Press Release

College Affordability’s Enemy — State Disinvestment

Publication date: Mar 26, 2013

Diminished state budgets, eroded by the most recent recession, have walloped the finances of public colleges and universities, which educate more than 70 percent of the nation’s undergraduate students. Consequences range from rising tuition and student loan debt to furloughed faculty and closed campuses that curtail class offerings and deflate completion rates.

Two new reports, one from the Center on Budget and Policy Priorities (CBPP) and the other from the association of State Higher Education Executive Officers (SHEEO), warn that the decline of state investment in public higher education will make it increasingly harder for students to access and complete higher education, threatening the future competitiveness of the American workforce and the country’s economic promise.

To cope with severely restricted budgetary resources, “public colleges and universities across the country have increased tuition to help make up for declining state investment in higher education,” according to CBPP’s report. States currently spend 28 percent less per postsecondary student than in 2008, after adjusting for inflation, and average annual tuition at four-year public colleges has risen accordingly. In some states, tuition has increased by more than 50 percent, and Arizona and California institutions have imposed tuitions more than 70 percent higher than in 2007-08. Imagine how the family of a rising college senior feels in those states. With more than two-thirds of parents feeling driven by cost to limit their kids’ college choices, the high cost of college has become a systemic problem with broad implications for families, state economies, and beyond.

The practice of balancing depressed state budgets on the backs of students and their families is a recurring phenomenon. Prompted in part by the growing need for postsecondary education that accompanies any economic downturn, enrollment demands rise rapidly during economic recession just when state revenue is compromised. According to SHEEO, “This tendency exacerbates the effects of a parallel tendency for higher education funding to become the ‘balance wheel’ for state finance, declining faster than the rest of the state budget [during] recessions ….” And although higher education funding tends to rebound when state revenue recovers, this is a tenuous bet as the 2013 “national total for state higher education appropriations is still down 0.2 percent.”

As years of damaging state-level higher education budget cuts continue to squeeze families’ pockets and imperil state institutions’ ability to offer high-quality education at a good value proposition, a pattern is emerging: Under what SHEEO calls the “new normal,” limited restoration of public funding for higher education more permanently shifts the costs of postsecondary education to families. Ultimately, however, the real cost is paid by a society that fails to shore up its public education system to develop the workforce of the future at a price that students and families can reasonably afford. Read Ed Trust’s plan to fix the problem.

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