The document summarizes a review of North Carolina's NC REACH post-secondary education program for foster youth. It finds that while the program has increased college enrollment for foster youth, there is insufficient data to determine whether program support services like mentoring and tutoring are effective. It recommends a formal program evaluation be conducted to evaluate the program's structure, outcomes, and efficiency in meeting its goals.

1. Fiscal Research Division
Justification Review
Executive Summary
Health and Human Services
May 25, 2012
Optimizing the Program Efficiency of NC REACH is Critical to its Success
In fall 2011, the Fiscal Research Division conducted
a justification review of the NC REACH post-
secondary education program. Although the program
has been in existence for only four years, the
program is meeting its objective to increase access
to post-secondary education for foster youth. The
number of foster youth attending college has
increased and students are progressing in their
studies. However, whether the program is
accomplishing its objectives efficiently cannot be
determined from the available data. Additionally
data suggest that the program support services may
be inadequate and potentially ineffective at meeting
the needs of the students. Relying on a virtual
(internet based) support program for this population
of students is unsupported by the available research.
The following recommendations are offered:
1. NC REACH should be subjected to a formal
program evaluation which should inform the
future structure and content of the program.
2. The Division of Social Services should examine
whether program shortcomings can be corrected
by incorporating lessons from other states’
programs.
3. Program size should be examined to determine
if it is possible to achieve better outcomes
through more targeted service delivery.
4. The Division should determine if the case
management function is achieving the best
outcomes for the students being served.
5. The General Assembly should examine the
effectiveness of the Tuition Waiver for Foster
Youth (G.S. 115B).
Scope and Methodology
The findings of this review are based on
information obtained through a variety of sources
and data collection methods. Interviews were
conducted with numerous key stakeholders
including agency representatives from the
Division of Social Services, university program
administrators, the contract agency, and student
scholarship recipients. Staff conducted a rigorous
review of relevant fiscal data, program outcomes
data, and reports produced by the contractor and
the Division of Social Services. In addition, staff
interviewed student interns who are program
participants.
This review of the NC REACH Program is one of
four “justification reviews” of State government
programs required by S.L. 2011-145, Sec. 6.6.
The Fiscal Research Division’s (FRD) objectives
for each justification
review are to:
 Provide a description of each program;
 Identify major policy issues that the
General Assembly should address;
 Explore means to achieve program
objectives more efficiently;
 Characterize the likely results of
alternative funding levels and
opportunities to save taxpayer dollars; and
 Identify performance measures that have
been established by the agency and the
usefulness of those measures as well as the
agency’s progress toward meeting their
established measures.

2. Justification Review 2 May 25, 2012
Background and Mission
The NC REACH program is administered by the
NC Department of Health and Human Services’
Division of Social Services. NC REACH was
established by the General Assembly in 2007
(S.L. 2007-323 section 10.34) as a postsecondary
support program targeting the educational needs
of foster youth and special needs children adopted
after age twelve. The program was intended to
increase post-secondary education opportunities
for foster youth aging out of the foster care
system and special needs children adopted from
foster care after age 12. Specifically, the
provision stipulated that the intent of the program
is to provide assistance with the "cost of
attendance" as that term is defined in Federal Law
(at North Carolina community colleges or four-
year public institutions).1
“Cost of attendance” is
defined in the US Code to include: tuition and
fees; required materials or supplies, an allowance
for books; transportation; miscellaneous personal
expenses; and room and board costs. The
program is intended to be a secondary source of
funding to supplement the other financial aid
sources for which a student is eligible (e.g.,
Federal Pell Grant, Scholarships, and other federal
grants).
