Higher education, lower funding

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U.S. college tuition rates have skyrocketed over the last two decades, and Minnesota has not bucked the trend. No one knows this better than Jennifer Weil.

Weil, a student and working mother of two, is about to graduate from Minnesota State University Moorhead, approximately $40,000 in debt. Testifying before members of a House division Feb. 3, she said the loans she took out to pay for school were a necessary investment in her future, but she regrets the price tag.

“Looking forward, I know that I’m not going to be able to purchase a home for my family and have a yard for my kids to play in very soon,” Weil said. “It’s going to take a lot of years.”

Weil is not alone. According to the University of Minnesota’s Office of Institutional Research, undergraduate resident tuition at the university’s Twin Cities campus increased by nearly 400 percent over the last 20 years, with the Crookston, Duluth and Morris campuses all faring similarly. Schools in the 54-campus Minnesota State Colleges and Universities system remain a less expensive option, but the overall trend is the same, often forcing students to take out tens of thousands of dollars in loans to get their degrees.

This year, Weil and other debt-saddled students probably have little to look forward to in the way of relief. With the state facing a projected deficit of at least $4.8 billion, another round of budget cuts to higher education appears likely. In his budget proposal, Gov. Tim Pawlenty called for a reduction of nearly 11 percent to the state’s higher education funding, with a cut of approximately $151 million to the University of Minnesota and $146 million to MnSCU.

This plan mirrors similar cuts that were made during the state’s last major budget crisis in 2003, the net result of which was four consecutive years of double-digit tuition rate increases at the state’s public colleges and universities.

“Students are still paying the price today for the cuts that were made in 2003,” Weil said. She added that the additional burden has come at a time when student debt “has become a problem for nearly every student in our system.”

Capping tuition

To protect students from similar increases this time, the governor has called for the Legislature to cap tuition increases at an inflationary rate; however, college administrators and many lawmakers don’t like the idea.

“A freeze on tuition would be absolutely devastating,” University of Minnesota President Bob Bruininks said at a Jan. 22 hearing. Although he hopes to minimize any tuition increases, Bruininks said he and other university officials need to have all options on the table.

“I’m making a plea to you as we go through some really tough times together … I’m hoping that you’ll give us the kind of flexibility that we need to manage these changes in the most creative fashion,” he said.

Another critic of the tuition cap proposal is Rep. Tom Rukavina (DFL-Virginia), chairman of the House Higher Education and Workforce Development Finance and Policy Division. Rukavina said a tuition cap would basically guarantee staff and faculty layoffs. Aside from putting people out of work, he said this would also damage the quality of education students receive.

“I don’t think at this time, when people are getting laid off, losing their jobs and having to go back for retraining, that it’s wise to be cutting our higher education institutions,” Rukavina said.

Even some students are skeptical of the tuition cap idea. Alex Tenenbaum, a student legislative advocate for the University of Minnesota, testified at a Jan. 27 division meeting that although he would love to see tuition increases capped, he worries about what students would be giving up in return.

“There’s a lot of great programs, and if we’re going to be putting a cap and cutting funding, then we’re going to have to cut a lot of programs that mean a lot to people. We’re going to have to get rid of a lot of faculty,” he said.

The root problem

The reasons behind the state’s ever-rising college tuition rates are complex; to boil it down to basics, the costs associated with running a higher education institution have increased dramatically while state funding has essentially failed to keep pace, forcing colleges to make up the difference by putting a greater share of the financial burden on the students.

The fact that students are paying more doesn’t necessarily mean they’re getting more for their money, however. A report released in January by the Delta Project on Postsecondary Education Costs, Productivity and Accountability found that despite the inflated price tag on higher education, spending on actual classroom instruction decreased slightly throughout the United States between 2002 and 2006.

This begs the question of what is driving up the actual cost of higher education. Research points to everything from expanded student services to higher building operation costs; however, the largest factor, by far, appears to be personnel.

According to a 2006 issue paper from the U.S. Department of Education, 75 percent of college costs on average are taken up by faculty and staff salaries and benefits. In Minnesota, this has led to some questions about how colleges and universities are spending their money.

Cindy Phillips, a business professor and president of the faculty association at MSU Moorhead, said at the Feb. 3 hearing that MnSCU’s central administrative office was soaking up an increased amount of state funding at the same time campuses are being forced to make cutbacks. She said that if cuts were ultimately necessary, lawmakers should look at reprioritizing funds away from administration and toward actual classroom instruction.

“We would ask that when you make those cuts, you protect our core functions: the teaching and the learning — and that occurs on the campuses,” Phillips said.

College officials deny that administrative costs are the problem. Laura King, vice chancellor and chief financial officer for MnSCU, said at a Jan. 29 hearing that MnSCU ranks 46th in the nation for administrative spending on a per-student basis. Still, some lawmakers are skeptical. Rep. Bud Nornes (R-Fergus Falls), the lead Republican on higher education issues, said he’d like to see more data.

“I would like to see some kind of graph or a chart that indicates how has everything else been going up, for example: salaries, contracts and other fixed costs,” he said. “Have we just kind of fattened the system, so that it has to operate at that level? Or, ‘you raise more money or you have to lay off a lot of people?’”

Rukavina’s division has held a series of meetings in recent weeks to hear student and faculty reaction to the governor’s higher education budget proposals. He too said he would like to see more openness and information provided by MnSCU and the university on how they spend their money; however, he also said the short-term solution to higher education funding lies in a broader discussion about how to solve the state’s budget deficit.

“The way to fix this whole budget deficit is for the governor to come clean and say, ‘We can’t do this with just cuts.’ We have to raise some revenue, and when we raise some revenue, we can be a little more fair to higher education,” Rukavina said.

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