Why State Funding For Higher Education has decreased

It is no secret that states continually shrink their support for higher education and as a result, the tuition at public colleges and universities keeps increasing. Indeed, when those administrators are asked about the rising tuition, that is always their response. There is no shortage of media articles that talk about the dwindling support for education and all of the consequences this has had for tuition. Unfortunately, there is little said about why this is the case. The documentary Ivory Tower suggested it was a legacy of Reagan. He apparently said “the state should not subsidize intellectual curiosity.” The decline in state support occurred in the early 1980’s, a time of the conservative resurgence, so the dates line up. However, this seems to be more correlation than causation. After all, the federal government has limited power over the states. Additionally, everyone on both sides of the political spectrum agree on the necessity of a college education. This caused me to ask why has this reduction continued to happen.

Instead of writing a blog post lamenting about the loss in state funding for education, I decided to see if there is a satisfying answer behind what the budget officers are thinking when they say, “we need to reduce funds for higher education.” After all, people in such a position are likely highly educated themselves and thus know the importance of the system. Some of them are likely old enough to have kids going through college and thus they have the firsthand knowledge of the difficulties of the system. Being that they have government jobs, I doubt they make enough money to not be worried about tuition costs. Moreover, every state, including the more liberal ones, are having issues subsidizing education. There must be some explanation besides, “Reagan inspired Republicans don’t see the benefits of education,” which is what the documentary Ivory Tower seemed to suggest.

As it turns out, there is an association in this country for state budget officers. They recently put out a report which was funded by the Gates Foundation, about suggestions for bringing down tuition. They talk about the issue from their perspective and it was so enlightening! It felt like a breath of fresh air as it had real suggestions for moving forward instead of being a simple party line. As it turns out, there is more that can be done to improve education besides throwing more taxpayer money at it. As it turns, they really can’t increase funds for education no matter how much they would want to. They instead offered some reasonable solutions for how we accept today’s resource constraints and still operate our educational institutions efficiently without raising tuition.

Additionally, it turns out that my fears of what is happening in the system (top officials don’t agree) was confirmed at 3:34 in the video when the interviewee says the following:

Higher Education, State Budget, and Policy Officials frequently talk past one another when they are talking about spending

This is also reiterated in the last page of the report:

State budget officials and institutional leaders too often talk past one another in discussions about state finance and institutional costs

The report seems to be a good outline of what can change in higher education administration to control costs without comprising the mission. It seems some of the important drivers in tuition increases have been rising employee benefit costs as well as administrative bloat. It seems that if we can figure out how to get those factors under control then we might have a sustainable policy for the future. It does not seem like controlling those costs will compromise the mission of universities severely.

The important thing to remember in the debates about what to do with tuition increases is that universities are not the only organizations that have issues controlling costs. Administrators like to think that they have done all they could to control their costs but we can’t know if that is true unless an outsider does a rigorous evaluation of their finances. As it turns out, there is an entire industry, the management consulting industry, that goes to organizations and companies and figures out better ways for them to work. Thus, the resources exist for very experienced managers to evaluate whether or not university administrations are properly controlling the costs. I think it’s time we use those resources.

After all, we are caught in a vicious cycle that cannot continue. Administrators just say, “give us money,” while the state says “sorry but we can’t,” and then the burden is placed on the undergrads in the form of tuition. Just like many things in life, who suffers when the powerful don’t agree, the powerless. Student loan debt is causing massive financial headaches. There is no shortage of internet articles detailing how massive of a problem this debt is poised to become in the short-term and long-term. The trend is going to continue unless we do something. Administrators can keep saying “give us more money” to the state but as the report suggests, that is not going to happen no matter how much we scream and yell.


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