History and Purpose of the program
Because of the low numbers of foster youth
attending college, the program’s intent is to
address the challenges faced by foster youth in
obtaining a college education. In North Carolina,
an average of 766 foster youth and special needs
adoptees age out of the system each year.2
This
population has historically graduated high school
at lower rates, attended and graduated college at
lower rates, and is more likely to be dependent on
social programs in adulthood.3
Goals & Objectives of NC REACH
Program Structure & Design
The NC Division of Social Services oversees NC
REACH. Since inception, the Division has
contracted with the Orphan Foundation of
America (OFA) to develop and administer the
program and to provide case management services
for program participants. The Orphan Foundation
of America is a 30 year old nonprofit organization
headquartered in Sterling, Virginia. OFA serves
as contract administrator for foster youth
education programs in several states including
North Carolina’s federally funded foster youth
education fund - Education Training Voucher
Program (ETV). The organization performs a
range of functions for the NC REACH program as
outlined in their contract. The principal functions
of the organization center on two core areas –
support services and financial aid coordination.
Support services include: academic tutoring,
mentoring, case management, and emergency
financial assistance. Case management services
are provided by two staff members tasked with
monitoring student progress and linking students
with needed services. OFA provides mentoring
and tutoring services through a network of
volunteers who assist students virtually (via
computers and telephone contact). In coordinating
financial aid, OFA works with the student to
identify the sources of funding available in an
effort to maximize the student’s financial aid
package. The organization then works with the
NC State Education Assistance Authority to
disburse funds to students through their post-
secondary institutions.
The State Education Assistance Authority
(SEAA) receives an annual payment of $50,000
per year to act as a financial agent for the program
and works with OFA to disburse funds to the
universities. The SEAA established under G.S.
116‑201, serves as a political subdivision of the
State charged with developing and administering
educational loan programs and other associated
education functions.

3. Justification Review 3 May 25, 2012
Youth who are eligible for NC REACH are
identified through an application process that is
administered by the Division of Social services.
The basic criteria for a youth to receive funding
are:
 Special needs children adopted from North
Carolina DSS foster care after age 12; or
aged out of NC foster care at age 18 (must
have been in NC DSS foster care on 18th
birthday.).
 They are legal residents of North Carolina
eligible for in-state tuition rates.
 They are enrolled in one of the 74 North
Carolina public colleges, universities, or
community colleges.
 They have not yet reached age 26
(students remain eligible until their 26th
birthday).
NC REACH Eligibility
Table 1
Source: Orphan Foundation & NC DSS
Program Performance
For fiscal year 2010-11, the program served 24%
(184 out of 762) of eligible foster youth state wide
and a similar percentage in the two prior years of
the program’s existence (see Table 1). Since its
inception, the program has served a total of 650
students. Despite reductions in program funding
for the 2009-10 fiscal year, the program
accommodated a 17% increase in the number if
students served over the prior year. Program size
has remained consistent since the 2009-10 year.
The average per semester funding amount (per
student) for the 2010 fiscal year was $1,117.52.4
Table 2 shows program participation broken down
by year. It also shows the retention rate for each
group of students beginning with the first group of
54 students who were funded through NC
REACH. Their retention rate is displayed for
each successive year of program participation.
Examining the statistics on retention shows that
just over 40% of students return for their second
year of studies. It is instructive to look only at
Student Groups 2 and 3 because the program
began after Group 1 was already enrolled in
school. Program personnel suggest that because
they were primarily students who were already
enrolled in college they may not be comparable to
other student groups. The retention rates of
Cohort 2 and Cohort 3 are lower than the
retention rate for all students at North Carolina
community colleges (average 50%).5
Table 2
Year 1
07-08
Year 2
08-09
Year 3
09-10
Year 4
10-11
Student
Group 1
54 45 30 17
Retention % - 90% 83% 100%
Student
Group 2
- 217 92 50
Retention % - - 45% 63%
Student
Group 3
- - 195 79
