States balk at higher-ed mandate

The House has cleared a bill that forces states to stabilize taxpayer funding for public colleges.

from the March 10, 2008 edition

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Both the NGA and the National Conference of State Legislatures have said the measure could backfire. "In good times, states are not going to have those 10 or 12 percent increases, because they're going to be held to that higher level the next time there's an economic downturn," Mr. Scheppach says.

The compromise bill – an overdue reauthorization of the Higher Education Act of 1965 – is unlikely to emerge until after Congress returns from an upcoming recess.

Fiscal year 2007 saw a 7.7 percent increase in state and local funding for higher education, outpacing both inflation and enrollment growth, according to a report by State Higher Education Executive Officers. But it couldn't counteract past declines in state support: Per student, appropriations are "lower in constant-dollar terms compared to most years since 1980," the report notes.

Amid the prospect of a recession, a number of states may cut appropriations in their next budget, which frustrates education leaders. In Kentucky, university leaders have warned that the governor's proposed 12 percent cut would slow or reverse progress that's been made to boost the quality of education and the number of graduates, and would force tuition increases.

The Association of State Colleges and Universities sees the federal maintenance-of-effort rule as "a rather modest proposal to ensure that states contribute to access to higher education," says Dan Hurley, the group's director of state relations and policy analysis. He acknowledges that, as some critics point out, public institutions can do more to rein in costs. But he adds that too much of the blame has been placed on colleges, and more responsibility needs to shift back to state officials who set budgets and tuition rates.

The value of the provision would mainly be symbolic, because the money the federal government could withhold is too small to sway states determined to cut their budgets, Mr. Hurley says. The bill would withhold a state's share of $35 million for low-income students distributed through federal Grants for Access and Persistence. The secretary of Education could give waivers to states that experience disaster or severe financial constraints.

Ironically, in the 1990s higher education made such powerful arguments about the benefit of higher lifetime earnings tied to a college degree that lawmakers felt justified in putting more of the burden on students through tuition, Hodel says. But now public opinion may be shifting back toward recognition of the public benefits of a better-educated workforce.

If Congress decides to use the stick of a maintenance-of-effort rule, states now may find it more politically tenable to spread cuts more evenly among sectors. "College has become so expensive for the typical American family that something has got to change," Hodel says.

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