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A State Play Is Crucial (But It’s Not the Only One Needed) For College Affordability

Editor's Note: This blog by Mary Nguyen Barry & Michael Dannenberg was originally posted on the Education Trust's blog The Equity Line

States are the No. 1 driver of rising college tuition.

When state budgets get tight, state legislatures cut higher education funding in part because they know students and families will pick up the tab. After years of cuts, state spending on higher education is recovering, but still not to pre-recession, inflation-adjusted levels. If this trend continues unabated, eventually the only thing left to call public in “public higher education” will be the capital and reputational equity built up in state universities and community colleges. So-called public colleges will be increasingly likely to imitate the cash-chasing practices of nonprofit (and more disconcertingly, some for-profit) institutions of higher education. The elite public flagships could become even less socioeconomically diverse than they are today. And sadly the state and community colleges that serve the vast majority of low-income students and students of color may increasingly offer a substandard education.

But what if there was a way to reward states for investing in their colleges and to stem the tide toward privatization and stratification?

That’s the core idea behind the latest proposal by the American Association of State Colleges and Universities (AASCU), which calls for a new $15 billion federal matching grant program to encourage states to boost operating support for public higher education. States that provide per-student funding that is at least equal to 50 percent of the maximum Pell Grant award (currently $5,650) would receive an annual block grant; those that do not — like New Hampshire in 2012 — would not. States that increase higher education spending would see a larger federal reward; those that reduce spending would see a smaller one.

AASCU’s proposal is the first of several to come in the Reimagining Aid Design and Delivery (RADD) Grants and Work-Study Consortia, led by Ed Trust. AASCU’s proposal suggests a broad framework needed to realign investment by the two biggest players in higher education finance: states and the federal government. By linking per-student state investment to the federal Pell Grant, the proposal encourages the two players to move together in tandem on higher education funding, rather than against each other.

But while a state play is crucial to college access, affordability, and success, let’s not forget another culprit to the college affordability problem: colleges themselves.

Consider the fact that public, four-year colleges used to spend more than twice as much institutional grant aid on needy students, but now spend more on wealthy students: $869 million for wealthy students compared to $809 million for low-income students. In 1995, those figures were $124 million and $340 million, respectively. Shouldn’t a college’s investment in financial aid also align with that of the federal government’s — that is, putting needy students first?

Or consider the subset of colleges that perform astonishingly poorly on their core public missions of success and access for low-income students. More than 200 have dropout rates within four years of initial enrollment that exceed 90 percent. Are these colleges doing their fair share to warrant public investment? Are they affordable for the neediest students? Are they providing a quality, affordable education? Affordability assessments should be linked to some minimum level of college success and access to ensure national goals for higher education are met.

In the coming months, Ed Trust and its partners will expand upon AASCU’s proposal to develop the details of minimum institutional eligibility requirements to warrant receipt of a federal matching grant. Together, if adopted, these proposals will ensure that any higher education reform is centered on a shared partnership that will put students, and their success, first.

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