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2015 August 24 - 08:51 pm

Debt-Free College

Democrats Prodding States To Halt Decline in College Funding

 

AP PHOTO/JIM COLE

Democratic presidential candidate Hillary Rodham Clinton answers questions after announcing her college affordability plan at a high school in Exeter, N.H.

Democratic presidential candidate Sen. Bernie Sanders, I-Vt., has proposed a $70 billion plan that would eliminate tuition at public colleges and universities.

Over just a few short years, community colleges have ascended to a place that once seemed unimaginable for a sector once blithely dismissed as higher education’s unwanted stepchild.

The colleges have been cited as the linchpin of the country’s economic future. They are frequently singled out for praise by President Obama. They have attracted the attention and support of leading foundations and philanthropists.

But even as two-year colleges have basked in their newfound glory, it also has been afflicted by a paradoxical trend: disinvestment, the steady decline in public funding even as demands for accountability and better results grow ever louder. Colleges have been doing more and more with less and less.

The retreat in higher education funding has been most pronounced among the 50 states. According to a report by the Pew Charitable Trusts, state spending on higher education declined by 37 percent from 2000 to 2012, while federal spending increased by 32 percent, fueled primarily by spending on Pell grants.

In 2010, higher education funding passed a critical milestone when for the first time federal spending on higher education exceeded state spending. Though similar in size, the spending is different in nature: state spending goes primarily to institutions, while federal aid goes mostly to students.

Now, as students return to campuses around the country, politicians and policymakers — at least on the Democratic side — are addressing state disinvestment and its resulting impact on college costs.

For community colleges, it’s an issue whose time is long overdue. In a trends survey conducted by the League for Innovation in the Community College, college presidents said they are increasingly concerned about the dwindling financial support for their institutions.

“We have a crisis in higher education today. Too many of our young people cannot afford a college education and those who leave college are faced with crushing debt. It’s a national disgrace.”

AP PHOTO/JIM COLE

Democratic presidential candidate Hillary Rodham Clinton answers questions after announcing her college affordability plan at a high school in Exeter, N.H.

“Without question, one of the biggest concerns for presidents is the dramatic decline in public funding for community colleges,” the survey found.

Democratic presidential candidate Hillary Rodham Clinton brought the issue to the forefront with her $350 billion proposal to make college more affordable. The centerpiece of her plan is a $200 billion incentive system aimed at encouraging states to expand their investments in higher education and cut student costs. States that guarantee “no-loan” tuition at four-year public schools, and offer free tuition at community colleges, would be eligible to receive federal funds.

Clinton sees a decline in state government support as driving a surge in student debt. Her plan would use federal incentives to ensure state colleges charge tuition that students could afford without taking out loans. It would also allow students to refinance their student loans at lower interest rates and limit payments to a share of their income.

“We will make sure that costs won’t be a barrier,” she said at River Valley Community College in Claremont, N.H., where she unveiled her plan. “And we will make sure the federal government and states step up to help pay the cost, so the burden doesn’t fall on families alone.”

One of Clinton’s rivals for the Democratic presidential nomination, U.S. Sen. Bernie Sanders, I-Vermont, would go even further. He has proposed legislation that would eliminate tuition and fees for public universities. The $70 billion annual proposal would be funded by imposing a tax on transactions by hedge funds, investment houses and other Wall Street firms.

Sanders’ plan, like Clinton’s, is intended to prod states into investing in higher education. Under the legislation, the federal government would provide $47 billion in grants to states to eliminate undergraduate tuition and fees at public colleges and universities.

“This legislation will establish a partnership with states by developing a matching grant program which would provide $2 in federal funding for every dollar that states spend in making tuition-free,” Sanders said in announcing his plan.

“We have a crisis in higher education today. Too many of our young people cannot afford a college education and those who are leaving college are faced with crushing debt. It is a national disgrace that hundreds of thousands of young Americans do not go to college, not because they are unqualified, but because they can’t afford it. This is absolutely counter-productive to our efforts to create a strong, competitive economy and a vibrant middle class.”

Neither Democratic plan is expected to attract much support from a Congress controlled by Republicans who have given scant attention to the issue of student debt and college costs. At the first GOP presidential debate, the issues did not come up at all.

But for Democrats, college affordability and student debt have emerged as major issues with broad appeal across demographic and income lines. National student debt is near $1.3 trillion and the average price for in-state students at public four-year universities is 42 percent higher than it was a decade ago, according to the College Board.

“There’s something wrong when students and their families have to go deeply into debt to be able to get the education and skills they need in order to make the best of their own lives,” Clinton told students at Kirkland Community College in Monticel lo, Iowa, in April, shortly after announcing her candidacy, according to the Associated Press.

Policy analysts have reached a consensus on what is behind the climbing tuition and skyrocketing student debt: the retreat in state support of colleges, which has shifted more of the burden for paying for a college education to students and their families.

According to an analysis by the Institute for College Access & Success, “States are critical players in keeping college affordable, but they also have been complicit in the rise of tuition and student loan debt by letting higher education get squeezed out of state budgets. The decline in per-student state funding for higher education has been well-documented, as has the resulting impact on public college costs. Without federal intervention, higher education funding is likely to keep getting squeezed out to the detriment of students, families and our economy.”

A May 2015 report by the Center on Budget and Policy Priorities asserts that several years of state budget cuts to higher education is putting college out of reach of increasing numbers of students. Higher education funding increased in some states last year, but overall has yet to return to the levels seen before the Great Recession.

“Even as states restore some funding that was cut in recent years, their support for higher education remains well below prerecession levels, straining college affordability ― especially for students whose families struggle to make ends meet,” the report says. “Many public two- and fouryear colleges and universities avoided significant tuition increases for the second year in a row, as most states continued to replenish higher education support.” Still, 13 states further cut funding in the past year. And in almost all states, higher education support remains below what it was in 2008, at the onset of the Great Recession.

“These cuts led to steep tuition increases that threaten to put college out of reach for more students. They also raise concerns about diminishing the quality of education at a time when a highly educated workforce is more crucial than ever to the nation’s economic future.”

High levels of student debt have cascading effects throughout the economy. About 70 percent of all college graduates have some debt. Their debt prevents them from buying cars or putting a down payment on a house; first-time home buyers are purchasing a smaller share of homes than any time since the 1980s.

In addition, rising tuition is threatening to widen the already yawning gap between the college enrollment rates of lowerincome and higher-come students. In 2012, just over half of recent high school graduates from families in the bottom income quintile enrolled in some form of postsecondary education, as opposed to 82 percent of students from the highest income quintile, the CBPP report said.

The report concludes that state policy makers will have difficult choices to make in coming years.

States have cut higher education funding deeply since the start of the recession. These cuts were in part the result of a revenue collapse caused by the economic downturn, but they also resulted from misguided policy choices. State policymakers relied overwhelmingly on spending cuts to make up for lost revenues. They could have lessened the need for higher education funding cuts if they had used a more balanced mix of spending cuts and revenue increases to balance their budgets.

“The impact of the funding cuts has been dramatic. Public colleges have both steeply increased tuition and pared back spending, often in ways that may compromise the quality of education and jeopardize student outcomes. Students are paying more through increased tuition and by taking on greater levels of debt. Now is the time to renew investment in higher education to promote college affordability and quality.”

The Associated Press continuted to this report.


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