often extenuating circumstances that make a difference in the importance of cost differentials and geographic location. The number of institutions that are available to deliver a program, the potential for collaboration, and the extent of duplication differ around the state. A one-size fits all approach will not work in a state with such diversity.

Institutions also expressed concern that the identification of high priority state needs -- computer related fields, advanced manufacturing, and the life sciences, as well as the quality of K-12 teachers, should not preclude institutions from developing program proposals in other academic areas. Missouri should position itself to deliver programs that will address future occupational needs, not just those that address the needs of existing occupations. During times of economic stress, higher education should concentrate on the development of new programs and new markets.

Other comments were received concerning the recommendations on efficiency, duplication, oversight, and collaboration. A summary of all comments is in the attachment in the board book.

The staff's intent and plan is to prepare a revised draft, which will be sent to all institutions, public and independent, for their comments. The staff hopes to have a revised draft that has institutional support for presentation to the board for review and action at its February 2003 meeting. The staff will strive to represent what they believe is in the common interest of the state and the institutions, in presenting a recommendation for the board to adopt. The staff is also committed to identify any areas of disagreement that are expressed.

Chair Kauffman stressed the importance of this agenda item. All parties are committed to having the moratorium lifted so new program requests submitted to the Coordinating Board for Higher Education can be processed in an expeditious manner. The board is interested in a timely response to the institutions, so they can submit a proposal and can anticipate a relatively short turnaround, which will enable them to proceed with their extremely important business of planning or to meet a need within their community. The board wants to accommodate them in a fair and equitable manner. Chair Kauffman hopes the institutions will continue to be supportive of this agenda item and work with Dr. Stein as he moves forward with the Clarifying Comments.

Report of the CBHE Nominating Committee and Election of Vice Chair

Chair Kauffman suggested the board postpone the election of the Vice-Chair until its February 6, 2003 meeting when the potential of having a full slate of members present is possible. The Governor's office is moving forward expeditiously at making the necessary appointments so that the board will have a complete roster. Mr. Bass moved that the election of the Vice Chair be postponed until the February board meeting. Mrs. Grove seconded the motion, and it passed unanimously.

Mission Accountability: Results Improvement Initiative

Dr. Stein indicated that the intent of this information item is to update the board on the state of designing a Results Improvement Initiative. A key issue is that the Department of Higher Education is trying to move away from a regulatory mode to a performance improvement mode. Consequently, communication about this initiative will have less reference to accountability and more toward results improvement. The letter sent by Commissioner Wilson's to the presidents and chancellors notified all public institutions of the opportunity to review everything that has happened in the past. Institutions have been encouraged to respond by submitting a recommended list of appropriate goals and objectives that can be incorporated into the board's results improvement initiative.

Another issue identified in the Commissioner's letter is an acknowledgement of the staff's interest in exploring ways to integrate the Results Improvement Initiative with ongoing quality initiatives -- specifically, the Higher Learning Commission's Academic Quality Improvement Project (AQIP) and the Missouri Quality Award (MQA). The AQIP process is an alternative means of maintaining accreditation with the Higher Learning Commission, which was formerly the North Central Association (NCA). This alternative allows institutions to replace traditional accreditation with a more intrusive, less paperwork, process. Institutions present a 100-page document and select three projects that will focus on quality improvement. Institutions participating in AQIP are reaffirmed for accreditation at seven-year intervals.

Commissioner Wilson stated that the Results Improvement Initiative with an emphasis on AQIP is one of the Department of Higher Education's six projects. This project will help improve performance, but also focus on the key goals that institutions establish for themselves. It could help the Coordinating Board, by providing better information on performance and drive an ongoing continuous improvement process. It is offered voluntarily by the Higher Learning Commission. The Commissioner encouraged all Missouri institutions to become familiar with AQIP and give serious consideration to becoming an AQIP institution.

In conversation with Representative Carl Bearden, Mrs. Grove relayed the two questions he felt were important for higher education: 1) What has higher education done to be more cost effective and efficient? 2) How does higher education demonstrate that it is delivering the best programs for the dollars? The AQIP process might be one way to help answer these questions for the legislators, the commissioners, the directors and the students. There is still a gap in trust. There is still a lack of documentation. Documentation of any progress made by higher education's efforts toward providing efficient, effective methods, and offering the best programs for the dollar will enhance the case for why higher education should be a strong, viable part of Missouri's future.

