STATE BOARD OF EDUCATION – TOPIC SUMMARY

Topic: GED Fee Increase

Date: April 17, 2009

Staff/Office: Camille Preus, Commissioner, David Moore, Literacy and Skill Development Director, CCWD

Action Requested: Information only Policy Adoption Policy Adoption/Consent Calendar

ISSUE BEFORE THE BOARD: The state administration fee for the General Educational Development (GED) tests has not increased since January of 2001. Revenues based on the current fee will not support the state administration of the GED program beyond fiscal year 2009. CCWD recommends a fee increase for the full battery of GED tests from $25 to $35, effective July 1, 2009.

BACKGROUND: Approximately 10,000 Oregonians complete a GED each year in Oregon. The GED credential is the most widely accepted and respected high school equivalency credential in the U.S., enabling individuals to secure and maintain employment and to enter post-secondary education institutions.

OAR 589-007-0500, GED Fees, establishes that all persons taking the General Education Development (GED) tests shall be required to pay a $25 state fee at the time they begin testing. GED test takers have three years to complete the five tests that comprise the GED before the fee is reassessed.

This $25 fee, which supports the state administration of the GED program in Oregon, became effective January 1, 2001 and has not increased since that time. However, costs associated with administering the GED program have increased considerably. These costs include the purchase of secure test materials from the GED Testing Service, staff costs that support the program, and indirect costs.

As a result of increased costs associated with the administration of the GED program in the next biennium, on June, 30 2009 the GED program is projected to have a small positive ending balance of $31,000; however, by June, 30 2011, a deficit of $113,00 is projected. The State GED program and office are funded entirely by the state fee.

To remedy the projected deficit mentioned above, CCWD has considered two options:

1.  Reducing the length of time GED test takers have to complete their tests, which is currently 3 years, before they must pay an additional state fee. However, research conducted by CCWD indicates that nearly 91% of test takers complete the GED within 12 months. Thus, the amount of additional revenue that would be realized from reducing the timeframe for completion of the GED tests would be negligible.

2.  Raising the state fee; if the state fee were increased to $35, the positive ending balance in 2011 is projected to be $114,000. Thus, the increase will provide the State office sufficient revenue to operate the GED program.

Therefore, CCWD is proposing the fee increase of $10 to ensure the fiscal viability of the GED program for at least the next four years.

Key Factors Related To Analysis:

·  State fees were first put in OAR in 1977 ($5) and have been increased in 1984 ($10), 1991 ($15), and most recently in 2001 ($25).

·  Although the number of test takers has increased slightly over the last three years (2006 = 9,821; 2007 = 10,166; 2008 = 10,908), the additional revenue associated with these modest increases in test takers will not keep pace with the costs associated with administering the program.

·  Many GED programs in other states are funded by test fees and/or general funds.