Issue
Paper: The
Colorado Higher Education Grant (COHEG). Presented
to the Governor’s Blue Ribbon Panel on June 28, 2002, and further discussed
Aug. 1, 2002.
Presentation
by James Jacobs and Brian Burnett.
Issue:
The Colorado Commission on Higher Education and the Governor’s Blue Ribbon
Panel on Higher Education, have proposed a policy change to drastically alter
the manner in which higher education is funded in Colorado.
Currently, there is what as know as a Reexamination model which funds
Full Time Enrollment (FTE) for each student at the institution with a regard to
the role and mission of the institution and dollars required to complete that
mission. The calculations involved
with this form of funding are tedious and often confusing—some would even say
unreadable to the average person. For
instance, given the high cost of certain physical sciences at the major research
institutions such as CU and CSU, they receive more dollars per FTE than an
institution such as Metro State College.
Under the COHEG proposal, instead of each school receiving money for
students directly from the state, the money would go to the students and then to
the schools. This money would be a flat “voucher” of, for example,
$4,300. Basically, the money would
go into an account, and then (seconds later) be transferred to the school.
No longer would the schools receive state money, the first step toward
getting out from under the TABOR restrictions by becoming state run enterprises.
TABOR allows for programs that receive less than 10% of their funding
from the state to be exempt from certain restrictions and to remove the cash
funds they receive (tuition in this case) out from under the overall state pot.
Under this plan direct state funding would be well below 10%.
Current deliberations would give the grants only to in-state students.
It is unclear at what point the grant would be cut off. Certainly the state would look to cap the number of hours a
student could take and still receive a grant (discussion has centered around 135
credits). However, it is unclear
how someone with a professional certificate or associate’s degree, especially
earned in another state, would factor into the equation.
Arguments
for:
Arguments
against:
Concerns
for students:
At first glance, this appears to be a “free
money” for students program. Many
view this as the state writing a check to a student for $4,300 and then the
student using the money as he or she sees fit.
This is by no means the case. Under
this system, the state takes the total amount of money spent on higher
education, divides it by the number of students and then funnels the money to
the schools. Quite simply, the
money currently sent out per FTE would be sent out again but in the form of a
flat amount rate per student. This
money would by no means cover the cost of a post-secondary education.
There would still be tuition and fees and books.
In order to implement the program, measures would be
put into place to create a short-term equilibrium with current funding levels.
This would require tuition to drop at some institutions and increase at
others. For example, tuition at CSU would increase (because they
would receive fewer general fund dollars than they do now) while tuition at
Metro would drop dramatically (the $4,300 is quite a bit more than what they
receive currently). This seems
reasonable and even beneficial on the surface and in the short term. However, two things must be taken into account.
First, there is no guarantee that those tuition levels would remain at
low rates. Unless there are
agreements (placed in statute) that those tuition increases are held at a modest
rate, TABOR no longer limits the amount of money schools can take in from cash
funds and gives neither the schools who propose them nor the legislators who
enact them a fiscal reason to hold them down.
Second, if tuition could remain at such a low level at a school
such as Metro with modified open enrollment, or even a selective enrollment
institution, the number of students would be nearly unlimited given the cost.
(One need only look at what has occurred in France with free tuition,
there are lines out the doors for certain classes.)
This is certainly counter-productive to access policies, especially if
this should lead a school such as Metro have to cap its enrollment.
Access is also the issue in a purely tuition or
voucher funded system. Should
enrollment in schools such as Western, Mesa, Adams, and some of the more rural
community colleges dip even for a year, the funding to keep the school operating
could drop below sustainable levels. What
then occurs is a downward spiral as the school must cut costs, students transfer
or shy away from the institution due to lack of services, the funding drops
again, and so on until the school is put out of existence.
Once these schools disappear, the opportunity costs for attending a
post-secondary institution become that much greater.
Lower income students do not have the means to leave their jobs or
families in order to move to a college town to receive needed education.
Certainly the argument for quality increasing as the
schools compete for students is a valid one.
