The Funding Fight at State Schools

Tug

Due to the economy, states have less money coming in through taxes. Because many obligations (e.g. state pensions) are actually required by statute, states are saving money by reducing payments to public higher education. The colleges themselves respond by increasing tuition to cover the gap. This is a a problem in states all across the union.

This puts the legislature and the colleges in a sort of tug-of-war, though probably the wrong tug-of-war. According to an Associated Press article by Deanna Martin in the Indianapolis Star:

There’s a simple math lesson that supporters of Indiana’s public universities want state lawmakers to learn: If they continue to reduce state funding for higher education, colleges will keep raising tuition and fees.

But Republican fiscal leaders at the Statehouse are trying to teach college leaders another lesson — one that might have to be learned the hard way: If universities keep raising tuition past the recommended levels, state lawmakers can step in.

Well yes, sort of. They can’t step in or hold schools accountable in a terribly direct way, by, say, forcing the colleges to actually reduce cost. They can, however, be really annoying.

[Indiana Republican State Senator Luke] Kenley, the head budget writer in the Senate, has threatened action before. In 2009, he held university construction projects hostage because of unhappiness over tuition increases. He relented when colleges took action. IU created a program for students to receive discounts if they get good grades, and Purdue agreed to increase financial aid.

Note that this “program for students to receive discounts if they get good grades” doesn’t actually address the fundamental problem, that colleges are forced to operate with less public money and are thus billing students to cover costs. But that compromise seemed to be good enough.

This is the problem with the fight in Indiana: the fight is about the right issues but the solutions are all wrong. Indiana tries to punish colleges for jacking up tuition, they back down when colleges create some scholarship programs.

Colleges, similarly, seem to be unable to force the legislature to actually appropriate more money so they wouldn’t have to raise tuition.

Everyone expresses concern that colleges are getting too expensive but the state won’t appropriate more money and the colleges say they can’t cut costs. And students just pay more and more.

According to the article, in 1970 students paid about a third of the total cost of public education; they’re paying about half today.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer