Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 1

Opportunity Scholarship and Opportunity Expansion Programs

Preliminary Report

Legislative Auditor’s Conclusion: The Washington State Opportunity Scholarship (WSOS) complies with statute to provide scholarships to low- and middle-income students. WSOS can improve legislative reporting by coordinating with state agencies.

September 2019

Casey Radostitz | Jennifer Sulcer | Joshua Karas

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 2

In 2011, the Legislature created the Opportunity Scholarship and Opportunity Expansion Programs. The legislation also directed a JLARC review (ESHB 2088).

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 3

Opportunity Scholarship provides funds to students

• Up to $22,500 over five years

• Scholarships to eligible students (Washington resident, below 125% MFI, pursuing bachelor’s degree, approved major, 2.75 minimum GPA)

• New programs managed by WSOS not included in our review

(Career and Technical Scholarship, advanced health professional degrees, rural jobs program)

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 4

Opportunity Expansion Program provided funds to university programs

• $6 million raised before funding mechanism expired in 2015

• CWU, WWU, UW received funds

• University programs have secured future, ongoing funding

• Too soon to determine student outcomes

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 5

Presentation overview:• Opportunity Scholarship

organization• College costs

• Student outcomes • Legislative reporting

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 6

WSOS complies with statute and provides scholarships to low- and middle-income students pursing bachelor’s degrees in high-demand fields.

Opportunity Scholarship organization

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WSOSstaff works with

partners to administer the

scholarship

WSOS BOARD

• Oversees the Scholarship• Approves eligible majors• Approves selection criteria

WASHINGTON STEM

WSAC COLLEGES & UNIVERSITIES

• Package scholarships with other aid• Verify satisfactory academic

progress

• Program administrator• Distributes scholarships to student’s

school• Manages WSOS accounts

• Reviews applicants financial eligibility and residency

• Verify and distribute state match

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 8

$88 million

$87million

WSOS is funded by private donations and state matching dollars

PRIVATE STATE MATCH RECEIVED

$175million

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 9

WSOS has funded more than 10,000 Opportunity Scholars

$64 MillionSCHOLARSHIP COSTS

21,000 Scholarships between academic years 2012-13 and

2018-19.

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 10

WSOS has funded more than 10,000 Opportunity Scholars

$64 MillionSCHOLARSHIP COSTS

21,000 Scholarships between academic years 2012-13 and

2018-19.

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WSOS has spent $14 million on non-scholarship costs since FY 2013

$14 MillionNON-SCHOLARSHIP COSTS

• Salaries and benefits• Fundraising and lobbying• General operating costs• Providing scholars supports• Program administration fee

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Reported program administration fee is only a portion of total non-scholarship costs

FY 2018$2.95 Million

NON-SCHOLARSHIP COSTS

PA FEE$370,000

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 13

WSOS should include its overall non-scholarship costs, including the total cost to administer the Opportunity Scholarship program, in its annual legislative report.

Legislative Auditor’s Recommendation

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 14

Opportunity Scholars have lower out of pocket costs and borrow less than their peers.

Opportunity Scholars’ college costs

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Other students who met eligibility requirements

Process for analyzing college affordability

Identify a comparison group

Define college affordability

Analysis

Out of pocket costs

Unmet need

Student loans

5 years of data

Not causal

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 16

48.6%State Need Grant

Opportunity Scholars also receive federal and state grants and scholarships

60.9%Federal Pell Grant

11.9%College Bound

Scholarship

Data source: Office of Financial Management’s Education Research and Data Center

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 17

Opportunity Scholars have lower out of pocket costs

Likely more affordable

$11,062

$14,244

OPPORTUNITY SCHOLARS

PEERS

Average annual out of pocket costs

Cost of attendance

Grants and scholarships

Out of pocket costs (net price of college)

Data source: Office of Financial Management’s Education Research and Data Center

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 18

Opportunity Scholars have lower unmet need

Likely more affordable

$4,827

$9,892

OPPORTUNITY SCHOLARS

PEERS

Average annual unmet need

Cost of attendance

Grants and scholarships

Family contribution

Unmet need

Data source: Office of Financial Management’s Education Research and Data Center

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 19

Opportunity Scholars borrow less often

45.1%

63.0%

OPPORTUNITY SCHOLARS

PEERS

Percent taking out student loans

Student borrowing is the percentage of students taking loans each year and the average annual loan amount for those taking student loans.

Data source: Office of Financial Management’s Education Research and Data Center

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 20

Opportunity Scholars borrow less

Likely more affordable

$7,156

$9,125

OPPORTUNITY SCHOLARS

PEERS

Annual amount for those taking loans

Student borrowing is the percentage of students taking loans each year and the average annual loan amount for those taking student loans.

Data source: Office of Financial Management’s Education Research and Data Center

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 21

Opportunity Scholars are more likely to continue their education. Early recipients have graduated in high-demand fields.

Opportunity Scholar outcomes

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Scholars return to school in their second year at higher rates than their peers

96%

This rate is an early indicator of whether a student will graduate.

Of Opportunity Scholars returned to school.

Of their peers returned to school.89%

Data source: Office of Financial Management’s Education Research and Data Center

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 23

84%of WSOS graduates

earned high-demand STEM or health care

degrees

Data source: Office of Financial Management’s Education Research and Data Center

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 24

Opportunity Scholars

83% employed in WA within 1 year of graduation

Of those employed full-time

Earned on average $66,100 and 69% earned at least middle-

income wages

Other students who met eligibility requirements

Peer Group

77% employed in WA within 1 year of graduation

Of those employed full-time

Earned on average $58,200 and56% earned at least middle-

income wages

Initial results suggest graduates are employed in middle-income jobs

Data source: Office of Financial Management’s Education Research and Data Center

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WSOS could improve reporting with financial aid and employment information collected by state agencies.

Legislative reporting

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WSOS collects some information…

Applicants’ demographic information.

Scholars’ major and graduation status.

Survey of graduates’ employment outcomes.

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…and issues annual legislative reports that contain required information…

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…but does not have access to the financial aid or employment information state agencies collect.

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WSOS should develop and implement a plan to coordinate with state agencies such as ERDC, WSAC, and ESD to provide additional information in its annual legislative reports.

Legislative Auditor’s Recommendation

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leg.wa.gov/jlarc/AuditAndStudyReports

Proposed Final Report | December 2019

Full Report

Next Steps

Preliminary Report: Opportunity Scholarship and Opportunity Expansion Programs September 2019 31

Contact Us

Casey Radostitz360.786.5176casey.radostitz@leg.wa.gov

Valerie Whitener360.786.5191valerie.whitener@leg.wa.gov

Research Analysts

Project Coordinator

Joshua Karas360.786.5298joshua.karas@leg.wa.gov

Jennifer Sulcer360.786.5181jennifer.sulcer@leg.wa.gov

Ryan McCord360.786.5186ryan.mccord@leg.wa.gov

Legislative Auditor

Keenan Konopaski360.786.5187keenan.konopaski@leg.wa.gov

www.leg.wa.gov/jlarc