Update on the CBHE Committee on Transfer and Articulation

Dr. Stein reported that the Department of Higher Education staff is continuing to look at the responses from the dual credit survey of FY 2001 practices. The Coordinating Board for Higher Education Committee on Transfer and Articulation (COTA) determined that institutions should have the opportunity to validate the accuracy of the analysis. Some questions were initially misunderstood, and in some cases changes have taken place as a result of another year passing. COTA wants institutions to have the opportunity to provide evidence for exceptions concerning dual credit practices as well as to submit additional information, if changes have occurred, that demonstrate greater alignment with state guidelines. COTA will meet on January 16 to discuss the thresholds they want set for each of the criteria. Another report will be issued in February or April. Concerning the general education, competency based, 42 semester hour block of transfer credit, several institutions, have notified the Department of Higher Education of their alignment with the state guidelines and that students are being held to the new requirements. The institutions, which are implementing their new general education programs have been identified on the Department of Higher Education web site. In addition, a statement is included about independent institutions. The Department of Higher Education encouraged students who transfer to independent institutions, to contact those institutions to insure that their transfer will proceed smoothly.

The Independent Colleges and Universities of Missouri (ICUM) will meet on December 4 to discuss the replacement of their representative on COTA.

Chair Kauffman asked if the institutions had indicated that they wanted to renew the Conference on Transfer and Articulation, and perhaps include additional conversations on general education. Dr. Stein indicated that he received several responses from throughout the academic community indicating disappointment about the cancellation of the Coordinating Board for Higher Education Conference on Transfer and Articulation. He indicated that this year, COTA would meet with all Transfer and Articulation officers as part of the University of Missouri Transition Conference. He also suggested that when it becomes financially feasible, a statewide Transfer and Articulation Conference should be held every other year. Chair Kauffman encouraged Dr. Stein, to work with institutions in designing an efficient affordable conference that could be held every two years. Dr. Stein responded that the Committee on Transfer and Articulation (COTA) would explore this with the transfer and articulation officers at their upcoming March meeting, and the Department of Higher Education staff will also explore this possibility with chief academic officers of the institutions.

Update on the Missouri K-16 Coalition

Dr. Stein reported that Missouri's K-16 Coalition is now officially called the Pre K-16 Coalition. This item acknowledges the "No Child Left Behind" legislation, and it acknowledges the Governor's Business and Education Roundtable. The Department of Higher Education is interested in focusing on early outreach and awareness and on teacher quality. The Department of Higher Education is pursuing those issues with the Department of Elementary and Secondary Education (DESE), with the Governor's office, and with the legislators. The Department of Higher Education conducted a very successful math symposium - the Southwest Center for Educational Excellence in Algebra for All Program. The purpose of the symposium was to provide higher education and their K-12 partners an opportunity to work together on math reform.

Academic Program Actions

Dr. Stein stated that this item contains six new programs and one program change that were in the hopper before the moratorium was initiated. He acknowledged that one independent sector institution felt that there was some confusion about the Coordinating Board's relationship to public institutions in contrast to independent institutions, in regard to program review. The Department of Higher Education approves programs at public institutions, but merely reviews and/or comments on programs at independent institutions. For the record, the Department of Higher Education has issued letters to presidents and chancellors, as well as to Representative Carl Bearden, acknowledging the distinction between the independent sector relationship and the public sector relationship regarding program review. Dr. Stein asked that these letters be written into the record of the board. (Attachment D).Distribution of Community College Funds

Mr. Martin stated that in October and November, the Department of Higher Education distributed over $22.5 million in general revenue and Lottery funds for operating appropriations to community colleges and nearly another $100,000 in capital appropriations to community colleges.

