The University of New Hampshire needs scholarship money in order to make higher education accessible to all qualified New Hampshire students.

Among the students who graduated from the University in 1998, 81% had received loans to pay for some portion of higher education costs, loans that must be repaid by the students and/or their families. Loans have become an increasingly large component in financial aid packages at UNH. The average loan indebtedness for our 1998 graduates was $18,000, and that loan obligation appears to grow each year. The predictions are that the freshmen who entered last autumn will have average loan indebtedness at the time of their graduation of approximately $21,000. One effect of the obligation to repay large loans after graduation is that students frequently choose not to go on to graduate or professional school. A second consequence is that students are hard pressed to pursue careers in teaching, social work, nursing, and other lower paying areas because salaries in those fields make it difficult to repay large loans.

Currently, the University must use substantial tuition income to provide financial aid to worthy students. This tuition discount, which last year was approximately 23%, means that the tuition of some students pays the financial aid of other students, a practice rightly viewed as unfair by some and as poor educational policy by most. Even with this level of assignment of tuition dollars to financial aid, UNH is not presenting financial aid packages that are competitive with our peers. UNH's packages are substantially heavier in student loans than those from institutions in states which have state scholarship programs and/or large university endowments.

Business and industry in New Hampshire need more college graduates.

New Hampshire is building its economy on knowledge-intensive industries. Our state ranks number one out of all 50 states in the percentage of the work force employed in high technology industries. Further, New Hampshire has an unusually high concentration of employment in skilled professions. For example, New Hampshire's concentration in line and middle-management positions is 44% higher than the average of other states in the nation: 45% higher in first line supervisors; 31% higher in other managerial and administrative occupations; 26% higher in engineers; 12% higher in supervisors in service occupations; 10% higher in health practitioners. Such high concentrations in skilled areas and in technology industries means that a 12th grade education will not be sufficient for the work force in New Hampshire. Fewer than 20% of native New Hampshire residents now in the State's work force have baccalaureate degrees or higher. As a consequence, New Hampshire businesses and industries must import the educated work force that is required, a very costly requirement for these companies and a practice that is not sustainable.

It has become critically important to the State's future that New Hampshire provide high-quality postsecondary education to its own young people. Approximately 50% of the high school graduates in New Hampshire now go out of state for their college education. It is not uncommon for high ability New Hampshire graduates to explain to our Admissions staff that they choose to go to out-of-state institutions because the financial aid offered there makes the total cost for them less than the cost at UNH. Because we must assume that the tradition of high tuition at UNH will continue, it is essential that we find ways to improve the financial aid for New Hampshire residents whose families cannot afford this tuition.

There are unusual opportunities at this time for private fund-raising leveraged by public funds.

The University of New Hampshire, through its Foundation, is shaping a major financial campaign which will be announced next October. We expect the campaign to have a target of $100 million. Of this amount, approximately $30 million will be raised to provide for student scholarship support. Scholarship money is often the most difficult money for universities to raise from private sources because such gifts do not give the visibility to a donor that gifts of new buildings and named professorships provide. Nonetheless, there is substantial evidence from the experience of other states that when a state provides a match to private gifts, both the number of gifts and their size is greatly increased. There is an opportunity for New Hampshire to use its limited funds to encourage private giving in a way that guarantees access to public higher education in the State for large numbers of New Hampshire residents and to put this scholarship aid in place in perpetuity.

The University particularly supports the State's use of a differentiated match, with smaller gifts receiving less state money percentagewise and large gifts earning a "one-one" match of State dollars. We believe that this method will be effective in encouraging larger gifts.

The future depends on our ability to establish endowments for student scholastic support.

If through the combination of state monies and private gifts we are able to add $50 million to the current scholarship endowment which is $19.5 million, the University will receive an annual payout of $3.13 million each year. The University will continue to build scholarship endowment on top of this base. These funds will go a long way toward making it possible for qualified New Hampshire residents to gain a university education independent of the financial circumstances of their families.