A Brief History Of The Oregon Student Assistance Commission

1955 Legislative Session: Attempt to Create a State Grant and a Commission
State Senator Mark Hatfield authors a bill for a state scholarship program. Students at public and private colleges in Oregon would be eligible. A citizen board would administer the program. The bill fails.

1958: District & County Award Crisis
A citizen discovers a dormant student aid program in Oregon law. The 1885 statute lets state legislators and judges award free tuition at Oregon Agricultural College (now OSU) to one student apiece per year. The Attorney General rules the law must be honored. It is an interim year, between legislative sessions, and the law cannot be amended. There is no standard application process and no consensus on selection criteria, but applicants present themselves and legislators make what come to be called, "District and County Awards" (D&C). OSU admissions officers resent being forced to admit beneficiaries of political patronage. Presidents of other institutions object to a state program for the students of a single institution. Disappointed parents assail legislators because their children were not chosen. The public appears to want a student aid program, but no one likes the ad hoc process used to make the initial D&C Awards.

1959 Legislative Session: State Scholarship Commission Within OUS / Private Awards
Mark Hatfield, now Governor, engineers bipartisan support for a bill making it possible for D&C awardees to attend any accredited four-year college in Oregon, public or independent. The bill would also create the State Scholarship Commission to administer the program. The Commission would also take over existing tuition remission programs at OUS 4-year institutions. The bill passes without appropriations for awards to independent college students or for agency administrative expenses. An amendment to the bill permits the Commission to solicit and administer privately funded scholarships for the benefit of students at both public and independent institutions. As the Commission begins operation, its programs are tuition and fee remissions for OUS institutions-funded by the institutions themselves. Commissioners are members of the public appointed by the Governor. Part-time staff is provided by the Chancellor of the Oregon State System of Higher Education (now Oregon University System).

1961 Session: Cash Award Program / Budget for Administration
With Governor Hatfield's support, a modified version of the appropriation portion of the 1959 bill is introduced. Rather than extending the D&C program to students at independent colleges, the bill would create a "scholastic grant program." Awardees would be recent high school graduates chosen on the basis of academic excellence and financial need. Awardees could choose among all accredited colleges in Oregon. Awards would be in the form of cash grants-the State of Oregon, not the institutions, would subsidize these students. The bill also seeks an appropriation for agency administration. The bill passes and appropriations are made. The program is called Oregon Cash Award. The Commission is now an entity separate from the Chancellor's Office, though it continues to be housed on the University of Oregon Campus. The agency is staffed by an Executive Secretary whose funding and work assignments are shared between the Commission and the Chancellor's Office. The position is held initially by Guy Lutz and subsequently by David Johnson.

1965: Federal Guaranteed Student Loans
Congress creates the Guaranteed Student Loan Program (GSL). Initially, the State Board of Higher Education is responsible for this program in Oregon. The Board contracts with United Student Aid Funds, of Indianapolis, Indiana, for operation of the Oregon GSL Program.

1966: Jeff Lee hired as Executive Secretary of the Commission.
Appointment is .75 FTE Commission staff, .25 FTE OUS Chancellor's staff. Commission also receives .25 FTE of clerical support from the Chancellor's Office.

1967 Legislative Session: GSL to the Commission / Agency Moves Off-campus
At the urging of the Educational Coordinating Commission, Commission staff drafts legislation authorizing the Commission to take over Oregon GSL administration from the State Board of Higher Education. The measure passes. Through this program, the Commission may guarantee loans from Oregon lenders for resident students attending accredited postsecondary institutions in the USA, and major foreign institutions, as well. These loans are "reinsured" by the U.S. Department of Education. Commission staff is no longer shared with OUS Chancellor. The Commission moves from the Chancellor's Office at University of Oregon to separate offices in Eugene.

1969 Legislative Session: Non-public College Grant
The Legislature creates the Non-public College Grant Program to encourage independent colleges in Oregon to enroll Oregon resident undergraduates. The Commission is designated as the administrative agency.

1971 Legislative Session: Need Grant & PESIC
The Commission makes a major proposal to Governor and Legislature on restructuring its programs. The centerpiece is the Oregon Need Grant. Awards would be based entirely on financial need, and students could use awards at Oregon community colleges, as well as accredited four-year public and private institutions. As an alternative to community college participation in the Need Grant, a second proposal is drafted for a community college grant. Oregon Independent Colleges Association proposes increased funding and structural changes for the Non-public College Grant. The Need Grant, Community College Grant, and PESIC (the revised Non-public College Grant) all pass and receive appropriations. The Need Grant statute provides for awards up to half the student's calculated need, or $1,500, whichever is less, but a Ways and Means Committee budget note mandates a single award size of $500 for all students. The D&C program ends.

