Florida Trend | Florida's Business Authority

Aid For Everybody?

In 1979, the state's private, non-profit colleges persuaded the Florida Legislature to create a package of financial aid available to Florida residents who wanted to attend Florida-based private schools. The private colleges sold the William L. Boyd IV Florida Resident Access Grant (FRAG) program as a tuition equalizer between the public and comparable private schools -- and as a low-cost, tax-saving way to generate more bachelor's degrees for a fraction of what the state pays to send a student to a state university.

As enrollment has grown rapidly at state schools in recent years and state funding has lagged, the private schools have called for increased FRAG funding to ease the growth pressure on the state system. Funding for the program this year totals $79.9 million, or $2,369.17 per student.

Last year, however, three for-profit schools used the same arguments about cost and access to persuade the Legislature to create another grant program for Florida residents to attend their campuses. In its first year, the Access to Better Learning and Education (ABLE) program handed out a total of $1.8 million, $1,500 each to 1,200 students.

William Abare, president of Flagler College: "Do we as taxpayers in the state of Florida want to provide this assistance to institutions operating in the state of Florida but whose base of operations is in another state?"

That's a small sum in terms of student aid, only a smidgen of the $377-million pool of direct state financial aid to college students. But the program is slated to expand this year, raising the hackles of the private, non-profit schools -- in particular, the 28 members of the Independent Colleges and Universities of Florida, a body of non-profit, Florida-chartered schools accredited by the Southern Association of Colleges and Schools.

The non-profit schools -- joined by state colleges and universities -- question whether it's right for the state to send aid to students of the three for-profits. And they worry that the three schools now eligible for ABLE grants may become a horde of competitors from both inside and outside Florida.

"The concerns would be that out-of-state institutions are going to be getting Florida taxpayer money as well as national corporations involved in higher education getting Florida taxpayer money," says Ed H. Moore, ICUF's executive director.

The state needs to debate the worth of ABLE before it goes forward, says William T. Abare Jr., president of private Flagler College in St. Augustine, whose students qualify for FRAG money. At a time when the state isn't adequately funding higher education, it shouldn't channel aid to new institutions, he and his peers contend.

"This will demonstrate in five years a very innovative, small, not expensive opportunity to meet a public demand," says Art Keiser, founder of for-profit Keiser Collegiate System.

"Do we as taxpayers in the state of Florida want to provide this assistance to institutions operating in the state of Florida but whose base of operations is in another state? I think that's a reasonable question for the state policy-makers to ask," Abare says.

The state's public universities, community colleges and ICUF schools, through the Florida Association of Colleges and Universities, have called on the Legislature to eliminate ABLE. "The state should not be investing state dollars into No. 1, for-profit schools, and to schools that are chartered outside Florida," says Ray Ferrero Jr., the Florida Association president and president of Nova Southeastern University.

Some schools whose students might eventually get funding under ABLE are state universities from other states -- meaning Florida taxpayers would be supporting the schools of other states, Ferrero says.

The response? If the state's worried about cost and access to education, what difference does it make who provides the educational services, asks Art Keiser, founder of the for-profit, Fort Lauderdale-based Keiser Collegiate System, a 20-campus institution that has doubled enrollment to 8,000 in five years. "Our public colleges and universities cannot even begin to think about serving them," says Keiser. "It provides the state a very low-cost alternative to building new buildings and new campuses and new universities and new colleges, which are astronomically expensive to build. This will demonstrate in five years a very innovative, small, not expensive opportunity to meet a public demand."

In winning legislative funding for ABLE last year, Keiser and the other ABLE proponents showed themselves well-schooled in the state's political process. They kept the same criteria as the older FRAG program -- except for the non-profit requirement. And Keiser College and the Keiser family are regular political donors -- giving approximately $42,000 to state legislators and the Democrat and Republican parties in the 2002 election cycle.

Keiser, along with South University in West Palm Beach, the 30-year-old local campus of a Savannah institution, and Art Institute/Miami International University of Art & Design, a unit of Pittsburgh-based EDMC Corp., are the first institutions whose students can receive aid under the ABLE program.

Those initial three are Florida-chartered institutions with the same regional accreditation as the University of Florida, Nova Southeastern University and other traditional schools. The three for-profits educate a total of 9,925 students in Florida. Dan Moore, South University's West Palm Beach president, says 130 of his students receive ABLE aid this year. South is growing at 15% per year and plans a Tampa campus.

Abare says he's more worried about what schools may be in the next wave of ABLE recipients. "The biggest objection is not who already is in the hopper as who potentially can be in the hopper," he says.

The Legislature mandated that ABLE next year take in regionally accredited non-profits that have had a campus here for 10 years, including those without Florida charters. Such schools include Johnson & Wales, with a 2,389-student campus in North Miami; Carlos Albizu, based in Puerto Rico and Middle States-accredited, with 1,100 students in Miami; and Troy University, an Alabama-based public university with 1,472 non-online students at eight Florida campuses, including military bases.

After next year, Keiser says the program could be expanded to take in out-of-state for-profits and eventually institutions with national, not regional, accreditation.

Keiser won't fight ABLE's expansion to include such schools, says Keiser lobbyist Mac Stipanovich. "We're not going to resist it," he says. "We don't want to be pigs."

Meanwhile, the Florida Independent College Alliance, whose members are accredited by groups other than the Southern Association and other regional associations, is pushing this legislative session for a third grant program. Eligibility for aid would be tied to workforce development needs, says alliance general counsel Bob Harris.

Students studying for occupations that the state has targeted as a need -- nurses, for example -- would be eligible for aid. Alliance member institutions number less than a dozen schools including for-profit Florida Metropolitan University, a unit of publicly held Santa Ana, Calif.-based Corinthian Colleges, and not-for-profit City College, with campuses in Miami, Fort Lauderdale and Gainesville.

While the Florida Independent College Alliance is small, the program it proposes could make aid available to as many as 100 more schools, Harris says. "This is our last remaining area of higher education institutions in the state that do not receive any funding," Harris says.

Yet another proposal, from Rep. Frank Attkisson, R-Kissimmee, would put all increased funding for enrollment growth into a trust fund pool. Schools would bid for the money based on the state's occupation needs in various regions of Florida.

Attkisson says the program would lead to more graduates in occupations the state needs -- at a lower cost. "Let them bid for it. Who can do it faster, quicker, cheaper? If the private school has capacity, then they're going to be able to come in and do the program a lot cheaper"
than having the state build new campuses or buildings.

Other Southern states take a variety of approaches to aid for students at for-profits and non-profits based out-of-state. Georgia and North Carolina provide aid to students at for-profits. Texas provides no direct aid to students at for-profits. Students at non-profit satellite campuses of institutions based outside of Texas can qualify for aid if the satellite meets state requirements on incorporation and other issues.

Gov. Jeb Bush hasn't proposed any funding for the alliance school students but has proposed increasing the ABLE grant program to $3.6 million for grants of $1,156 for each of a projected 3,115 students.

Keiser, based on its projection of the number of students in the second wave of ABLE schools, hopes the Legislature will fund $5.4 million so that each student still gets $1,500. Stipanovich says the funding per student still will be less than FRAG and support to students at state institutions. "A phenomenally cheap date," he calls ABLE. "We're not talking about cosmetology or dog grooming. We're talking about a four-year degree that's SACS-accredited just like the University of Florida."

Says Abare: "Most of the presidents are going to look at this as a resource decision. Can we afford another merit aid program?"