Direct taxpayer support and student-aid programs are in jeopardy as states struggle to close deficits
When governors and legislators scoured their budgets this year for programs
ALSO SEE: State Aid to Private Colleges |
to trim, public colleges weren’t alone on the hit list.
Private colleges in at least half a dozen states receive direct subsidies from taxpayers, and many of those programs faced new scrutiny -- and in some cases were slashed -- as revenues continued to lag in the states. In addition, private colleges lobbied hard to protect state-based student-aid programs that help residents who attend private institutions in their home state.
The results of legislative sessions this summer have been mixed for private colleges looking to keep the public money flowing, particularly when it comes to direct state aid.
In Illinois, lawmakers voted to wipe out the $21-million in state funds that private colleges there received last year. It was the first time since the program started, in 1971, that the colleges failed to receive at least some state dollars. New York’s private institutions aggressively rallied support for their state subsidy and persuaded lawmakers to provide them with $44.3-million, the same amount they received last year, even as the operating budgets of public universities in the state were cut. In other states, such as Maryland, direct aid for private institutions was reduced, although not as much as some had feared.
Legislatures and governors elsewhere, including in Michigan and Pennsylvania, are still working on budgets that also may cut aid to private institutions. Michigan’s governor, Jennifer M. Granholm, a Democrat, proposed eliminating the $6.9-million that the state provides private colleges based on the number of degrees they award to Michigan residents in undergraduate, nursing, and certain other medical programs.
“Few other states provide direct operating support to independent colleges and universities,” Ms. Granholm said in her budget proposal, “and Michigan can no longer afford to continue direct financial support to private colleges.”
Private-college officials argue that the direct subsidies are an efficient use of money and that eliminating them is shortsighted. Many of the programs began in the late 1960s and early 1970s, when states wanted to preserve and expand the choices of colleges and majors available to state residents without building new public campuses.
The money states hand out to private institutions is only a fraction of the several thousands of dollars per student that public institutions receive. In return, private-college officials say, they offer academic programs that public colleges may not, attract out-of-state students who may stay in the state after graduation to work, create businesses and jobs through research, and ease the burden that a growing student population places on public institutions.
“We’re a very good investment for the state,” says David W. Tretter, executive vice president of the Federation of Independent Illinois Colleges and Universities, who argues that a bad budget year may be the best time for lawmakers to support the education of state residents at private colleges because it is cheaper. Last year, Illinois spent an average of $190 on private institutions for every Illinois resident they enrolled, compared with about $4,600 per student that the state provided to public colleges.
Supporting Quality
In Maryland, private colleges benefit from one of the most generous direct-aid formulas. The institutions are allocated money based on the number of in-state and out-of-state students they enroll, the same factors the state uses to distribute funds among the its public colleges. Many other states provide dollars to private institutions based on in-state residents alone.
While at the Johns Hopkins University that support amounts to less than 1 percent, or $13.2-million, of the university’s total $2-billion budget, university officials note that the state dollars fill spending gaps in student aid and facilities and provide more than 3 percent of some of their schools’ budgets. Such assistance, the officials say, helps Johns Hopkins -- the largest private employer in the state -- maintain top-notch laboratories and hire distinguished faculty members. A survey commissioned by the Maryland Independent College and University Association in April found that almost two-thirds of registered voters in the state said that they supported the grant program for private colleges.
The private-college program also has fans among public-university leaders. William E. Kirwan, chancellor of the University System of Maryland, believes that basing state support for public and private institutions on the same basic formula helps unify higher education in ways that better serve the needs of the state and of each sector. “It strengthens our sense of partnership and collaboration,” says Mr. Kirwan, whose system sustained a 14-percent cut in state aid for 2003-4. “Because we do speak with one voice, whatever cuts we had could’ve been even greater if we’d been split apart.”
This year, Maryland’s Department of Legislative Services recommended cutting the private-college grants in half, to $22-million, and altering the formula so that private institutions would no longer receive money for out-of-state students. But lawmakers rejected the restructuring plan, even as they trimmed the program’s budget by $11-million.
As a result, this year, Maryland’s private colleges will receive about 10.7 percent of the state subsidy that goes to public institutions, down from about 16 percent last year.
Maryland Del. Frank S. Turner, a Democrat who sits on the Appropriations Committee in the House of Delegates, says he and other lawmakers wanted to minimize the budget cuts for higher education, including direct aid to private colleges. He specifically lauded the private institutions for attracting many “outstanding” students from other states who then often stay to work in Maryland. “We have some very good institutions,” Mr. Turner says, “and we want to try to help their students.”
Financing Performance
Beyond arguing for the fiscal efficiency of their direct-aid program, New York private-college officials found another reason to plug the program, which dates from 1968. Because the state subsidy is allocated to private institutions based on the number of degrees they award, the money rewards institutions that graduate high percentages, say officials at New York’s Commission on Independent Colleges and Universities.
Gov. George E. Pataki, a Republican, had advocated the same goal -- higher college-graduation rates -- through another avenue, proposing to alter the state’s need-based-aid program so that public- and private-college students would receive one-third of their assistance only after they had graduated (a proposal that lawmakers rejected). So, by proposing cuts in private colleges’ operating aid, independent-college officials argue, the governor effectively pushed a policy that would have undermined his own aims.
“We have a 30-year track record of a program that the governor is screaming for,” says Terri Standish-Kuon, vice president for communications and administration at the New York independent-college commission. “It’s the notion of funding outcomes rather than funding inputs.”