1973 Legislative Session: Community Colleges Added to Need Grant
The Commission proposes incorporating community college students in the Need Grant and discontinuing the Community College Grant. Legislature agrees. The budget note on award size disappears. The Commission makes awards that vary according to costs at the institution attended. Grants are equal to approximately 20% of student costs, but independent college costs are limited by a "tuition cap." The "tuition cap" is an amount equal to OUS tuition, plus the approximate state per-student instructional subsidy for OUS undergraduates.

1979 Legislative Session: OUS Tuition Off-set Grant
In response to sharp OUS tuition increases, the Legislature appropriates additional funds to the Need Grant and provides a budget note directing that the funds be used to insulate needy resident undergraduates at OUS institutions from the increased costs. This Tuition Off-set Grant (TOG) supplements Need Grants for OUS students from 1979 to 1983.

1982 Special Session: PESIC Reduced, Mandated Use of PESIC Revenue for Student Grants
Prior to the Special Session of the Legislature, five religiously oriented independent colleges withdraw from PESIC to end an ACLU lawsuit. Legislature reduces PESIC budget proportionally. OICA asks that use of PESIC by remaining institutions be limited to student aid for residents. Legislature complies with a budget note to that effect.

Federal Education Amendments in the 1980's: New Program Names / New Federal Loan Programs
In the 1980's many major federal student financial aid programs are renamed after members of Congress. The Basic Educational Opportunity Grant becomes Pell Grant, the National Direct Student Loan becomes Perkins Loan, and Guaranteed Student Loans become Stafford Loans. New loan programs are added to the GSL family administered by the Commission: PLUS Loans for parents of dependent students and SLS Loans for self-supporting students.

1987 Legislative Session: Need Grant Statutory Maximum / Rural Health Services Program
The statutory maximum for Need Grants has always been 50% of financial need, or $1,500, whichever is less. Actual awards have never been more than 20% of costs. As cost increases outpace funding increases, this erodes to 11% of costs in public colleges. Awards to students at some independent colleges are even less-the $1,500 limit forces truncation of awards at approximately 8% of need at the colleges with the highest tuition. The Commission proposes that the limit be raised to $2,500. The Legislature agrees, and the statute is amended accordingly. Authorizing legislation is passed for the Rural Health Services loan repayment program-an incentive program to encourage physicians and nurse practitioners to locate in rural areas in Oregon. The program does not receive funding.

1991 Legislative Session: Funding for Rural Health Services / Oregon Nursing Loan
The Rural Health Services loan repayment incentive Program created in 1987 receives its initial funding. The Legislature also creates-and funds-the Oregon Nursing Loan Program. This is a "forgivable" loan intended as an incentive for nurses to seek employment in critical shortage geographic areas and/or practice specialties.

Federal Education Amendments of 1992: Creation of Direct Loans
The Education Amendments of 1992 create a pilot project for an alternative way to operate federal student loan programs. Rather than insuring loans made by private lenders, the federal government will raise capital through bonds, send that capital to participating schools, and will assume all collection responsibilities. The formal name for the program is Federal Ford Direct Loan (DL), while the individual loans for students and parents are called Stafford Loan and PLUS Loan, mirroring the names of the existing programs. A new umbrella name is created for the existing programs: Federal Family Education Loan (FFELP). The Commission continues to administer FFELP Stafford and PLUS Loans (SLS Loans cease to exist).

1993 Clinton administration and DL Program: "Pedal To The Metal" For Direct Lending
In 1993, the Clinton administration scraps the "pilot" concept, and sets out to replace the FFELP with DL throughout the nation. Lenders and FFELP guarantee agencies mount fierce resistance; educational institutions choose sides, members of Congress choose sides. In Oregon, the majority of OUS institutions choose DL; Commission FFELP volume drops by more than half. By 1997 an uneasy truce has emerged, with 30% of national student/parent lending going through DL and 70% remaining in FFELP.

1993 Legislative Session: End of Cash Award, PESIC / Legislative Mandate on Distribution of Need Grant Funds
Faced with a Governor's mandate for a base budget with reduced General Fund expenditures, the Commission's budget request directs all available General Funds to maintaining the Need Grant at highest possible level-at the expense of all funding for Cash Award and PESIC. The potential effect on independent colleges is harsh, since PESIC funds go entirely to independent colleges, and a disproportionate (relative to total enrollment) number of Cash Awardees choose independent colleges. The Ways and Means Committee adds $2 million to agency base budget, and mandates segmental distribution of enlarged Need Grants in a manner which duplicates the prior segmental distribution of combined Need Grant, Cash Award, and PESIC disbursements. Need Grants for individual students at independent colleges increase dramatically to meet the Legislative mandate, though total agency disbursements to the independent segment decrease slightly. The $2,500 limit on an individual Need Grants is removed from the program statutes.

