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Higher Ed News Roundup

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The below are some of the non-Washington State higher education budget and policy stories that made the news this week:

  • Arizona: Senate Bill 1115 was passed out of Appropriations Committee after midnight on Tuesday. The hastily considered bill surprised many and would effect dramatic change in Arizona higher education should it make its way to law, including replacing the current state funding to institutions with a voucher system that would provide an as yet unspecified amount of money directly to the student, abolishing the Arizona Board of Regents and creating individual governing boards at each institution, and allowing for the addition of more state institutions, including making ASU’s East Mesa campus a freestanding Polytechnic University. Committee chair and bill sponsor, Andy Biggs, said, “I’m trying to get at greater autonomy and greater stability and flexibility to the university heads by having their own boards of trustees.” The universities oppose this measure.
  • Georgia: Budget pressures in Georgia make deep cuts and eligibility changes to the innovative HOPE Scholarship program likely. The current program is the most generous state financial aid program in the nation as it has no income caps and provides the full cost of an undergraduate degree at any public institution in Georgia for all students with a 3.0 or above high school gpa. Over one third of all resident students currently enrolled in Georgia public institutions benefit from the program.
  • Ohio: Inside Higher Ed pondered the role politics played in the resignation of University System of Ohio Chancellor Eric Fingerhut more than a year before his term was up.
  • Wisconsin: The revelation that Governor Walker was set to propose increased autonomy for UW Madison led to some fallout with the UW System Regents who support increased flexibility, but are troubled by the idea of separating UW Madison from the system. A special Regents meeting to discuss the proposal was called for today. In response, UW Madison produced a summary of the proposal and its anticipated effects to help quell opposition.

Also note that NYT reporter David Leonhardt published an interview with the authors of the recent book Why Does College Cost So Much?. We were pretty honored that Leonhardt recommended our summary of the book in the introduction of the piece!

University of Wisconsin Poised to Receive Greater Autonomy?

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Current protests in Wisconsin have dominated press coverage of Governor Scott Walker’s proposed 2011-13 state budget this week. Lost in the shuffle may have been news that the proposal contained a provision that would lead to greater autonomy for Wisconsin’s largest public institution of higher education, the University of Wisconsin at Madison. UW Madison Chancellor Biddy Martin has requested that the UW System Board of Regents not oppose the move, which she argues would be essential to protecting excellence and access for the state’s flagship campus.

Potential legislation based on the Governor’s proposal is expected to be introduced by Republicans and would be likely to include the following freedoms for UW Madison:

  • Tuition setting authority and freedom to manage all funds
  • Authority to implement institutional budget without System approval
  • Ability to recruit, hire and retain employees outside of the state system
  • New flexibility in purchasing
  • Authority to handle its own building projects

The University has sought such freedoms from the state for years, and the article suggests that the chancellor has been working for over a year to craft the current proposal, which she calls the New Badger Partnership.

For more information about this topic, read our recent OPB brief on institutional autonomy and the varying degrees to which it currently exists at the UW Seattle and our Global Challenge State peers.

Federal Budget Proposals Affect Higher Education

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The UW Office of Federal Relations has posted detailed summaries of how recent federal budget proposals may affect higher education. As the House Republicans propose major spending cuts for FY 2011 that target Pell grants and funding for federal agencies that support academic research, President Obama has released a FY 2012 proposal that largely protects financial aid and research and development.

Visit Federal Relations often for updates on federal budget negotiations.

Americans Struggling Economically, Worried about Affordable Higher Ed

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That Americans are concerned about the rising price of higher education is not news. However, Public Agenda’s newly released survey results, Slip-Sliding Away: An Anxious Public Talks About Today’s Economy and the American Dream, shed some new light on how the continuing economic crisis may have heightened those concerns. The telephone survey was administered to a representative sample of 1,004 individuals. Among the results:

  • Respondents were most likely (75+%) to say that people with no college degree, working families, and small business owners were struggling ‘a lot’ (compared to ‘a little’ or ‘not at all’) in this economy, whereas only about half of respondents felt that college graduates were struggling a lot in this economy.  Meanwhile, 40% of respondents reported that they themselves were struggling a lot, and, notably, only 10% of respondents felt that those who work on Wall Street were struggling a lot.
  • More than half of respondents (51%) reported that they are very worried about being able to pay for college education for their children, and 27% reported being somewhat worried about being able to afford higher education for their children.
  • When  asked how effective particular policy options might be in helping Americans who are struggling financially, making higher education more affordable received the highest positive response (63%). Also ranking highly (above 50%) were preserving social security and medicare, and expanding job training programs.
  • Respondents reported that Governments and individuals are about equally responsible for helping those Americans who are struggling economically.

