Battles Over Higher Education Create Sticker Shock for Families

One of the nation’s most important public policy questions is who pays for college

Luciana Dar teaching a class

Luciana Dar, an assistant professor of higher education

RIVERSIDE, Calif. (www.ucr.edu) — Decreases in state appropriations makes college less affordable for low- and middle-income students, as public universities seek to make up for lost revenue by admitting out-of-state, higher-income and higher-achieving students. Not only does this help the university’s bottom line in the context of reduced state support, it also helps universities in the competition for prestige and higher rankings.

Ironically, many states’ attempts to address the problem by spending more on student aid may minimize, but not solve the problem. This is among a set of findings from a policy brief, “The Politics of Higher Education Finance: The Role of States and Institutions,” published this week in Policy Matters, a publication of the University of California, Riverside’s School of Public Policy.

In the policy brief, Luciana Dar, an assistant professor of higher education at UC Riverside’s Graduate School of Education, summarizes a set of findings from her own research and those of others. In particular, she highlights the implications of changes in state spending on higher education in general (what is referred to as “state appropriations” for higher education) and state support in the form of student financial aid for affordability.

Dar points out this may actually lead to an increase in the “sticker price” of college and out-of-pocket costs paid by students, as institutions try to make up for lost revenues via tuition increases and/or strategic use of institutional aid awards.

“In the end, it is really the students, particularly low- and middle-income students, who are taking the hit because of a lack of coordination between state governments and universities,” Dar said.

In the past two decades, state governments have been scaling back their financial support for public universities. This pattern holds true across most states in the country and, as a consequence of state cutbacks, students and families have increasingly borne the costs of higher education, contributing to greater student debt.

Between 1988 and 2013, total state appropriations per full-time student went down from $8,579 to $6,105 in constant 2013 dollars, whereas students’ average share of costs went up from $2,685 to $5,445. This much is fairly well known.

Much less well known, however, is how colleges and universities respond to these cutbacks in state funding, and how these actions and reactions between states and universities affect tuition and affordability for different groups of students.

The brief comes out at a time when governors in Arizona, Wisconsin, Illinois and Louisiana have recently targeted higher education for spending cuts. Meanwhile, in California, Governor Jerry Brown and UC President Janet Napolitano have differed over a potential tuition increase, but are also meeting as a committee of two to work out their differences.

The attempt at coordination between Brown and Napolitano fits with the main conclusion Dar draws in the report. She writes: “…as policymakers attempt to increase postsecondary graduation rates and to minimize inequalities in access and achievement, solutions to the college affordability issue demand better coordination between federal, state, and institutional financing policies.”

Without this integrated approach, she writes “attempts to improve college affordability will remain partial solutions that fail to address the needs of students, families, and taxpayers alike.”

Policy Matters is a series of reports that provide timely research and guidance on issues that are of concern to policymakers at the local, state, and national levels.

“We are thrilled to showcase this work on higher education policy,” said Karthick Ramakrishnan, professor and associate dean of public policy and co-editor of Policy Matters. “In addition to featuring the best applied research on education policy, we are also pushing the research boundaries on health policy, environmental sustainability, and social policy, including immigration.”

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