The coronavirus has caused severe budget problems for American higher education. But many colleges’ financial troubles are much larger than the virus. They have been building for years and stem, above all, from a breakdown in this country’s hodgepodge system of paying for higher education.
The current system arose after World War II and depended on three sources of money: students (and their parents); the federal government; and state governments. Of those, state governments were supposed to provide the most money. That’s why many Americans attend something known as a state college.
Over time, though, state officials came to a realization. If they cut their higher-education budgets, colleges could make up the shortfall by raising tuition. Many other state-funded programs, like health care, highways, prisons and K-12 education, have no such alternative.
“In every economic downturn since the 1980s, states have disproportionately cut college and university budgets,” Kevin Carey writes in a new Washington Monthly article that offers an exceptionally clear description of the problem. Since 2008, states have cut inflation-adjusted per-student spending by 13 percent, according to the Center on Budget and Policy Priorities.
These budget cuts have left most colleges struggling for resources, even as elite colleges, both private and public, can raise substantial revenue from tuition and alumni donations. Not surprisingly, inequality in higher education has grown. Many poor and middle-class students who excel in high school attend colleges with inadequate resources and low graduation rates — and end up with student debt but no degree.
The decline in state support for higher education is unlikely to reverse itself, and most middle-class families can’t easily afford to pay rapidly rising tuition bills. That leaves the federal government. A central question, then, is whether it will step in — or whether a college education will become ever more of a luxury good.
Potential solutions: Joe Biden has proposed a big expansion of federal support for higher education, which would make college free for any family earning less than $125,000 a year. President Trump does not have a plan to make college less expensive.
Carey, who works at the New America think tank, argues that Biden’s plan sends too much money to elite colleges that don’t need it. Carey instead proposes a new federal program in which colleges — including community and technical colleges — could choose to receive more funding in exchange for charging a simple, affordable tuition.