SALT LAKE CITY — Washington state lawmakers have passed an act waiving tuition at two- or four-year public colleges for students whose families make $50,000 or less per year, according to the Seattle Times. Students from families that make up to the median income — nearly $92,000 — will also receive aid.
The Workforce Education Investment Act, which will provide for nearly 110,000 students, will go into effect in 2020. It would raise almost $1 billion over a four-year period through added surcharges to businesses who use highly skilled workers, such as computer science, engineering and accounting.
Washington joins 20 states that offer some form of tuition-free higher education, according to CNBC. While some experts, such as former Missouri State University president Michael T. Nietzel, are lauding Washington lawmakers for the plan, calling it “a standard for making college affordable that other states should carefully consider,” it also might not be the magic bullet for every state.
Here are some points to consider:
1. Funding is based on a controversial tax.
Funding for Washington’s legislation comes from a business and occupation (B&O) tax levied only in Washington, West Virginia and Ohio, that varies based on the way states classify businesses.
Washington state business owners cite frustration with the tax because it has been “amended, tweaked and updated to include hundreds of exemptions, exceptions and classifications,” says Seattle news editor Chris Grygiel in Seattle Business Magazine.
Although most classifications result in a tax of less than 1 percent, Grygiel continues, “businesses get taxed whether they make money or lose money, which critics of the levy say is especially hard on startups and small firms.”
“Even in those years you’re not making a profit, the government gets paid before the owner of the business,” Steve Neighbors, chairman of Terra Staffing Group in Bellevue, Washington, told Seattle Business Magazine.
2. Amazon and Microsoft will contribute a healthy chunk of the funding and both are excited about the plan.
Tech mammoths Microsoft and Amazon, will “contribute between 2 percent and 3.6 percent of the total $380 million in revenue the tax increase will raise over the first two years,” said Katherine Long.
Microsoft president Brad Smith said in a joint op-ed in the Seattle Times that because his company relies heavily on highly educated workers, he supports paying “a bit more” through this act.
Amazon also agreed, stating: “We have a long history of supporting local education. We have welcomed the constructive dialogue on (the act) and are supportive of the outcome that delivers increased funding for higher education in Washington State.”
In Washington State, service industry businesses, including tech firms, are taxed most heavily. Other states, however, have different tax structures and don’t have firms like Microsoft and Amazon, making Washington's plan unique to that state.
3. Students can use their aid flexibly.
The act allows students to use the money they receive for various certificate programs or apprenticeships as well as part-time attendance. This no-strings approach, or “the fine print” as Nathan Daun-Barnett, University at Buffalo professor of educational leadership and policy, called it in a university news release, helps students participate in and complete the programs they start.
“Several financial aid programs are designed to encourage students to enter particular fields or encourage on-time completion,” Daun-Barnett said. “In exchange, students are obligated to certain conditions. … If you do not meet (the requirements), you lose eligibility.”
Daun-Barnett also said that often, a failure to meet the stipulations surrounding some funding agreements means a grant becomes a loan that requires repayment.
4. The plan will require changing existing higher-ed programs to meet student demand.
In a Seattle Times op-ed piece, the presidents of Microsoft and the University of Washington, and the vice chairman of the Washington State Board for Community and Technical Colleges write that Washington will need to change its higher ed opportunities in order to facilitate this new approach to funding students:
“Many of today’s students and tomorrow’s workforce will benefit by pursuing career pathways that take them through community and technical college or apprenticeships," they write. "Let’s expand capacity at our public community and technical colleges and our four-year colleges and universities … because we lack room in our programs in critical high-demand fields like nursing, engineering and computer science.”30 comments on this story
The act sets aside $300 million over two years for public universities and colleges to “make targeted investments to boost high-demand fields … and (provide) ‘foundational support’ to recession-proof the states colleges and universities,” according to the Seattle Times.
Washington’s course of action speaks to higher ed’s overall need for reinvention, as Babson College president-elect Stephen Spinelli, Jr. writes in the Boston Globe:
“The educational experience is no longer linear. It is not limited to a four-year experience with a defined beginning and end. Rather, students seek a long-term, ongoing relationship with education, one with many connection points over the course of their lives.”