On the Block: Higher Education

Congress is currently struggling to pass a budget for FY 2011 (which began six months ago). The debate has been overtaken by overwhelming concern about both the annual deficit and the national debt which is approaching $14 trillion. In the two-week continuing resolution passed on March 2, higher education programs in the federal Department of Education will lose $129 million in funding for just the next two weeks alone. At the same time Congress is proposing cuts in federal aid, the states themselves are experiencing fiscal crises and making difficult budget choices for their FY 2012. Public higher education has been on the receiving end of cuts from both federal and state legislatures.

The Obama Administration has proposed some big changes in direct federal aid to students in the FY 2012 budget released in early February. Pell Grants, which we wrote about in some depth on this blog earlier, would retain their current maximum of $5,550, but would be frozen at those levels. No Pell Grants would be offered for low-income students in summer school as a result of this budget. Additionally, graduate students would lose their in-school interest subsidies.

Scholarship programs on the state level, usually funded by outside sources such as class-action lawsuit settlements or lottery revenue, are also taking a hit. The HOPE Scholarship offered by the state of Georgia, funded by the state lottery, is facing drastic cuts in both eligibility and scholarship amounts. Previously, a student was required to graduate from a Georgia high school with a 3.0 GPA and maintain it throughout college, in return for 100% of tuition, books, and mandatory fees.

Now, the governor has proposed, and the lower house has passed, a bill that would change all of the above. Students who graduate with a 3.7 GPA or better would have 100% of tuition covered but no books or fees, and they would be required to keep a 3.3 GPA. For those who graduate with a 3.0 GPA but less than 3.7, their tuition coverage percent is tied to lottery revenues. This fall, 90% of tuition will be covered for HOPE recipients with a 3.0-3.6 GPA. There is no grandfather clause in the bill before the state senate, so those who had 100% of tuition covered in past years also lose that portion of scholarship money previously guaranteed.

Programs like HOPE of Georgia, Bright Futures of Florida, and New Mexico's Legislative Lottery Scholarship serve a crucial purpose to these states: retaining the best high school graduates. Money from these scholarships entices the high achieving students to stay at public institutions in their home state, which raises the profile of the university or college they attend and sends the scholarship money back to the state. There is also some evidence to suggest that a majority of students remain in the state they graduated from college in, which benefits the workforce. California, in fact, is facing a deficit of college graduates and is losing more than they retain each year.

At the same time students are losing scholarships and grants, public higher education is facing budget cuts and increased costs. The protests by students in the University of California system of 2009 are fresh in recent memory, and the UC system has continued to raise rates. This fall, tuition was increased a whopping 32%. Unfortunately, the UC president went before the regents and requested another 8% increase to combat a $1 billion decrease in state funding. After the regents agreed to the increase, the governor's FY 2012 budget includes another $500 million cut to California public higher education.

California is a visible, shocking example of public higher education cuts, but they are not alone. The Nevada System of Higher Education is contemplating declaring financial exigency (bankruptcy) to deal with the $47 million in cuts they've been asked to take by the state after slimming down by $49 million in the last four years. This would allow professors to be fired without regard to tenure and departments would be forced to cut or close. The Center on Budget and Policy Priorities notes that Florida has raised public tuition by 32% since 2009 and Minnesota cut state financial aid to almost 10,000 students and cut it by 19% for those who kept it.

One of President Obama's current slogans is Winning the Future, but it is hard to see a bright future for this country's youth through the haze of budget cuts affecting them, their families, their friends, and neighbors. Having an educated workforce is crucial to the President's vision of a nation with a strong innovation industry and first place test scores. The innovators and teachers of tomorrow are today's college student wondering how, if at all, they will be able to afford to continue their education.