Federal funds will ‘inevitably’ replace states, but fights loom

After decades of declining state support for higher education in the US, federal policymakers are trying to decide if they want to help pick up the burden that has so far fallen largely on students and their families.

The early answer from Capitol Hill – despite all the presidential campaign trail rhetoric about free college – is a big “maybe”.

The idea of the federal government joining or supplanting states as the key funder of US higher education, at least for the first two years of study, strikes many politicians and analysts as inevitable in the long term.

But right now, progress looks stalled or even running backwards, after Democrats voted to cover only two-year public institutions, also known as community colleges.

A free tuition plan for community colleges alone, said Craig Lindwarm, vice-president for congressional and governmental affairs at the Association of Public and Land-grant Universities, “would have significant unintended consequences that could be deeply harmful to four-year public institutions”.

“In many ways,” F. King Alexander, president of Louisiana State University, said of Congress, “they kind of hijacked the federal-state partnership so that it’s aimed only at helping public two-year community colleges.”

The battle erupted this past week when the Education Committee of the Democrat-led House of Representatives approved a broad 1,100-page bill updating federal policy all across US higher education.

A key section of the bill would create the long-awaited “federal-state partnership”, offering the promise of free tuition at the nation’s 800-plus community colleges. The 800 or so four-year public institutions were excluded to help hold down costs.

The resulting anger among the four-year colleges presents a roadblock for the higher education bill, an already complicated bid to set policy in a range of areas including student lending, institutional accountability, sexual assault protections, student counselling, prison-based programmes and more.

The dispute also serves as a cautionary tale for politicians, not only in the US but perhaps also in neighbouring Canada, which faces its own challenge of eroding local commitments to higher education funding.

In the US, that has played out most publicly in the ongoing presidential campaign. Democrats led by Elizabeth Warren and Bernie Sanders have promised free college, while others in their party, such as Joe Biden and Pete Buttigieg, have talked of aiding higher education in more modest terms.

In Canada, provinces led by Ontario and Alberta have taken steps to reduce their funding of higher education, just as national election results have left the prime minister, Justin Trudeau, weighing whether to accept a coalition with the New Democratic Party and its promises of substantially greater federal investment in colleges.

Convincing Canada’s federal lawmakers to assume more of the burden from their provincial counterparts seems necessary, if difficult to achieve, said Alex Usher, president of the Toronto-based Higher Education Strategy Associates consultancy.

“The long-term fiscal imbalance between provinces and the federal government is only going to get worse,” Mr Usher wrote in a post-election analysis.

That imbalance has been developing in the US for decades. US states covered some 58 per cent of the costs of higher education in 1975; that share fell steadily to below 35 per cent by 2011 before recovering slightly in recent years, according to the Pell Institute for the Study of Opportunity in Higher Education.

Federal support, meanwhile, has barely risen over that period, generally accounting for 10 per cent to 15 per cent of total college costs in recent decades.

Largely, the drop-off in state support has burdened students and their families, Pell Institute data show. Their share of higher education costs has grown from about 33 per cent in 1981 to more than 50 per cent in the past 10 years or so.

Pell Institute data do reveal a recent trend over the past decade or so in which federal increases in student aid appear to parallel cuts in state support for colleges. Some congressional Republicans have taken such trends as a warning that trying to counter state cuts with more federal dollars would be futile.

However, Thomas Mortenson, a senior scholar at the Pell Institute, cautioned against drawing that conclusion. He said the decline in state support for higher education has been driven largely by heavy pressures on other areas of states’ budgets, especially escalating healthcare costs.

Another leading affordability advocate, James Kvaal, president of the Institute for College Access and Success, said he endorsed the Democratic Party’s support for community colleges as appropriately prioritising the cost pressures facing the neediest students.

Mr Kvaal said he would prefer more investment in affordability and quality at all types of public colleges. But when allocating limited resources, he said, community colleges were a good choice because they serve higher percentages of students from racial minorities despite receiving less state support than four-year institutions and because they struggle with lower graduation rates.

Anthony Carnevale, a research professor and director of the Georgetown University Center on Education and the Workforce, agreed. The first two years of a four-year undergraduate programme is traditional academics aimed at long-term career preparation, Professor Carnevale said. A community college student, by comparison, is usually getting training aimed at securing an initial job, he said.

Because of that difference, Professor Carnevale said, financial aid is more critical to an average community college student. The surprise so far, he said, is that Democrats recognised that fact and were willing to risk alienating more powerful political players who have allegiances to the world of four-year universities. Even more surprising is that the bill makes no attempt to include any private institutions, Professor Carnevale said.

“I think in terms of good public policy, yes, it’s a smart move” to prioritise community colleges, he said. “In terms of good politics, maybe not.”

A lobbyist for community colleges acknowledged the understandable disappointment among four-year institutions. “There are low-income students at four-year colleges, and obviously they could use free tuition, absolutely,” said David Baime, vice-president for government relations at the American Association of Community Colleges.

But Mr Baime rejected Dr Alexander’s suggestion that a free-college guarantee would bring relatively little additional benefit to community colleges given their existing levels of federal support through institution-directed aid and Pell Grants for low-income students.

Citing estimates of the legislation’s impact, Mr Baime said net new federal dollars for community colleges would start at about $1.6 billion (£1.2 billion) in 2021 then grow to more than $16 billion by 2030.

Nevertheless, said Dr Alexander, the failure to include four-year institutions in the bill could ensure its defeat in the Republican-controlled Senate because four-year universities cater for far more students than community colleges, and thus carry a correspondingly stronger potential for political support.

The current House bill is especially dangerous for universities, Dr Alexander said, because it asks states to match the new federal commitment to community colleges without preventing states from getting that money by simply cutting support for four-year campuses.

Without a bill that includes four-year colleges in the proposed federal-state partnership, “I don’t think it is going anywhere in the Senate”, Dr Alexander said.

Professor Carnevale endorsed that assessment, at least for now. The politics of any federal-state partnership for increasing funding of higher education is difficult, even without a fight between two-year and four-year institutions, he said. “Barack Obama tried this and got about two steps outside the Oval Office and it was over, because of opposition in his own party as well as the Republican Party,” Professor Carnevale said.

But eventually, perhaps a few years from now, the need to extend publicly funded education from 12 years to 14 years will become too obvious to reject, Professor Carnevale said. Between the current situation of declining state support, and calls from some Democrats for four years of free college, he said, “it’s the sweet spot of the debate”.

paul.basken@timeshighereducation.com