Update on State Audit Recommendations

Mr. Martin reported that all of the recommendations have been implemented to date with the exception of two. One of the recommendations is to periodically review the procedures the colleges and universities use to determine eligibility for financial aid. The Department of Higher Education staff is in the process of developing and testing a plan, contingent upon funding conditions and staffing levels, to be operational next academic year. The other item is the Advantage Missouri Program, which the staff hopes to have implemented the tracking system by the end of December. Chair Kauffman thanked Mr. Martin and those responsible for the rapid response to the audit report received on September 12.

MOSTARS Update

Dr. Jim Matchefts presented information relating to the new student loan collection contracts, which is one of several items listed in the MOSTARS Update, and distributed 2 handouts (Attachments E). MOSTARS is a guarantee agency under the Federal Family Education Loan Program. The loans are made by private lenders, guaranteed by MOSTARS, and reinsured by the federal government. In this state fiscal year, MOSTARS guaranteed approximately $652 million in student loans for Missouri students and families. MOSTARS operates an aggressive default prevention program, in conjunction with the schools and lenders in Missouri. As a guarantee agency, it is required by federal law to purchase defaulted student loans, and make efforts to collect those loans.

The Department of Higher Education has been working on a project with the State Division of Purchasing on putting new collection agency contracts in place. Commission rates are paid to the collection agencies for the various types of accounts. First-time placement accounts are those accounts sent to the collectors for the first time. The second placement accounts have been placed with a collection agency previously. The rehabilitation program, available under the federal laws and regulations, allow borrowers to get their loans out of default by making 12 consecutive, on-time, full monthly payments, and clear their credit history. The consolidation collections provide the borrower, with defaulted loans, a consolidation loan to pay off all loans. The borrower has an entirely new loan, within another program under the federal laws and regulations.

In 1990, the Department of Higher Education paid an average of 21.08 percent commission for first placement accounts. In 1996, it was lowered to 14.8 percent, and recent contracts are at 7.5 percent. There are three active contractors that will begin January 1, 2003. They are highly qualified firms that understand student loan collections, and DHE feels they will do a great job. The second placement accounts commission went from 28 percent in 1990 to 8 percent this year. The rates for the rehabilitation accounts are lower, because the loan is repurchased by the lender in a lump sum payment, and doesn't require much work. The Consolidation rates are now just over 5 percent. The profit margin for collections is becoming greater. The Department of Higher Education retains 24 cents for every dollar collected on first and second placement loans, which pays the collection agencies and covers overhead expenses. On consolidation and rehabilitation loans, only 18.5 percent is retained on every dollar.

The margins are small, but they are producing profitability for the guarantee agency, which goes into the student loan guarantee agency, operating fund. Its primary purpose is to maintain the financial viability of the guarantee agency. As the operating fund grows, it allows expansion of the default prevention programs, to fund early awareness and outreach programs for college students and pre-college students, and to initiate programs on debt management and credit counseling. When sufficient revenues are available from the operating fund, a type of MOSTARS grant program will be initiated in a modest fashion. Another cost saving measure, being used to increase the profitability of the loan program, is the new contract with American Student Assistance. MOSTARS is becoming leaner, cutting the fat and using the additional profits to benefit the students.

Other Items

Chair Kauffman recognized Dr. Blanche Touhill, Chancellor of the University of Missouri - St. Louis. Chair Kauffman thanked Dr. Touhill for her efforts on behalf of higher education of Missouri and wished her much joy and happiness in her retirement. A plaque was presented to Dr. Touhill in appreciation of her leadership and efforts to promote the University of Missouri- St. Louis's state and national status as an outstanding institution of higher education.

Executive Session

Mrs. Grove moved that the board proceed into executive session for the following purpose:

RSMo 610.021 (3) relating to "hiring, firing, disciplining or promoting of particular employees by a public governmental body when personal information about the employee is discussed or recorded."

Mr. Bass seconded the motion, and it was unanimously passed with the following vote:

Mrs. Kauffman - yes
Mr. Bass - yes
Mrs. Wood - yes
Mr. Langdon - yes
Mrs. Grove - yes

Adjournment

There being no further business to come before the board, the meeting was adjourned at 10:40 a.m.

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Sandy Kauffman, Chair

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Mary Joan Wood, Secretary