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State Schools Let the Good Times Roll


A number of states with some extra money on hand are increasing funding for their public university systems. This is a significant reversal: With the exception of North Dakota and Wyoming, every state now spends less money per student on public education than it did at the beginning of the recession. Many public schools increased tuition to make up for the loss of state funding, and now a number of states are planning to use the new funds to freeze or reverse tuition increases at public schools, the WSJ reports:

When they approved the increase, Indiana state lawmakers told schools they expected tuition to increase by no more than 2% in the coming academic year. “If we’re going to recommend a significant investment in higher education, we have an expectation at keeping tuition [increases] to no more than the rate of inflation,” said [Indiana’s Commissioner for Higher Education, Teresa] Lubbers.

In Minnesota, lawmakers recently approved $250 million in new spending at public colleges and universities. About half will fund a two-year tuition freeze, with some of the rest going to tuition relief for low and middle-income students. Tuition and fees for state residents at the University of Minnesota have been rising rapidly for a decade, a period that also saw increases in administrative costs.

This is good news while it lasts, but it does little to address the real issues affecting higher education. The problem is not insufficient state funding for public schools, but that these schools are doing nothing to reverse the steady increase in costs that have pushed the price of a degree far beyond the means of most families. States should be using this new money to find ways to make education cheaper and more effective. Instead, administrators everywhere resist needed changes, preferring to use the new money to keep an outmoded system running a while longer.

Universities shouldn’t squander this bit of government largesse, which is likely to be short-lived. Huge pension liabilities and health care costs continue to exert intense pressure on state budgets. The time to make cost-saving reforms is when there is room in the budget for new investments. States that are smart enough to use this fiscal breathing space for long-term benefit will be in much better shape when the next, inevitable budget squeeze comes.

[College quad image courtesy of Shutterstock]

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  • AnnSaltzafrazz

    Then there is the stand-alone case of U Wisc. The university secretly hid a slush fund of over $600 million from the politicians. When the politicians found out they were a wee bit peeved. As a result, committee voting fell against tuition hikes this year for UW and for a pull back in funding.

  • Corlyss

    “North Dakota and Wyoming”

    Before the shale boom, they were frugal because they had to be. With boom money, are they going to repeat the trajectory of the Blue model?

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