Retention % - - - 42%
Student
Group 4
- - - 184
Retention % - - - -
Graduates 0 8 22 25
Total funded
per year:
54 262 317 330
Source: Orphan Foundation of America
However, this is to be expected given the
challenges faced by this population. Moreover,
these statistics include all students regardless of
enrollment status, whereas, the NC Community
College System only reports retention data for
degree seeking students and not transitional,
Fiscal Year
ELIGIBLE
YOUTH
NEW
STUDENTS
RETURNING
STUDENTS TOTAL
2007-2008 738 54 - 54
2008-2009 777 267 45 312
2009-2010 822 195 122 317
2010-2011 762 184 146 330

4. Justification Review 4 May 25, 2012
vocational, or certificate seeking students. For
the four years of the program’s existence, the
students have maintained an overall 2.6 Grade
Point Average.6
Additionally, the course
completion rate is high. Data reports indicate that
for the year academic year 2010-2011, students
completed 90% of the course hours attempted.7
Regarding student support activities, a total of
26,244 hours were logged by volunteers providing
virtual mentoring and tutoring. Case managers
averaged 2 hours of face to face contact with each
student per semester (total of 2,038 hours).8
Table 3
APPROPRIATIONS
FY2007-08 FY2008-09 FY2009-10 FY2010-11 FY2011-12 FY2012-13
STUDENT
FUNDING*
$3,168,250 $3,168,250 $3,168,250 $1,584,125 $1,584,125 $1,584,125
ORPHAN
FOUNDATION
$400,000 $500,000 $500,000 $339,493 $339,493 $339,493
NC SEAA $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
YEARLY TOTAL $3,618,250 $3,668,250 $3,668,250 $1,973,618 $1,973,618 $1,973,618
Source: NC Division of Social Services
*Student funding is a combination of Escheat Funds and General Fund Appropriations
Program Funding
Table 3 shows the program funding by year.
Initial appropriations totaled $5,221,850. This
funding was comprised of a combination of
Escheat Funds and General Fund appropriations.
However, in the 2010 session, General Fund
appropriations were suspended making available
up to $3.1 million in Escheat Funds. The program
experienced a reduction in FY 2010-11 of
$160,507 (R) & $1,584,125 (NR). In addition,
funding for contractual case management services
was reduced commensurate with actual FY 2009-
10 obligations (S.L. 2010-31, sec. 10.18). For
this past fiscal year, a total of $1,584,125 was
available to support scholarships.
The program has graduated a total of 25 students
since its inception. However, examining
graduation rates provides very little insight
because of the program’s short four year
existence. According to data from the “Beginning
Postsecondary Students Longitudinal Study”, less
than 30% of students pursuing 2-year community
college associate degrees graduate in three years.9
Although the overwhelming majority of NC
REACH students are attending community
colleges, 31% are attending 4-year universities.
For university students, nationally slightly more
than 57% of full-time students graduate with 4-
year Bachelor’s degrees in six years.10
Therefore,
at this time no conclusions can be drawn
regarding the program’s ability to graduate
students.
Other Related Programs
In addition to NC REACH funding, students are
eligible for the federally funded Chafee Education
Training Voucher (ETV). This program is state-
administered and is similarly designed to aid
foster youth in pursuit of higher education. Under
this federal program, students are eligible to
receive up to $5,000 a year for qualified school
related expenses. However, because of funding
limitations, funding is available on a first-come,
first-served basis. Since the 2008-09 school year,
an average of 69% of students received both
Chafee ETV and NC REACH funding.11
Students Receiving Both ETV & NC REACH
2008-2009 School Year: 187 (71%)
2009-2010 School Year: 215 (68%)
2010-2011 School Year: 220 (66%)
2011-2012 School Year: 235 (72%)

5. Justification Review 5 May 25, 2012
Programs in Other States
North Carolina’s program is somewhat unique in
that it allows the student to draw up to his or her
full cost of attendance. The total cost of
attendance includes tuition and fees, books,
supplies, personal expenses, and room and board.
Whereas, in the few other states with similar
programs, funding is capped at a specific yearly
amount or capped at the amount of tuition and
fees. Examining NC REACH alongside other
sources of funding shows that on average, NC
REACH funding comprised 34% of total funding
with the remaining 66% coming from other
sources (Pell Grants, scholarships, and other
grants).12
Findings
The main objective of the review was to assess
how effectively the NC REACH program met its
program’s performance measures and objectives.
In this case, the criteria are the program’s ability
to increase student college enrollment, to retain
students in college, and to graduate these students.
