Mak­ing col­lege af­ford­able

We must re­form the fi­nanc­ing of higher ed­u­ca­tion to ad­dress con­fus­ing fund­ing poli­cies

Baltimore Sun - - COMMENTARY - By Miky­ong Min­sun Kim Miky­ong Min­sun Kim is an as­so­ciate pro­fes­sor at The Ge­orge Washington Univer­sity; her email is

At­tend­ing col­lege is less an op­tion and more a ne­ces­sity in to­day’s world, with most high school stu­dents go­ing on to at­tend. But many who grad­u­ate with col­lege de­grees will have in­curred crush­ing debt. In­deed, the Au­gust edi­tion of Con­sumer Re­ports puts the av­er­age debt per col­lege grad­u­ate at $37,000. We Amer­i­cans need to find ways to make col­lege ed­u­ca­tion af­ford­able again if we are to main­tain a highly skilled work­force drawn from a di­verse pop­u­la­tion.

Dur­ing this elec­tion sea­son, pres­i­den­tial can­di­dates pro­posed free pub­lic col­lege tu­ition. The idea of free tu­ition is not new. In the United States, un­til the 1970s, Cal­i­for­nia and some other states were able to pro­vide their res­i­dents with a vir­tu­ally free or af­ford­able pub­lic col­lege ed­u­ca­tion. More­over, sev­eral coun­tries have a free tu­ition pol­icy for pub­lic in­sti­tu­tions. The ob­sta­cles are not in­sur­mount­able. If gov­ern­ments and tax­pay­ers would step up to cover most of the op­er­a­tional cost for state col­leges and uni­ver­si­ties, the af­ford­abil­ity prob­lem would be largely solved.

Col­lege tu­ition lev­els and af­ford­abil­ity at pub­lic in­sti­tu­tions are usu­ally re­lated to states’ ap­pro­pri­a­tions for in­sti­tu­tions and state grants for stu­dents based on their aca­demic mer­its or needs. For the past few decades, state ap­pro­pri­a­tions have not kept up with the rapidly ris­ing in­sti­tu­tional op­er­a­tion cost. State gov­ern­ments have driven pub­lic uni­ver­si­ties to be more self-suf­fi­cient or en­tre­pre­neur­ial, but this has gen­er­ally led to a di­ver­sion­ary fo­cus on fund-gen­er­at­ing ac­tiv­i­ties or rapidly in­creas­ing tu­ition to fill the fund­ing gap.

Un­til state and fed­eral gov­ern­ments ad­dress fun­da­men­tal is­sues of col­lege cost and debt, we should pay spe­cial at­ten­tion to cur­rent poli­cies that at­tempt to sup­press the rates of tu­ition in­creases. All 50 states have poli­cies or mech­a­nisms in­tended for that pur­pose. It is im­por­tant for the pub­lic, leg­is­la­tors and pol­i­cy­mak­ers to un­der­stand whether and how state tu­ition poli­cies are work­ing, which cur­rent poli­cies should be re­moved, and whether new poli­cies are needed, be­cause they af­fect ed­u­ca­tional op­por­tu­ni­ties, the amount of col­lege debt, and other as­pects of our lives.

Tu­ition-set­ting or tu­ition-reg­u­la­tion pro­cesses are com­plex and ab­struse. In re­cent re­search, Jang­wan Ko, an as­so­ciate pro­fes­sor at SungKyunKwan Univer­sity in Korea, and I ex­am­ined tu­ition in­creases by the type of tu­ition con­trol poli­cies and by where the au­thor­ity to set tu­ition re­sides. We found that two pol­icy mech­a­nisms in par­tic­u­lar are in­ef­fec­tive or trou­ble­some: al­lo­cat­ing the pri­mary tu­ition-set­ting au­thor­ity to in­di­vid­ual pub­lic in­sti­tu­tions, and reg­u­lat­ing in­sti­tu­tions with a tu­ition cap pol­icy. Above all, tu­itions are more likely to in­crease when in­di­vid­ual in­sti­tu­tions have tu­ition-set­ting au­thor­ity rather than the state or state agen­cies hav­ing pri­mary tu­ition-set­ting au­thor­ity. States wish­ing to con­trol tu­ition in­creases at pub­lic in­sti­tu­tions should re­con­sider where to vest this au­thor­ity.

Tu­ition caps (max­i­mum al­low­able rates of annual in­crease) are gen­er­ally set by state leg­is­la­tures. We ex­pected these caps to result in smaller tu­ition in­creases at in­sti­tu­tions with this pol­icy than at in­sti­tu­tions with­out. How­ever, we found this not to be the case. Para­dox­i­cally, a cap pol­icy ap­pears to drive tu­ition in­creases higher. In most states, cap rates have been set higher than an­tic­i­pated in­creases in the Con­sumer Price In­dex or the Higher Ed­u­ca­tion Price In­dex, and these caps seem to be too high. Some in­sti­tu­tions rapidly raise tu­ition to the limit; oth­ers may ex­ceed the cap if the fi­nan­cial gain is per­ceived to be greater than the penalty.

We did, how­ever, find that two state poli­cies are ef­fec­tive in con­trol­ling tu­ition: link­ing tu­ition to stu­dent fi­nan­cial aid and pro­vid­ing in­cen­tives to limit tu­ition in­creases. Link­ing tu­ition with aid is a com­mon method for se­cur­ing col­lege ac­cess for low-in­come stu­dents. The states’ link­ing prac­tices in­clude the for­mal­iza­tion of re­la­tion­ships be­tween tu­ition level and fi­nan­cial aid — for ex­am­ple, low tu­ition-low aid and high tu­ition-high aid. In­cen­tives — re­wards or penal­ties (e.g., state fund­ing ad­just­ments de­pen­dent on in­sti­tu­tional per­for­mance) — can help states re­solve or pre­vent goal con­flicts be­tween uni­ver­si­ties and gov­ern­ment.

It is time to call for re­form in the fi­nanc­ing of higher ed­u­ca­tion to sys­tem­at­i­cally ad­dress the be­wil­der­ing ar­ray of fund­ing poli­cies. Gov­ern­ments and pub­lic in­sti­tu­tions of higher ed­u­ca­tion must act to make tu­ition af­ford­able while main­tain­ing the qual­ity of ed­u­ca­tion and the na­tion’s re­search lead­er­ship. In the mean­time, to re­duce de­pen­dency on tu­ition in­creases, the fed­eral gov­ern­ment should con­sider di­rectly sub­si­diz­ing the states in need and their pub­lic col­leges and uni­ver­si­ties.

In the near future, to­day’s stu­dents in higher ed­u­ca­tion will be the back­bone of our coun­try. Unbridled tu­ition in­creases not only strain stu­dents and fam­i­lies, but they also squan­der po­ten­tial tal­ent that our na­tion needs to re­main strong.

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