Affordability, access center of funding conversation

Higher education funding is on a high-speed train heading toward the 2011-2012 cliff where the federal stimulus money bridge is out and the governor’s office is standing at the bottom of the cliff surveying the situation.

“There are all sorts of discussions out there about higher ed. funding and what’s going to happen at a certain point in time in the future, particularly the concern about when recovery act dollars go away,” Gov. Bill Ritter said.

Funding for higher education in Colorado has been cut by more than $300 million for the 2009-2010 budget year, with more cuts expected to come before the 2010-2011 budget is finalized.

The cuts have been offset by federal stimulus funds from the American Recovery and Reinvestment Act, but are being exhausted as the legislature is trimming back funds further to balance the state budget.

Ritter has assembled a task force to work on a master plan for higher education in Colorado, with the primary and immediate focus on finding a solution to funding.

Four subcommittees have been formed to discuss: sustainability, tuition and funding issues; mission and governance, how many institutions should there be in the state and how should they serve students; pipeline, the transition from K-12 education to higher education; and accessibility.

Feb. 25, Ritter, Rico Munn, the executive director of the Department of Higher Education, Jim Pulsfot, the chair of the Colorado Commission on Higher Education and Jim Lyons, the co-chair of the steering committee met to discuss the issues surrounding higher education.

Tuition flexibility

One idea being tossed around at the capitol to address the issue of higher education funding is to allow institutions to have tuition flexibility.

“It’s important to understand tuition is not tuition autonomy. Historically, there have been restrictions put on tuition increases,” Ritter said.

He added the restrictions placed on increasing tuition are in place to protect the affordability and accessibility for students, especially in the middle and low-income brackets.

The idea behind flexibility is to allow institutions to set tuition rates individually.

Metro President Stephen Jordan said he is in favor of tuition flexibility, as are the rest of the college presidents in Colorado.

“Not only will there not be any new state support, but I think that it is a high possibility of an additional budget cut in a year or two,” Jordan said. “And so, tuition will be the only source of revenue we have for sustaining ourselves and growing our institution.”

Jordan said not only does he foresee a decline in state support, but also an increase in operating expenses for the college in the form of rising utility bills and increases in classified staff pay. Another factor to consider is setting aside part of a tuition increase for financial aid purposes.

“The question is, if you are setting aside 20 percent of your tuition increase, which is what we have been doing every year for financial aid, that means for every $100 you are raising, you are setting aside $20 for financial aid rather than operations,” Jordan said.

Financial aid reform

If tuition were to increase, it would be conducive to a higher-aid model, meaning more students would become eligible for federal Pell monies. The middle-income bracket students, however, would shoulder the increased cost directly.

Jordan said consultants to the committees have been advocating for institutions like Metro to be able to keep all the additional revenue from increased tuition and have the state pick up the financial aid component.

Another thought is, by an increased number of low-income students becoming eligible for more federal money, the college would be able to make additional funding available through scholarships.

“By providing tuition flexibility, you would have to change the model of financial aid over the current one if you are going to see increase differ over what we have seen in the past,” Ritter said.

Ritter said he has a few ideas on a financial aid model, but declined to comment on any potential new models for financial aid until he has seen the recommendations presented by his task force.

Tuition increases in the mean time

Jordan said for Metro to break even this year, there would need to be a 9 percent tuition increase.

Next year, if tuition flexibility is on the table, the increase would reach double digits.

“I certainly don’t see us doing 20 percent or, like Arizona did, 40 percent tuition increases in a year,” Jordan said. “I think it could be multiple year double digits. I think what we have to do is model it out, and we haven’t had a chance to do that.”

Jordan said modeling out tuition increase over multiple years presents several challenges, including changes in state support and operating costs.

He said it encourages being conservative in estimates and projections.

Munn said it is important the out-of-pocket cost to students doesn’t ultimately impact, and outstrip the ability for people to access higher education.

Timing is everything

Concerns have been raised about how the upcoming changes in legislative leadership, as well as a new governor coming into office in 2010, will affect the work of the task force.

“Most of the evidence around the country, surrounding meaningful higher education reform has been led by a governor who has been very intimately involved in it and it has been about their entire term,” Jordan said.

Ritter said assigning the task force to craft a master plan for higher education was spurred largely in part to the unexpected length and severity of the economic recession.

Ritter said he hopes to present a recommendation from the sustainability subcommittee to the legislature by the middle of March, but no final decision or plan has been submitted. The March deadline would allow time for legislation to be crafted and discussed this session.

Proposals from the other subcommittees will be submitted in the fall.