Colorado lawmakers have approved a first-of-its-kind college voucher plan that has more to do with helping the state's universities deal with money problems than helping students pay for their education.
Nonetheless, voucher systems, familiar and controversial for securing funding at the K-12 level, have never been tried at the college and university level anywhere in the country. Colorado's program, which starts in fall 2005, will be worth $2,400 at public schools and $1,200 at three private schools in the state.
The bill has been both criticized for drawing desperately needed funds away from public universities and lauded as an important incentive for families in a state that ranks among the lowest nationwide for sending high school seniors to college. With the national recession leaving higher education systems hard hit in many states, Colorado's latest attempt to bridge revenue shortfalls is being closely watched.
Many states have "very similar budget problems with higher education and many are slashing [the] higher ed budget because it is discretionary," said Christine Walton, education policy associate for the National Conference of State Legislatures. "States are looking for other ways to fund higher education, and they are going to look at every option."
Colorado already pays about one-third the cost of college for state residents, a bill that will total $592.4 million for 2004-05. The funds go directly to schools based on enrollment.
But under the voucher program - dubbed the College Opportunity Scholarship - the state will divvy up funds among high school students instead of schools, handing recent grads a check that can be put toward tuition at any junior college, state college, or four-year university in the state. Students may also use half of the voucher at one of three private schools: the University of Denver, Regis University, or Colorado College.
Some say this kind of accounting shift makes the voucher program misleading. "I'm concerned some of the students believe it is a $2,400 reduction in their bill," said Pam Shockley-Zalabak, chancellor of the University of Colorado in Colorado Springs, who supports the voucher. "In fact, the tuition they pay will be the same. It doesn't make college less expensive; it is just a different funding mechanism."
Others, however, hope the perception of new money will make a dent in one of the state's more shameful statistics: In 2002, only 17 percent of low-income high school grads transitioned to college.
The voucher program will create a "psychological dynamic," said Rick O'Donnell, executive director of the Colorado Commission on Higher Education, by putting money for college directly into the hands of those who need it.
"I think, long-term, we are going to see a big increase in low-income kids going to college," Mr. O'Donnell said. "Students and their families are going to benefit."
Information about the voucher will be mailed to eighth graders and high school juniors. High school counselors are already thinking about how to include the program in their go-to-college pitch.
But even if more students are impelled to continue their studies, the cycle of budget cuts and tuition increases isn't likely to go away. Lawmakers cut spending for colleges and universities $85 million in 2003, or 12 percent. Schools made up for the cuts with tuition increases between 10 percent and 15 percent.
Colorado's constitutional spending caps - the toughest in the nation - coupled with increasing costs and demands in other budget areas are hampering government's ability to recover.
Higher education funding - one of the biggest line items in the budget - is one of the few places lawmakers can cut to free up extra cash.
If the trend continues at its current pace, however, the number of state dollars available for higher education will dwindle to $83 million in 2009 and completely disappear in 2010, according to projections from the University of Colorado, the state's largest public university system with campuses in Boulder, Denver, and Colorado Springs.
"The state must fundamentally alter the way it funds higher education or run the risk of driving its research universities toward mediocrity," said Larry Penley, president of Colorado State University in Fort Collins. "Our research institutions must be permitted greater flexibility in setting tuition to ensure competitiveness with peer states and be given autonomy to manage costs."
Under the voucher program, schools would no longer be technically state funded, and could pursue enterprise status - freeing them from a wide variety of state regulations regarding hiring, firing, tuition, contracts, and more. Some say it will allow schools to operate more like a private business.
"We are hopeful it will allow us to keep the cost of higher education moderate to low and at the same time operate this institution efficiently," said Ms. Shockley- Zalabak, whose school, along with the entire CU system, will become an enterprise as soon as July 1.
But critics say one of the flaws of the voucher program is that it will take money away from public schools because of the provision that allows public money to go to private colleges.
"It is taking public money and directing [it] to private [schools] at a time when our public schools are already underfunded," said state Sen. Ron Tupa, (D) of Boulder. "Once you open that door and set the precedent of using taxpayer dollars for private schools, you'll never be able to shut that door."
Additionally, the size of the voucher could change. If the number of students heading to college were to increase, as state officials hope, the limited amount of money for the vouchers would have to spread further. That would mean smaller vouchers and higher tuitions.
"The students are the big losers," Mr. Tupa said. "The more successful the program is, the less money it is going to give them."
O'Donnell welcomes that problem.
"I hope we do see a boom in college enrollment," he said. "I would love to go back to the legislature and say we have so many kids enrolling that the stipend is becoming worthless. To me, that is a good problem."