Given the dominant news coverage focusing on private institutions with the highest sticker prices, it is important to note that 75% of students enrolled in higher education attend public institutions, which carries a much lower net cost of attendance than private institutions.  For previous OPBlog posts and briefs on this topic and, in particular, the UW’s financial aid and funding issues, see:

Are the States Alright?

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You may have read a widely circulated New York Times article today concerning the possibility of the federal government creating a pathway for states to seek protection in federal bankruptcy court if their debt burdens spiral out of control. Some policymakers think that the severe economic strain created by the Great Recession has revealed deep structural problems in state budgets that may be unfixable without intervention.

However, in Misunderstandings Regarding State Debt, Pensions, and Retiree Health Costs Created Unnecessary Alarm, the Center on Budget and Policy Priorities puts current state budget woes in historical perspective, and emphasizes that, while the near-term future for state budgets across the country remains grim, we must exercise caution in conflating the short term problems caused by the recent recession with the very long term structural issues associated with revenue systems and pension plans.

Supreme Court Decision on Medical Residents Upholds Status Quo

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As reported by Inside Higher Ed and many others, the Supreme Court decided this week that medical residents do not qualify for student payroll tax exemptions and must pay into social security and medicare as other employees do.

This ruling upholds U.S. Department of Treasury regulations issued in 2004, which the UW has been in compliance with since. Had the ruling gone the other way, medical residents across the country would have been reimbursed for taxes collected since 2005, and their institutions would have been able to cease collection in the future.

Another Budget Blow to Public Higher Ed in CA

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Today, newly elected California Governor Jerry Brown released his first proposed state budget. The 2011-12 budget proposes over $12.5 billion in spending cuts and over $12 billion in new revenue generation to close an existing deficit of over $25 billion.

Cuts include 10 percent pay reductions for state workers, cuts to Medi-Cal and Welfare, and, notably, deep cuts to higher education only months after the Legislature approved a 2010-11 budget that restored some previously cut funding for public institutions.

Specifically, the budget proposes cutting the UC system by $500 million (17%), the CSU system by $500 million (18%), and community colleges by $400 million (6.5%).

UC President Mark Yudof notes that, if enacted, this budget would mean the state’s annual contribution per student would be less than the portion paid by students and their families for the first time in California’s history. We crossed this same threshold in Washington State for the first time in 2009.

WA Higher Education Task Force Report Released

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Last summer, Governor Gregoire created a Higher Education Task force, comprising both public and private leaders, and charged them with proposing a new funding strategy for public higher education, as well as new ideas for increasing institutional accountability. The Task Force released its report yesterday, January 3rd, recommending three major reforms to higher education policy in Washington State.

First, the group suggested that tuition setting authority be given to the universities to help make up for budget cuts from the legislature. Based on their proposal, the institutions would use a formula to determine appropriate tuition rates, taking into account state appropriations, tuition at peer institutions, and enrollment levels.

Second, the Task Force proposed the creation of a Washington Pledge Scholarship Program, which would be funded by private donors. They hope the fund would reach $ 1 billion by the end of the decade. Corporations would receive a tax credit for donating, although that benefit would not kick in until overall tax revenue returned to 2008 levels.

Third, they recommended that the state give cash incentives to universities that meet certain degree production targets. In addition, they encourage universities to make plans to reach retention goals set forth by the state.

Finally, the Task Force listed other money-saving strategies, such as including more online introductory-level classes, developing three-year degrees, giving more credit for college-level work done in high school and at other institutions, and eliminating underused degree programs.

Make sure to check the State Relations blog for a round-up of some of the local press coverage relating to this report.