By Richard Read, The Oregonian

Portland State University plans to reduce a controversial tuition increase and help more students complete degrees using strong higher-education funding authorized by the Legislature statewide this week.

Lawmakers boosted funding Monday for all seven Oregon public universities to $700 million for the 2015-15 biennium. Under the package signed by Gov. Kate Brown, Oregon’s 17 community colleges will get the full $550 million they had requested. The universities came close, having asked for $755 million.

The new post-secondary budget is the largest single biennial reinvestment in Oregon’s public colleges and universities in at least two decades, according to the Higher Education Coordinating Commission. The increase is about 22 percent, almost double the growth in Oregon’s overall state budget.

“I want to thank the Legislature for recognizing the need to invest in the success of our students,” PSU President Wim Wiewel said in a prepared statement. “Many thought the dissolution of the chancellor’s office would lead to the universities fighting with each other. In fact, we’re collaborating better than ever, resulting in increased funding.”

Higher-education administrators are celebrating across Oregon, because the increased allocations partially restore funding to pre-recession amounts. They say they will be able to boost retention and graduation rates as financial aid also increases.

Technically, the increases don’t fully restore schools’ pre-recession budgets. Costs have climbed and four-year universities have enrolled 20,000 more students. State funding for the seven public universities had plunged by 38 percent since 2007, adjusted for inflation. During the same period, enrollment at the universities rose 23 percent, increasing tuition revenue but also costs for the schools.

The budget cuts dropped Oregon to No. 47 nationally for state support of post-secondary education. During the next legislative session, Wiewel and the other university presidents plan to push for the additional $55 million needed to reach 2007-09 funding levels.

Andrea Henderson, Oregon Community College Association executive director, is pleased with the $550 million.

But Henderson said that it would have taken $660 million to stay on track for Oregon’s so-called 40-40-20 goal. By 2025, this goal aims for 40 percent of Oregonians to have a baccalaureate degree or higher; for 40 percent to have an associate’s degree or certificate in a skilled occupation; and for the remaining 20 percent to have at least a high school diploma or its equivalent.

Yet Hans Bernard, University of Oregon associate vice president for state and community affairs, said officials in Eugene and around the state welcome the appropriations.

“It’s clear that the Legislature and the governor made students a priority,” Bernard said. “This was a remarkable first step in reinvesting in higher education. All of the campuses are ready to deploy these dollars in ways that have a direct benefit for students.”

Di Saunders, an Oregon Institute of Technology spokeswoman, said universities can start rebuilding an administrative support network to increase retention and boost graduation rates.

“To hold the faculty harmless,” Saunders said, “what got cut was the administrative side. Those are the support services that are really the things that keep students on those campuses.”

For example, Saunders said, paid peer-to-peer networks can now be reestablished, so students can intervene when classmates consider dropping out. More counselors and faculty members can be mobilized to keep university students on track to graduate in four years.

“Sometimes it’s having another person in the financial-aid office to help,” said Saunders, regarding retention. “It’s having the counselors in what they call the student-life area.”

Other examples on OIT’s Wilsonville and Klamath Falls campuses, Saunders said, are clubs — guided by paid advisers – that bring together students with common interests or backgrounds. Clubs range from a 3-D printing club to groups for Latinos and for students from Hawaii.

“It helps students feel, ‘I can stay here, and I do belong here,'” she said..

Saunders used to work for the Oregon University System, speaking for the chancellor of higher education, who administered the state’s seven public universities. Last year legislators and former Gov. John Kitzhaber scrapped that system and disbanded the powerful State Board of Higher Education.

Under the new system, each university has its own board of trustees. A state commission coordinates higher education policy and distributes funds allocated by the Legislature. Therefore the Higher Education Coordinating Committee — known as HECC, as in “heck” – will soon get busy divvying up the increased dollars.

Ben Cannon, a former Kitzhaber education advisor, serves as HECC’s executive director. He called the Legislature’s increased post-secondary funding significant.

“Higher ed is seeing a much more robust increase in its funding than many other areas of the state budget,” Cannon said. “These are 20- to 30-percent increases in financial aid, universities and colleges at a time when the state budget is increasing overall — but not nearly at that rate.”

The Legislature appropriates lump sums for universities, community colleges and financial aid. In the past, Cannon said, two or three boards decided how to spread the dollars among institutions. Now the HECC does it all.

Although final figures aren’t in for the most recent semester, the HECC is starting to apply its formulas to divide up the post-secondary pie.

“We’ve significantly modified those formulas for the universities,” Cannon said, “and have work underway to modify it for the college side.”

Each university gets a base amount for fixed costs. Commissioners divide the remainder according to universities’ current enrollments and “outcomes,” such as retention and graduation rates. During the next four or five years, the HECC plans to move from primarily enrollment-based allocations to mainly outcome-based appropriations.

Community colleges remain on the old enrollment-based model, But they’ll begin shifting to outcome-based funding in fiscal 2017.

The Legislature passed at least 21 bills requiring the HECC to take certain actions. These range from launching a pilot program to offer some students free community-college tuition, as proposed by President Barack Obama on the federal level, to boosting on-line course material.

PSU will wait to see what it gets from the HECC before deciding how much to lower its planned increase in tuition and fees for Oregon undergraduates.

Students angrily protested the increase as PSU trustees met to vote on it March 12. Noisy demonstrators disrupted and halted the meeting, which was held in the school’s library during finals week. But board members voted to raise undergraduate tuition for a full-time student from $7,794 to $8,124 for the upcoming academic year, a 4.23 percent bump.

In addition to lowering the tuition increase, PSU President Wiewel plans to spend his university’s portion of an extra $30 million earmarked for “student success” to hire more advisors and faculty, and to invest in other student support services. Wiewel is away traveling in Vietnam to recruit students and to strengthen ties with Vietnamese universities.

PSU will use $60 million in state bonds approved by the Legislature to renovate heavily used Neuberger Hall, a 1960s-era building stuffed with classrooms, labs, faculty offices and student services such as admissions, financial aid and registration.

The Neuberger refurbishment is one of 11 new construction and renovation projects at public universities to be financed by $299 million in bonds. The higher-ed budget more than doubles spending on capital repair and renewal, from $30 million during the 2013-15 biennium to more than $65 million in the 2015-17 biennium.

Legislators also increased funding by 24 percent for the Oregon Opportunity Grant, the state’s need-based grant program that makes college more affordable for the state’s poorest students. The $141 million program will serve about 16,000 additional students