However, the above arguments should be recognized as indicators of a
system that lacks the qualities of a true free market system given public policy
desires. Education is something the
government takes a stake in because of the future benefits to its citizens.
If the free market removes unprofitable entities, as most certainly will
be the case, citizens outside of the Front Range will be denied the geographic
access and the funding needed to attend a post-secondary institution.
And quite simply, with fewer institutions, the existing schools could
find themselves overcrowded by students that may have taken their tuition
elsewhere had the opportunity presented itself.
Recommended
Position:
In order to preserve the system of higher education enjoyed by the
greatest number of citizens in Colorado for the present and the future, the
Colorado Student Association should oppose the proposed system in its current
form for a number of reasons. First,
the scheme for transferring dollars from the state to the student to the school
is little more than an accounting trick that is certain to face legal challenges
from pro-TABOR forces. Certainly
the institutions would no longer receive direct funding, but the General Fund
dollars would be utilized in the same manner that they are now.
Secondly, should the legal battles be won, the institutions, freed from
the revenue caps of TABOR, would have the ability to raise tuition without fear
of triggering a refund to the taxpayers. Since
TABOR’s passage, tuition increases have been kept to a very low average of
1.3% per year. Without the
protection of TABOR, 12% or greater increases could become the norm.
Some have even hoped to limit increases to some factor of inflation,
which seems reasonable until the time when inflation could again reach
double-digit levels. Third, this
system would give no guarantees that each of the institutions in the state would
survive a couple of lean years. No longer would the state be able to back-fill losses in
tuition revenue with general fund dollars.
Certainly there is some room for compromise; there is no question that
something must be done to gain more state money for better, more, high-quality
education in the state. Equality in
funding per student puts much more power in the hands of students and the
schools they choose to attend. However,
without a number of guarantees regarding tuition, access and financial aid, a
voucher system would be extremely damaging to the students of Colorado.
Derek
M. Johnson
Executive
Vice-President
Higher Ed. Grants
Sub
Issue: Credit Cap
Issue:
Under a system where the state subsidizes the education of its citizens, public
policy would dictate that at some point the subsidy would end.
Under the new COHEG Program, the level could be as low as 132 credits, a
level that does not allow for much wiggle room.
·
Currently
there is no limit on the length of state subsidy for post-secondary education.
·
132
credits allows for a 10% margin of error for a 120-credit degree.
·
150
credits is equivalent to 5, full-time enrollment, years in school.
·
Current
federal aid for higher education ends at 180 credits.
·
The lower
the credit limit the greater the state grant will be for each student below that
level.
·
Any
student facing financial hard-ship in the latter years of college will have a
larger obstacle to climb should he or she be forced to pay the full cost of
education to complete the last few required courses.
CSA’s
Position:
CSA does support a credit limit at some level in order to ensure the
availability of funds for all students. However,
a limit as low as 132 credits does not allow for students to choose a major
based on experience in a program, instead, they would feel locked into a major
regardless of the market need for that major or their continued interest in the
subject. 150 credits would allow
for the necessary experimentation with courses and changes in the marketplace.
A low limit would also more adversely affect the students that do not
have the background and support at home or at school that would grant them the
knowledge of the system needed to complete a college program in four or
four-and-a-half years.
Sub
Issue: Differentiated Vouchers
Issue
Paper:
It could be argued that the cost of educating juniors and seniors is
greater than the cost of freshman and sophomores.
Therefore any higher ed. grant system should have two-tiers, a greater
grant for upper division students and a lesser grant for lower.
Issue: Higher education grants could be differentiated to allow for
higher grants for juniors and seniors to allow for the higher cost of educating
those students.
CSA
Position:
Differentiated grants are not beneficial to the access and qualities of
the goals of Colorado higher education. Schools
that offer initial access but have a high rate of transfer lose out in this
funding model, and therefore are unable to provide the guidance for students.
It is important for retention and graduation within the entire system for
all students to have the information, guidance, and support in the early years
to succeed in the years to come. This
costs money, and that money would not be available should grants for upper
division courses be higher than lower division.