Finding 1: NC REACH has successfully increased
the number of foster youth attending post-
secondary institutions.
Nationally, fewer than 10% of foster youth who
graduate from high school enroll in college.13
Between 2008 and 2011, the NC REACH
program provided funding for 27% of the total
2,361 youth who were eligible statewide. Thus,
the program seems to have done well in
increasing student attendance. While it is
impossible to determine the number of students
who would have attended college anyway, it is
reasonable to surmise that the program provided
an extra incentive for significant numbers of
foster youth. Interviews with student participants
indicate that the NC REACH program was a
deciding factor in determining if college
attendance would be possible.
Finding 2: There is no empirical support for the
contracted program support components.
There is insufficient information available to
determine the overall effectiveness of the separate
program components. That is, are the support
elements contributing to student success at all? Of
the data that is available, it has not been subjected
to rigorous analysis to determine the program’s
effect on student retention and performance. It is
worth noting that the relative short existence of
the program makes it difficult (but not
impossible) to conduct extensive data analysis.
The NC Division of Social Services has
successfully integrated the NC REACH program
with other programs serving foster youth. In
addition to NC REACH, former foster youth are
served by several programs which are primarily
federally funded. NC REACH students who age
out of care are eligible for medical insurance
coverage through the Medicaid Foster Care
Expansion enacted in 2007. The state also
operates the NC LINKS program which provides
community based activities and life skills training
in an effort to successfully transition foster youth
into adulthood.
The structure of the NC REACH program allows
for a maximum draw down of all other sources of
funding prior to accessing state funding. Thus,
the program has been able to stretch the available
state funds while serving the maximum number of
eligible students. However, the data is unclear
regarding program’s administrative efficiency.
The current expenditure per student for the
contract agency functions is approximately
$1,021. The central question that needs to be
answered is: Is the program producing its
outcomes with a minimum expense or
unnecessary effort? Due to the lack of a rigorous
evaluation, we do not know if the specific
program components that are designed to produce
outcomes are actually effective.

6. Justification Review 6 May 25, 2012
Finding 3: The provision of virtual based service
delivery is unsupported by the available research.
The program’s performance in terms of
graduation rates seems to be on par with the
federally funded Chafee ETV program (in other
states). However, in reality North Carolina’s
program should be performing better given the
higher level of funding per student and the use of
support services. That is, increased financial and
other support should translate into improved
educational outcomes. The Orphan Foundation is
providing support services consistent with the
contract. However, it is questionable whether the
design of the support services is based on sound
research. While internet based support services
are gaining popularity, as yet we do not have a
sufficient research basis to validate their value. 14
Moreover, because of the educational challenges
faced by foster youth, this method may be
inadvisable. It is worth noting that students have
access to on-campus resources. But what is not
known is whether this virtual program component
is supplemental and beneficial, or if program
funding could be expended in a more prudent
manner.
Finding 4: The program is functioning with a case
management ratio that is high relative to similar
programs.
In addition, the structure of the support services is
questionable. Currently the program is designed
around a case management model of service
delivery. The program is being managed with a
ratio of 1:160 (one case manager for approximately
one hundred sixty students). There are two case
managers available for the 300+ students in the
program. Admittedly, students have very different
levels of need; however, such a high number of
students relative to a few case managers may lead to
ineffective service deliver. This ratio is on the high
end of what is recommended for effective case
management delivery in child welfare.15
Finding 5: The tuition waiver has been
ineffective in assisting foster youth college
attendance.
The state has at its disposal a funding mechanism
designed to deal specifically with the recruitment
of foster youth to college. General Statute 115B-2
established the foster youth tuition waiver for
foster youth (and other categories of citizens).
