A compromise on the contentious issue of making the University of Pikeville a public school is being worked out behind the scenes of this year's General Assembly.
The potential plan would use coal severance tax money that had been envisioned for UPike to fund a new financial aid program for aspiring students from coal-producing counties, Western Kentucky University President Gary Ransdell said Wednesday.
All eight public university presidents were scheduled for a conference call with Robert King, president of the Council on Postsecondary Education, on Wednesday afternoon to discuss the matter.
"There is discussion about using coal severance money to create a loan forgiveness program/financial aid program," Ransdell said. "If a student gets one of these loans, locates or relocates to the region, then that loan would be forgiven."
Rep. Carl Rollins, chairman of the House Education Committee, said that he had seen three versions of the compromise — two from the Council on Postsecondary Education — and that he thought a final version might be ready for a vote when his committee meets Tuesday.
"It depends which version we can agree on," said Rollins, D-Midway. "We're still working on it."
Rollins said he didn't see how anyone could oppose the compromise, even county judge-executives who are worried about losing coal severance tax money now used for economic development.
"This is certainly much better economic development than some of the uses the coal severance money has been put to," Rollins said. "Education is economic development."
The compromise is being crafted because of growing opposition to House Bill 260, the bill to make UPike the state's ninth public institution at a time when the other eight are facing 6 percent budget cuts.
Rep. Leslie Combs, who is co-sponsoring the bill with House Speaker Greg Stumbo, said she wasn't sure the original bill could make it out of committee or the House.
"I'm not absolutely confident in the numbers," said Combs, D-Pikeville. "I think we're right there on the edge."
Combs said she would keep pushing to make UPike a public school after the legislative session ends if necessary, but she was not opposed to a compromise that focuses on more people from coal-producing counties getting bachelor's degrees.
"We are now talking about the important issue," she said.
The question is whether the compromise would allow students to attend school anywhere, then return home for loan forgiveness, or whether they would have to go to schools in coal counties.
Combs and UPike President Paul Patton, a former governor, said this week that they would want any compromise to require students to attend college in coal-producing counties.
Outside of community colleges, that effectively would limit the choice to a handful of private schools, including UPike, Alice Lloyd College in Pippa Passes, Union College in Barbourville and University of the Cumberlands in Williamsburg.
"You have to have the opportunity to go to school in a coal county and it has to be affordable, comparable with a state institution," Patton said.
There is precedent for using tax money to help students attend private schools. Every year, the state gives about $25 million for the Kentucky Tuition Grant program, which gives need-based scholarships to students going to private Kentucky schools.
Patton also said any compromise would diminish an important goal of the legislation — to bring the region's college attainment to the state average. Right now, the region's average for people with bachelor's degree is about 11 percent; the state average is 17 percent.
"It would be the main focus of the University of Pikeville," Patton said. "No other school has that kind of goal."
HB 260 has plenty of opponents, including the Morehead State University Board of Regents.
Rep. Rocky Adkins, the House majority floor leader and a Morehead alumnus, sent a series of telephone messages urging graduates to oppose the measure. And several county judge-executives who receive money from the coal severance fund have opposed the idea publicly.
Most state university presidents have stayed out of the fray but are working behind the scenes against the bill.
Ransdell said the compromise, as he understood it, seemed reasonable. In addition, it would address his and other presidents' concerns about bringing another school into a financially strapped system.
"It appears to get at the stated problem of an insufficient number of students who go to college and live and go to work in that region," Ransdell said. "I'm most interested in addressing the need and finding a good solution that serves that region well and doesn't hurt the General Fund. We've got huge challenges with the current eight institutions, but I'm encouraged by this line of thought."
Stumbo and King, of the Council on Postsecondary Education, declined to comment on the matter.
As originally proposed, HB 260 calls for $7 million of coal tax money in the first year and $14 million in the second, most of which would be used to lower tuition at UPike from about $17,000 a year to $7,000.
UPike is run on a $27 million annual budget, according to financial documents the school provided to the Herald-Leader.
It has an $18 million endowment and recently received a federal loan for bonds to build a $25 million building for the osteopathic medicine school. It is emerging from the economic crisis in 2008, which reduced its endowment by $1 million.
A study by a national consultant on the feasibility of making UPike a public school is due March 15.
Linda Blackford: (859) 231-1359. Twitter: @lbblackford