Cost of college

Higher education panel wrestles with controlling tuition rates

PHOTO: J. Zubrzycki
Parents talk to Memphis Rise employees about the new charter school

For two years, Colorado college students have been protected by a 6 percent cap on tuition increases.

But a draft new policy being considered by state higher education officials looks a lot like an old system that gave colleges and universities significant flexibility in setting tuition rates. In some instances, that led to double-digit increases.

The Colorado Commission on Higher Education, meeting Thursday in Colorado Springs, gave Department of Higher Education staff the go-ahead to refine the proposal before the commission makes a final decision.

“It’s expiring,” Diane Duffy, department chief financial officer, said of the current tuition cap. “The state of Colorado is going to need to do something” about tuition.

Any new policy would amount to a recommendation, with legislators having the final say.

In broad terms, the proposed policy would work like this: Every year the department and the commission would consider the expected amount of state funding for the coming school year and affordability factors for students, plus the financial needs of individual colleges and universities, in order to recommend a tuition increase cap.

Institutions would be allowed to increase tuition above the cap if they met commission-set requirements for affordability, student completion and other factors.

The biggest factor in the tuition equation is the level of state support.

“They are so inextricably linked,” Duffy said.

What college costs

State budget cuts after the 2008 recession forced state colleges and universities to raise tuition rates to keep their budgets balanced. This year state colleges and universities are receiving about $740 million in state support but raise more than $2 billion in tuition revenue.

Higher education experts don’t believe the state can restrain tuition growth merely through cost savings at colleges and universities.

Colorado colleges have less revenue per student than institutions in most other states and “are already far more efficient than comparable public institutions” in other states, according to a cost study done for the department this summer.

That study, done by the Boulder-based National Center for Higher Education Management Systems, also noted “the share of the [higher education] budget devoted to expenditures for items other than compensation has declined substantially.”

A 2014 law requires the commission to deliver a proposed new tuition policy to the legislative Joint Budget Committee by Nov. 1. DHE staff members are continuing to work on the draft policy and will gather feedback from college and university leaders and others. The commission is expected to vote on a final version at its Oct. 29 meeting.

Tuition as a political issue

Tuition increases in recent years put pressure on student and family budgets and also came at a time when the state was trying to increase enrollment of low-income and first-generation students, for whom college costs can be a significant barrier.

Rising tuition rates sparked concern among legislators, including some who tried to make college affordability a 2014 election issue.

During the 2014 session, lawmakers increased funding for higher education by 11 percent and also set the 6 percent cap on tuition increases for resident undergraduate students.

Tuition increases have moderated a bit recently. The median percent increase in tuition was 5 percent for 2014-15, the lowest since 2006-07, when it was 2.5 percent.

Proposal echoes prior tuition flexibility law

As state funding shrank after the 2008 recessions, lawmakers threw colleges a lifeline with a 2010 law that gave institutions greater power over tuition than they had in the past.

That law set a 9 percent cap for five years but allowed the commission to approve larger increases if institutions provided detailed rationales for why they needed more money.

Most state colleges took advantage of that flexibility, and double-digit rate increases were imposed by some colleges. The legislative repealed that flexibility law in 2014.

In contrast to the 2010 law, the new proposal would be more integrated into the annual budget setting process for higher education, and the new plan would set different requirements for colleges that want to exceed the annual cap.

Commission doesn’t have the final word

Lt. Gov. Joe Garcia, who also heads DHE, reminded commissioners that they won’t have the final say on tuition, regardless of what new plan is adopted.

“What we would be adding here is a recommendation about tuition increases,” he said. “The General Assembly could elect to do something different.”

Commissioner Jeanette Garcia, an educator from Pueblo, said, “My hope is that the General Assembly starts recognizing that this body and the department are the right people to be making these decisions.”

Commissioner Paula Sandoval of Denver, a former state senator, noted, “We have to convince 35 senators and all of the representatives that what we’re doing is valid and sound.”

Bigger budget problems could derail any formula

The lieutenant governor also stressed that a tight state budget could make a new tuition policy meaningless if lawmakers have to cut support of higher education.

He referred specifically to the hospital provider fee, income that doesn’t come from taxes but which still counts against the annual state revenue limit required by the Taxpayer’s Bill of Rights. An attempt to reclassify the fee so it doesn’t count against the limit failed during the last legislative session, but the Hickenlooper administration plans to try again in 2016.