The statute permits tuition to be waived for: any
foster child under age 23; who is a resident of the
State; and is eligible for services under the
Chaffee Education and Training Vouchers
Program. However, the statute stipulates that the
waiver is only applicable to the extent that there is
any tuition still payable after receipt of other
financial aid received by the student. Despite
the fact that over 300 foster youth participate in
the NC REACH program, very few foster youth
receive the tuition waiver. In academic year
2008-09, universities reported 10 students in the
UNC system met the criteria for the waiver (2 at
ASU, 7 at FSU, and 1 at UNCC) at a total cost of
$19,824.16
No community college reported using
this waiver for the years examined. Because the
waiver is designed to be a last resort funding
option, students at community colleges
undoubtedly meet their financial need (which is
lower than university costs) through other
sources. Nonetheless, because the majority of NC
REACH students attend community colleges, it is
questionable whether the waiver is serving its
intended purpose.
Recommendations
Recommendation 1: Program size should be
examined to determine if it’s possible to achieve
better outcomes through more targeted service
delivery.
The state should examine whether youth would be
better served with a lower number of students
served relative to having increased case
management and enhanced support services. This
would require an examination of selection criteria
to determine if better retention rates can be

7. Justification Review 7 May 25, 2012
obtained by establishing criteria that better
identifies students who are likely to persist in a
post-secondary setting. Attention must be paid to
the fact that this population of students possesses
higher deficits and challenges. Fifty percent of
foster youth experience developmental delays (4
times the range in the general population).17
However, it may be advisable to design a program
that addresses those needs effectively rather than
a scatter shot approach that serves all who apply
regardless of likelihood to persist.
Recommendation 2: NC REACH should be
subjected to a formal program evaluation
The capability exists for extensive assessment of
program components and their relative
effectiveness on student outcomes. The current
contract agency maintains a database on every
student, his/her performance, and the inputs
[support services] received by that student.
However, to date, there has been no attempt to
determine if the program inputs can be directly
linked to student outcomes [through statistical
analysis]. Currently, there are funds in the
contract for evaluation services. Rather than using
these funds for a satisfaction survey, these funds
could be used to offset the costs of a formal
program evaluation. An evaluation of this type
would help determine the true effectiveness of the
contract components especially the virtual
mentoring and virtual tutors components. This
evaluation should be conducted as soon as is
feasible. Given the availability of existing data,
an evaluation could be completed in the course of
a few months.
Recommendation 3: The Division should examine
whether there are possible efficiencies to be
gained by learning from other states.
The Division of Social Services should conduct
research into post-secondary service delivery for
foster youth (and similar populations) to
determine if other structures can realize better
outcomes for the students served. Other states
have implemented post-secondary support
programs for foster youth. In these states, services
are typically provided through a campus based
model. Support services are delivered on-site by
case managers or campus personnel. In contrast,
the support services in the NC REACH program
are provided primarily virtually – through
telephone and email contact. While there is much
to recommend about the cost-effective delivery of
services through electronic means, there is little to
no research basis to support this virtual model of
service delivery of academic support and
mentoring for this population of youth.
Recommendation 4: The Division should
determine if the case management function is
achieving the best outcomes for the students being
served.
Caseloads should be examined to determine if 1
case manager to 160 youth is truly a manageable
case load. This ratio is at the high end of ratios
found in similar human services service delivery
settings. Nationally, the average caseload for a
foster care social worker is child welfare/foster
care caseworkers is 24–31 children.18
In reality,
case management services delivery to college
aged foster youth calls for a lower level of service
intensity. Nonetheless, it is worth determining if
a higher level of service provision is warranted.
The central question that arises is whether funds
can be realigned to make better use of monies in
service to the NC REACH students? It may be
advisable to examine the OFA contract to
determine the true performance value of the
contract. The Orphan Foundation already has a
contract to perform a similar student financial
determination service with respect to the federally
funded Chafee Education program. ($98,750 in
administrative costs). Because there is tremendous
overlap in the number of students eligible for both
Chafee and NC REACH, it is questionable
whether the state is making the best use of its
funds.

8. Justification Review 8 May 25, 2012
Recommendation 5: The General Assembly
should examine the effectiveness of the Tuition
Waiver for Foster Youth.