June of 1993:

• Long-time Commission Executive Director Jeff Lee retires.
• Doug Collins becomes Executive Director.

1995 Legislative Session: "Controlled 12%" Need Grant Policy / State Grant Supplemental Award for Independent Colleges
The Commission recommends to the Legislature that individual Need Grants be equal to approximately 12% of costs for students at all institutions-except for students at the most expensive independent colleges, whose awards would be truncated through the use of a formula related to state subsidies of undergraduate instruction in OUS institutions. The anticipated result would be a significant decrease in funding for students at Independent colleges. The Ways and Means Committee ultimately adds $3 million to the Commission's grant budget, and, through a budget note, directs that it be distributed to students in independent colleges as State Grant Supplement Awards (SGSA)-in addition to Need Grants determined through the Commission's recommended methodology.

1997 Legislative Session: Office of Degree Authorization
Over two legislative sessions, 1995 and 1997, what was once the Governor's Office of Educational Policy and Planning is dismantled. One branch of this agency, the Office of Degree Authorization, becomes part of the Commission. This office regulates degree offerings in Oregon by independent institutions, by out-of-state state institutions, and enforces state laws forbidding use of fraudulent academic degrees.

1998 Aspire Program created:
Access to Student assistance Programs in Reach of Everyone (ASPIRE) is developed as a collaborative project between OSAC and the Oregon Community Foundation. Stated goals are: provide mentoring and resources to help students access education and training beyond high school; help high schools build a sustainable community of volunteer mentors; educate students and families about the scholarship application process and other options for paying for postsecondary education.

Spring 1998:

• Doug Collins retires as Executive Director.
• Elwood (Woody) Farber becomes Executive Director.

1999 Legislative Session: Agency Name Change / House Bill 2993
Through action of the Legislature, the name of the agency is changed to Oregon Student Assistance Commission (OSAC). Through passage of House Bill 2993, the Need Grant is changed to Oregon Opportunity Grant, effective in 2001, and a merit-based program, Oregon Achievement Grant, is created. The latter program is to become operational in 2001-02-if the 2001 Legislature appropriates funding. HB 2993 also creates a 22-member special commission to study student financial aid issues in Oregon and make recommendations to the 2001 Legislature.

Summer 1999:

• Woody Farber leaves to become director of the student loan guarantee agency in New Mexico.
• Patricia Aldworth Becomes Executive Director.
• Governor Kitzhaber names Roger Bassett (retired Commissioner for Community Colleges) and Mark Dodson (Sr. V-P, NW Natural) co-chairs of the Special Commission on Financial Aid in Oregon.

Spring 2000: Jeff Svejcar becomes acting Executive Director of OSAC
Jeff Svejcar replaces Patricia Aldworth.

Fall 2000: Jeff Svejcar is named Executive Director of OSAC.

Fall 2000: Report of Special Commission on Financial Aid: Five Principles, Four Recommendations
The final report of the Special Commission on Financial Aid is presented to the House and Senate interim education committees. The report identifies five principles on which to base State of Oregon student financial aid policy:

Five Principles
1. Top priority for student aid should be to reduce the financial burden for lower-income students.
2. Oregon's commitment should be broad and sufficient to provide lower-cost tuition at public universities, provide need-based student assistance for students attending eligible institutions, and provide merit-based scholarships for students attending eligible institutions.
3. Public policies and programs should aim to increase the participation of students of color and lower-income students underrepresented in postsecondary institutions.
4. Public expenditures for any non-need-based scholarship programs should be made in addition to, and not result in the redistribution of, existing resources.
5. Financial assistance to students should not be detrimental to the existing support of public postsecondary institutions in Oregon.

In addition, the Special Commission made four specific recommendations to strengthen the Oregon Opportunity Grant, Oregon's principal need-based financial aid program:

Four Recommendations
A. Year-round availability - ensure need-based grants are available to eligible applicants who apply throughout the academic year.
B. Increase awards - increase the size of individual awards to students from an amount equal to 11% of annual student costs to an amount equal to 15% of annual student costs.
C. Equal treatment - equalize the eligibility threshold for students financially dependent on their parents and adult, self-supporting students.
D. Incent students - the State of Oregon should fund non-need-based scholarships to meet State priorities.

