Budget Cuts and Higher Education

Jennifer Wheary
January 30, 2012

College administrators spent the weekend "on notice" after President Obama called them out for being complicit and complacent in escalating tuition costs in both his State of the Union address and his visit to the University of Michigan last Friday.

Obama's "on notice" line has gotten a lot of press. As a piece of oratory, it is quite smart. Media audiences love get-tough antagonism, and the inherent "Fix this or else!" ultimatum sounds convincing.  Here's the problem with it though. The more the "on notice" ultimatum gets repeated, the more it morphs into finger pointing rather than collective responsibility, and the more we misunderstand the college tuition crisis and what solutions can actually address it.

With tuition rates rising more than 400 percent over the last 25 years, there is no shortage of well-placed critiques about whether parents and students are getting the best value for their money and whether schools are taking advantage of consumers. As Andrew Hacker and Claudia Dreifuss have written:

Colleges are taking on too many roles and doing none of them well. They are staffed by casts of thousands and dedicated to everything from esoteric research to vocational training—and have lost track of their basic mission to challenge the minds of young people. Higher education has become a colossus—a $420-billion industry—immune from scrutiny and in need of reform.

We need to ask tough questions about how colleges manage themselves. But we also must ask where the priorities of state and federal lawmakers lie -- a point that Obama raised in his recent Michigan speech, to his credit.

The great majority of college students go to public universities -- institutions which have raised costs partly in response to budgets cuts to higher education.

In Michigan, for instance, where Obama launched his latest "on notice" barb, public four-year universities receive most (90 percent) of their general funds from the combination of student tuition and fees and state appropriations. Tuition has gone up at these universities as state appropriations for higher ed have gone down. Between 2000 and 2009, per-student state appropriations declined by 17 percent. At the same time non-inflation adjusted tuition revenue per student grew by 91 percent (from $6,367 to $12,148).  (See Demos' report on Building Michigan's Middle Class.) As Michigan's public universities have been pinched by legislators, they have turned to students to make up the difference.

While college presidents may be artificially inflating costs in some cases, there is a mismatch between what many lawmakers say and the support they give colleges when push comes to shove. Yet each group that makes a decision that affects college costs (ultimately driving them higher) feels they are doing what is logical and necessary. Such is the passed buck of austerity budgeting.  

If we can back away from Obama's singular "on notice" comment, we do have the opportunity to examine the full bulk of what he is saying.  It is not just the purview of individual college presidents or even any one group of state or federal legislators to address higher education costs, it is the responsibility of everyone involved and affected by higher education access. This means making smart, creative, and courageous choices, at all levels.

This article was originally published on Policy Shop, Demos' web blog. It is reprinted here with permission.



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