That message is one of several that private colleges used to fight Mr. Pataki’s plan to cut their direct aid by 42 percent, or $18.7-million. This year, supporters of private colleges in New York sent more than 300,000 e-mail messages to state lawmakers, urging them to support the subsidies and the state’s need-based Tuition Assistance Program. The independent-college commission also mailed a series of 15 postcards, each listing a different reason that lawmakers should continue to back programs that support private institutions.
Abraham M. Lackman, president of the New York private-college group, tailored his pitch differently for each chamber of the Legislature. In the Democratic-controlled State Assembly, he emphasized that the state’s private colleges graduate a greater number of black and Hispanic students than either of the state’s two public-university systems (though a much greater percentage of graduates of the City University of New York are minority students), and that one in three full-time students from New York at the state’s four-year private colleges comes from a family earning less than $40,000. To the Senate’s Republican majority, Mr. Lackman focused on the role of private colleges in fostering jobs and generating $40.2-billion each year in economic activity for the state.
“The private colleges and universities in New York are serving a public purpose that is equally as great as public institutions’,” Mr. Lackman says, “and they need to be supported.”
Different Priorities
For the most part, public-college officials in New York and elsewhere stayed out of the debate over whether to cut direct aid to private institutions. But when it came to need-based financial-aid programs, public and private institutions took different approaches with state lawmakers. Private colleges urged lawmakers to put money into student-aid programs first, since they benefit their students, while public-college leaders sought to protect their base budgets, too.
Matthew Goldstein, chancellor of the City University of New York, says he wishes that state officials had taken a more balanced approach with the state’s Tuition Assistance Program and CUNY’s operating budget. For instance, state funds for the Tuition Assistance Program, which provides need-based grants to public- and private-college students, increased by 13.9 percent, or $101.5-million, while state aid to CUNY’s four-year colleges decreased by 14.3 percent, or $83.1-million.
While Mr. Goldstein supports raising financial aid, which will help some students pay for tuition increases enacted this year at CUNY and the State University of New York, he calls the cuts to CUNY’s base budget “lousy.” He argues that state lawmakers forced the university to rely too much on students to make up for the loss in state aid. The state budget led CUNY’s Board of Trustees, in June, to approve a 25-percent tuition increase for students at four-year colleges, a raise that was greater than what Mr. Goldstein had hoped.
“I don’t want to see the operating budget being supported by tuition,” Mr. Goldstein says. “It’s a public institution, and there ought to be public support for it.”
Elsewhere, tensions over the priorities in state higher-education budgets became particularly strong in Minnesota after the state’s Private College Council ran a series of newspaper, radio, magazine, and billboard ads calling on state lawmakers to make need-based financial aid a top item in the budget.
But the campaign irritated some public-college officials and students who felt that, in pushing for lawmakers to back the Minnesota State Grant program, the private colleges were endorsing a shift in state funds away from operating aid to the state-university systems. Gov. Tim Pawlenty, a Republican, had suggested such a transfer earlier in the year.
“Our position was that protecting our base budget was our top priority and that any increase in State Grant funding should not come out of our base,” says Linda Kohl, associate vice chancellor for public affairs at the Minnesota State Colleges and Universities system. She says the strained relations over the issue stem from that fact that private-college students receive more than half of the state grants even though public institutions educate more than 80 percent of Minnesota’s undergraduates.
In the end, state lawmakers increased the State Grant program by about 17 percent, or $40-million, over two years. At the same time, the Legislature cut state operating aid by 15 percent, or $196-million, for the University of Minnesota System and by 14.6 percent, or $191.5-million, for the Minnesota state-college system.
Ms. Kohl says the system views the overall student-aid budget outcome as a “wash,” though, because lawmakers also approved some changes that state-college officials sought in how the grant program and other financial aid is distributed. She says those alterations will help protect her system’s students from sudden cuts in work-study and child-care assistance programs that state-college students tend to use more heavily than do private-college students.
Private-college officials, meanwhile, praise the increase in student grants, although they add that that money will still not fully meet the growing financial needs of the state’s public- and private-college students. They also defend their ad campaign, which they say was meant to benefit all of the state’s residents.
“The Minnesota State Grant program is built on sound higher-education and economic public policy,” says David B. Laird Jr., president of the private-college group. “The program allows Minnesota students to choose the college -- public or private -- that’s best for them. And that’s good for all of Minnesota.”
STATE AID TO PRIVATE COLLEGES |
Several states provide taxpayer funds directly to their private colleges, in addition to the appropriations they give to public institutions. Here is a snapshot of the programs for private colleges in three states: |
| Illinois Financial Assistance Act | Maryland’s Joseph A. Sellinger Program | New York’s Bundy Aid |
Year started | 1971 | 1971 | 1968 |
How it works | Private institutions receive state funds based on the number of Illinois undergraduates they enroll. | Private institutions receive state funds based on the number of Maryland and non-Maryland students they enroll. | Private institutions receive state funds based on the number of degrees they award. |
State appropriation, 2003-4 | $0, down 100 percent from $21-million in 2002-3. | $33-million, down 25 percent from 2002-3. | $44.3-million, the same as 2002-3. |
Direct state aid per student at private colleges, 2003-4 | $190 (2002-3) | $904 | Funds given per degree: $190, associate $475, baccalaureate $301, master’s $1,442, doctoral |
Direct state aid per student at public colleges, 2003-4 | $4,596 (2002-3) | $8,447 | $2,300 for community colleges; figure for four-year colleges not available |
SOURCE: Chronicle reporting |
http://chronicle.com Section: Government & Politics Volume 49, Issue 47, Page A19