2001 Legislative Session:
The Oregon Legislature increases the Oregon Opportunity Grant by $5,000,000. Fund for the Oregon Opportunity Grant rises to $44,088,114. The Commission proposes merging Supplemental State Grant Award (SGSA) with the Opportunity Grant. Financial aid community and Legislature agree. All awards for 2001 set at 11% of cost, except those private colleges where combined awards already exceed 11%. For these schools, agreement reached to freeze their awards until their costs rise to bring their percentage to 11%.

The National Scholarship Providers Association (NSPA) names OSAC the 2001 Scholarship Provider of the Year at the NSPA National Conference. Sherrill Kirchhoff, Scholarship Program Manager, accepts the award for the agency. "OSAC was chosen because of its impressive integration of technology to increase student access and simplify the administration of its programs. OSAC's work in the community - participating in college fairs, financial aid nights, and partnering with organizations to recruit and train volunteers to help students apply for college - and tremendous growth are factors that led to OSAC's selection."

2002 Legislature holds 5 special sessions:
With Oregon's economy in serious decline, 5 special sessions are held and the Legislature sends two issues to the voters. With the passage of BM19 in September 2002 and HB 2536 in February, 2003, the Education Endowment (now Education Stability Fund) is drained of all funds by May, 2003.

Rising enrollments in the public sector, significant increases in college costs, explosive growth in resident undergraduates applying for aid, and decreased revenue from the Education Endowment Fund leads the Commission to vote to (1) freeze all award amounts, and (2) freeze income cutoffs with the exception of single independent students which are increased from 27% of median family income to 30%.

2003 Legislative Session:
The final budget adopted by the Legislature provided close to $12M in additional funding to the Oregon Opportunity Grant over the Governor's Balanced Budget. As a result, cutoff dates for all segments are extended beyond the traditional March 1st date.

Aspire receives donations which allow it to expand its program. Ford Family Foundation awards $85,000 grant for expansion of the Aspire program in rural Southern Oregon. AmeriCorps awards $166,370 to fund 13 full time positions throughout the state. GEAR UP awards $59,500 to increase high school participation.

OSAC enters into a partnership with the Oregon Department of Human Services (DHS) to assist in administering the Chafee Education & Training Grant. The Chafee Grant is for Oregonians who are currently in foster care or have previously been in foster care with DHS or one of the nine federally recognized Tribes in Oregon. Eligible recipients can receive up to $5,000 to attend any school or training institution with a minimum one-year program completion requirement.

2004 OSAC exits the Federal Family Education Loan Program:

• Jeff Svejcar steps down as Executive Director
• Shelley Turner temporarily returns from retirement to be appointed interim Executive Director

OSAC, in cooperation with the office of Governor Kulongoski, forms a loan program workgroup. The Futures Workgroup is charged with determining the best course of action for the agency's student loan program and how that course would impact the remaining agency programs. The workgroup concludes that the student loan program as it is currently operated is not financially viable but that the agency should remain independent because it is uniquely qualified to administer the Oregon Opportunity Grant, Aspire, and Scholarship Services. The workgroup further recommends additional funding be directed to expanding these remaining programs. The Commission votes to support the conclusions of the workgroup.

The agency presents the Workgroups' conclusion to the Emergency Board and is directed to exit the loan program. The agency issues a Request for Proposal in November to seek a guarantor to accept the student loan portfolio. Nine guarantee agencies are present at the mandatory Proposers meeting; however, no agency submits a bid for the student loan portfolio. In response, the US Department of Education directs the agency to cease operations as a guarantee agency effective December 31, 2004, and to assign the entire student loan portfolio to the Educational Credit Management Corporation (ECMC).

2005 Legislative Session

• Shelley Turner steps down as Interim Executive Director
• Margie Lowe accepts a one-year job rotation from her position at the Department of Human Servcies to become the newest Interim Executive Director

Transfer of the student loan portfolio occurs in January. On January 31, 2005, all agency positions associated with the student loan program are abolished. All but 4 employees are successfully placed in other state or private sector positions. The agency is reduced to a staff of 25 employees with the remaining functions of Grants & Scholarships, Aspire, Administration, and the Office of Degree Authorization.

OSAC initiates an Early Bird Scholarship program encouraging students to apply sooner than the traditional March 1 deadline. The intent is to enable OSAC to begin processing applications sooner and distribute information to selection committees more expeditiously. Early applications increase over 1,300 from the previous year. Contributions from The Oregon Community Foundation, The Ford Family Foundation, the Educational Credit Management Corporation, Friends of Oregon Students, and individual donors allow OSAC to award 16 Early Bird scholarships of $500 each with recipients chosen at random.