What do state funding boosts mean for higher ed?
According to a recent report from the American Association of State Colleges and Universities, state higher ed funding, which saw a 5.7% increase for fiscal 2014, will increase another 3.6% for 2015.
Of course, some states are still cutting funding. Of 49 states that have passed budgets, six — Alaska, Delaware, Kentucky, Missouri, Washington, and West Virginia — cut their support for higher education by less than 3%. Still, year-to-year funding variations were lower than in the previous three fiscal years and there's continued hope that support will return to (and hopefully exceed) pre-recession levels. A number of policy issues in play could help push that boost even more.
1. States cite higher ed in their economic goals
The rising cost of higher education has been a focal point of debate for some time now, especially when it comes to skyrocketing student loan debt — now well over $1 trillion and cited by Forbes as crippling the economy. It's no secret that a major contributor to rising tuition and loan debt has been the scaling back of state funding to higher ed. As states recognize that a highly skilled workforce (particularly in STEM fields) is key to their economic viability, higher education is taking a higher priority in state lawmakers' pitches to the public — from both the pen and the podium.
Among the states where tuition-free models (widely involving community colleges) have been passed, proposed, or explored are Tennessee, Oregon, Mississippi, and Louisiana. Even if a student doesn't intend on finishing his or her degree at a community college, a few years of free tuition at one makes a four-year degree that much more affordable upon transferring to a four-year school. Colorado legislation passed this year also allows the state's community colleges to grant four-year degrees in technical fields, while California is considering a similar measure.
Additionally, STEM scholarships and programs, like an incentive program initiated by New York Gov. Andrew Cuomo, offer free or reduced tuition with various conditions. In New York, for instance, students in the top 10% of their high school class who major in a science, technology, engineering, or math field pay no tuition to attend the state's public colleges and universities — as long as they also work in New York for five years after graduating.
2. Funding increases are tied to tuition freezes
"That's great," you may be saying, "but what about addressing the sky-high tuition?"
Obviously, it does no good for states to raise funding to address affordability if the price tag continues to climb, so several of the funding increases have been coupled with tuition freezes. The university systems of Texas, Wisconsin, and Massachusetts, along with California's public universities, and those in Iowa and South Dakota, are expected to freeze their tuition for at least the next academic year. State leaders in Colorado, meanwhile, lowered the maximum tuition increase from 9% to 6% after pumping $100 million in funding to higher ed. New Hampshire is also considering a freeze of its own.
If funding continues to increase — and we admit we're at least a little skeptical — could these freezes eventually become reductions?
3. A number of models and initiatives could reshape higher ed finance
A key determinant of whether the higher levels of funding remain the same, or continue to rise, may be proposed performance-based models.
This brings us back to the aforementioned state economic goals. A report from the National Conference of State Legislature cited by AASCU reports that, in March, 25 of 50 states had performance-based funding systems on the books for two- or four-year institutions. Among them: Colorado, Missouri, Iowa, and Ohio.
Essentially, these are meant to further align institutions with state priorities. For example, progress toward Tennessee Gov. Bill Haslam's "Drive to 55" agenda, which aims for 55% of Tennessee residents to have college degrees by 2025, could theoretically be tied to higher ed funding in the state. Setting a specific deadline for reaching a certain percentage of college grads isn't exclusive to Tennessee — Hawai'i even has the same percentage and year for its own goals. (And this isn't even taking into consideration President Barack Obama's proposed rating system, which could also be tied to funding.)
Of course, funding also impacts financial aid, and, let's face it, the majority of students never really pay the full sticker price of tuition thanks to the abundance of aid available. The increased affordability of flat tuition rates amid funding increases could see more stringent eligibility requirements as available funds cover a bigger slice of the bill. Or, if funding reaches that fantasy level where tuition prices are lowered, available financial aid could be scaled back to reflect that shift. As the AASCU reports, Florida has already seen tougher eligibility standards enacted in its Bright Futures program to control costs, while Illinois Gov. Pat Quinn is pushing for doubled funding in the state's Monetary Award Program grant. Furthermore, AASCU's paper states that Delaware and Pennsylvania are putting forward new scholarship ideas, and Georgia is allowing high achievers at technical colleges to attend school for free.
Not all financial aid is created equally, though. "Pay It Forward" financing programs introduced by legislators in over 20 states in the last 18 months are riddled with issues, according to another AASCU policy brief released this month. Pay It Forward essentially has public college and university students pay back a portion of their income for a period of time after graduation instead of paying for tuition and fees upfront. The AASCU finds that while PIF models overcome factors like financial barriers and high student loan debt, it doesn't do it well enough and could also increase tuition, financing inefficiencies, and administrative burdens.
Of course, the outcome of November's elections could impact all of the above when it comes to state higher ed funding and related measures, as well. Thirty-six states are electing new governors, and 17 legislative chambers — 11 Democrat-controlled and six Republican — could see party control change.
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