“If the hospital provider fee isn’t converted … there’s no chance there will an increase for higher education, and probably a decrease” in 2016-17, Garcia said. “And we’ll see tuition go up.”

Indiana's 2018 legislative session

Indiana lawmakers OK up to $100 million to address funding shortage for schools

PHOTO: Scott Elliott

Indiana lawmakers agreed to dip into reserves to make up a shortfall to get public schools the money they were promised — and they’re trying to make sure it doesn’t happen again.

Both the House and Senate overwhelmingly voted to approve the final plan in House Bill 1001. The bill now heads to Gov. Eric Holcomb’s desk.

Rep. Tim Brown, a co-author of the bill and chairman of the House Ways & Means Committee, said it was necessary to take the uncommon step and have the state to use reserve funds to make up the gap, but in the next budget year making up that difference will be a priority. Brown said he, other lawmakers, and the Legislative Services Agency will work to make sure projections are more accurate going forward.

“Do procedures need to be changed?” Brown said. “We’re going to be asking those questions” during the next budget cycle.

Estimates on the size of the shortfall have ranged widely this year, beginning around $9 million and growing as new information and student counts came in. Projections from the Legislative Services Agency reported by the Indianapolis Star had the gap at $22 million this year and almost $60 million next year.

The final bill requires the state to transfer money from reserves if public school enrollment is higher than expected, as well as to make up any shortages for students with disabilities or students pursuing career and technical education. The state budget director would have to sign off first. Transfers from reserves are already allowed if more voucher students enroll in private schools than projected, or if state revenue is less than expected.

The budget shortfall, discovered late last year, resulted from miscalculations in how many students were expected to attend public schools over the next two years. Lawmakers proposed two bills to address the shortfall, and the House made it its highest legislative priority. The compromise bill would set aside up to $25 million for this year and up to $75 million next year. The money would be transferred from reserve funds to the state general fund and then distributed to districts.

The bill also takes into account two other programs that lawmakers think could be contributing to underestimated public school enrollment: virtual education programs and kids who repeat kindergarten.

District-based virtual education programs would be required to report to the state by October of each year on virtual program enrollment, total district enrollment, what grades the virtual students are in, where they live, and how much of their day is spent in a virtual learning program. These programs, unlike virtual charter schools, are not separate schools, so it can be hard for state officials and the public to know they even exist.

The report will help lawmakers understand how the programs are growing and how much they might cost, but it won’t include information about whether students in the programs are learning or graduating. Virtual charter schools in the state have typically posted poor academic results, and Holcomb has called for more information and action, though legislative efforts have failed.

Finally, the bill changes how kindergarteners are counted for state funding. The state changed the cut-off age for kindergarten to 5 years old by Aug. 1 — if students are younger than that, they can still enroll, but the district won’t receive state dollars for them. Some districts were allowing 4-year-olds to enroll in kindergarten early, Sen. Ryan Mishler said earlier this month. Then those same students would enroll in kindergarten again the next year.

Despite increases passed last year to boost the total education budget, many school leaders have said they struggle to pay salaries and maintain buildings, which is why funding shortfalls — even small ones — matter. This year’s unexpected shortfall was particularly problematic because districts had already made plans based on the state budget.

Find all of Chalkbeat’s 2018 legislative coverage here.

let the games begin

Assembly pushes for $1.5 billion boost to education spending

PHOTO: Photo by Jonathan Fickies for UFT
UFT President Michael Mulgrew interviews New York State Assembly Speaker Carl Heastie.

In a tight budget year, New York State’s Democratic-led Assembly wants to increase education spending by $1.5 billion, officials announced late Monday night.

The proposed increase  which would bring total education spending to $27.1 billion  is significantly more than the governor’s suggested $769 million increase. Still, the amount is a slightly smaller boost than the Assembly backed last year, which is likely a reflection of a difficult fiscal situation faced by the state this year.

State officials are fighting against a budget deficit, a federal tax plan that could harm New York, and the threat of further federal cuts. The potential lack of funding could be the only sticking point in an otherwise quiet budget year for education matters.

As part of its education agenda, the Assembly backed a number of programs it has in the past. The plan supports the My Brother’s Keeper initiative, which is designed to help boys and young men of color reach their potential, and “community schools,” which act as service hubs that provide healthcare and afterschool programs.

The release of this plan kicks off the final stretch of the state’s budget process. The governor has already outlined his proposals and the Senate will likely follow soon, setting up the state’s annual last-minute haggling.

The budget is due by April 1, but could always be resolved later similar to last year.