Students paying bigger share of public college costs

By Adrienne Lu

Stateline.org (MCT)

Published: Monday, May 19 2014 12:00 a.m. MDT

“Every time we come out of a recession, we have a new level of tuition,” Pernsteiner said. “It sets a new baseline because states have all these other obligations they have to pay that 25 years ago were not as acute.” Areas such as corrections, pension plans and health care costs have risen across the country, swallowing larger chunks of state revenues over time.

Andy Carlson, a senior policy analyst at SHEEO, noted that states also try not to cut in areas of the budget where they receive federal matching funds. “If you have to cut a dollar from higher ed or a dollar from Medicaid or social services with a federal match, you’re going to make a cut from higher ed,” Carlson said.

Bob King, president of the Kentucky Council on Postsecondary Education, said, “It’s a complex problem, in the sense that there are some fundamental issues that states have to wrestle with and the choices that they make in terms of how to spend the resources that they have.”

He added: “This is not sustainable in an era when more and more students from lower-income families need to attend and graduate from college.”

While all of the blame for rising tuition does not fall on the states, much of it does, said Donna Desrochers, principal researcher at the Delta Cost Project at the American Institutes for Research, which studies how colleges spend their money. “College spending hasn’t been going up nearly as fast as tuition.”

Many states are trying to offset climbing tuition prices by increasing financial aid. From fiscal 2008 to 2013, states increased financial aid at public institutions from $5 billion to $6.4 billion, or 28 percent, according to SHEEO. Fifteen states cut financial aid over the same period.

Sandy Baum, an expert on college pricing and student aid at George Washington University, called increasing financial aid a very reasonable approach.

“A lot of students who go to public universities, and particularly to the public flagship universities, do come from affluent families and can afford to pay,” Baum said. “There are strong arguments for targeting subsidies on people who need it. On the other hand, it’s a balance question — it doesn’t mean it’s fine to double your tuition every year.”

While it’s too early for definitive nationwide numbers for the upcoming fiscal year, anecdotal reports from individual states indicate higher education funding will continue to rebound from recessionary lows, said Dustin Weeden, a policy specialist with the National Conference on State Legislatures.

Colorado will increase funding for higher education for the fiscal year that begins July 1 by $100 million, including $60 million for the universities, representing an 11 percent increase, and $40 million for financial aid. Along with the increased funding, the newly adopted College Affordability Act limits most tuition increases to 6 percent for resident undergraduate students. According to one recent study, Colorado ranked 49th in the country for state funding per student in 2011-12.

“While this does not solve the long-term financial outlook for higher education in Colorado, it does represent a step in the right direction and helps keep higher education within reach for more Colorado students,” said Lt. Gov. Joseph Garcia, who is also executive director of the state Department of Higher Education. “By ensuring students have both access and support today, we produce an educated workforce for a thriving economy tomorrow.”

In Iowa, the state legislature in April approved a funding increase for the state’s public universities, in exchange for the universities agreeing to freeze tuition for the second consecutive year, which hasn’t happened in 35 years, according to the office of Republican Gov. Terry Branstad. The governor has said a tuition freeze is a top priority, although he has not yet signed the bill.

In 2011, Indiana adopted a new statutory requirement that requires the state Commission for Higher Education to set nonbinding targets for tuition for public institutions. From fiscal 2013 to fiscal 2014 Indiana increased state funding for higher education from $1.7 billion to $1.9 billion, or 15 percent, including an additional $44 million for financial aid.

Indiana’s public institutions are trying to help students afford college in many ways. Some examples of the state schools’ efforts:

Purdue University has frozen tuition.

Indiana University has frozen tuition for students who are on target to graduate on time.

Indiana State University has promised to help students graduate within four years or be able to take remaining courses for free.

Some other institutions now offer discounted tuition for classes taken over the summer.

But every state may not increase funding to higher education next year. NCSL’s Weeden said that while he has not heard of any states cutting funding to higher education in the next budget cycle, some states, including Indiana, Kentucky, Oklahoma, Tennessee and West Virginia, expect to have lower than forecasted revenues, which could lead to cuts in areas including higher education.

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