Currently, there exists a statute that provides to
foster youth a tuition waiver for any state
supported post-secondary institution (G.S. 115B-
2). Largely this waiver is ineffective because it is
structured to be a last resort and only applicable to
tuition. Since most students will qualify for a Pell
grant, Chafee ETV, and NC REACH, the waiver
is largely ineffective at community colleges. The
General Assembly may want to examine the need
for the tuition waiver given its limited use.
Fiscal Analysis
The major opportunities for cost savings can be
found in three categories. First, there is a potential
for cost savings through the restructuring of the
program to target a narrower population of youth.
Presently, the program serves all students based on
meeting the basic eligibility criteria outlined on
page 2. The underlying logic would be to better
identify those students more likely to persist in the
program and target funding accordingly. Thus the
state would achieve greater efficiency in its
expenditure of program funds.
Secondly, there is a possibility of achieving modest
savings through an assessment of the contractor
activities. Initially, the NC State Education
Assistance Authority was responsible for disbursing
$3.1 million. The current amount disbursed by the
agency is $1.9 million (for which it is paid
$50,000). Arguably, there may be a need to
decrease the payment amount commensurate with
the amount of funds disbursed. Additional savings
may be realized if it is found that the contractor
activities (Orphan Foundation, $339,493) are not
producing the intended outcomes, these funds can
be decreased or better targeted to services that are
known to provide proven benefits for the
population.
Lastly, decreasing overall program funding would
undoubtedly provide an immediate savings to the
state. However, all research points to the fact that
better preparation for foster youth leads to
decreased state and federal expenditures in the long
run. Foster youth are more likely to be dependent
upon state funded human services programs as
adults. A cost benefit analysis of a transition
services program for foster youth in California
calculated a net benefit of $3.1 for every $1 dollar
spent on foster youth aged 18 to 23.19
For additional information, please contact:
Donnie Charleston
Fiscal Research Division
NC General Assembly
300 N. Salisbury St., Room 619
Raleigh, North Carolina 27603-5925
(919) 733-4910
donnie.charleston@ncleg.net
1
US Federal Code 20 U.S.C. § 1087ll
2
2011 Data report submitted by NC Division of Social
Services.
3
Wolanin, T.R. 2005. Higher Education Opportunities for
Foster Youth: A Primer for Policymakers. Washington, DC:
Institute for Higher Education Policy.
4
2010 Data report submitted by Orphan Foundation of
America
5
NC Community College System. Critical Success Factors
2011.
6
2011 Data report submitted by Orphan Foundation of
America
7
Ibid
8
Ibid
9
2009 Beginning Postsecondary Students Longitudinal
Study. http://nces.ed.gov/surveys/bps/
10
National Center for Education Statistics. 2011. Digest of
Education Statistics 2010, Table 341.
11
2011 Data report submitted by NC Division of Social
Services
12
2011 Data report submitted by the Orphan Foundation of
America
13
Gerber, J. & Dicker, S. 2005. Children Adrift:
Addressing the Educational Needs of New York’s Foster
Children, 69 ALB. L. REV.
14
Miller, H., & Griffiths, M. 2005. E-mentoring. In D.L.
DuBois & M.J. Karcher (Eds.), Handbook of youth
mentoring. (pp. 300–313). Thousand Oaks, CA: Sage.
15
NC Division of Social Services Child Placement Services
Manual.
16
2010 FRD Survey of UNC System Institutions.

9. Justification Review 9 May 25, 2012
17
Dicker, S., 2002. Promoting the Emotional Well-Being of
Children and Families Policy Paper No. 2 Improving the
Odds for the Healthy Development of Young Children in
Foster Care.
18
United States General Accounting Office. Child Welfare
HHS Could Play a Greater Role in Helping Child Welfare
Agencies Recruit and Retain Staff. 2003
19
Packard, T. 2007. Cost Benefit Analysis Of The
Transition Guardian Plan. Children’s Advocacy Institute
University of San Diego.

10. Department of Health and Human
Services Response
The Fiscal Research Division solicited input from the
Department of Health and Human Services on a draft of this
Justification Review. The following document is the
Department’s response. It has not been altered or edited in any
way by the Fiscal Research Division.