Monday, March 9, 2015

The Relationship Between PASSHE and PASCU - Part 2


We began last time with “A Brief History¹ of the Fourteen PASSHE Universities,” and concluded with a partial list of relevant definitions needed to understand the relationship between PASSHE and PASCU:
Definitions (continued)

Privatization Without a Plan:  The rapid defunding of public higher education by the State in the absence of an effective plan to preserve and deliver the Act 188 statutory purpose: ‘High quality education at the lowest possible cost to the students’—despite the ongoing loss of State funding.  See Privatization Without a Plan² by Angelo Armenti, Jr., Ph.D., to see why only PASCU, the Pennsylvania Association of State Colleges & Universities can save the 14 universities from policy-induced financial death spirals.
 
Privatization Without Representation:  The rapid defunding of public higher education by the State (the Minority Financial Stakeholder), which shifts the cost of education to the Students, Parents and private donors, primarily alumni (the Majority Financial Stakeholders), while the State retains 100% control of PASSHE’s governance seats where all key decisions affecting all stakeholders are made.
 
PASCU:  The Pennsylvania Association of State Colleges and Universities (PASCU) is a nonpartisan, non-profit organization founded in June of 2012.

PASCU’s Mission:  To ensure that the statutory purpose of public higher education in Pennsylvania as specified by Act 188 of 1982: “High Quality Education at the Lowest Possible Cost to the Students,” is indefinitely preserved and faithfully delivered.
Declining Public Support for Public Higher Education:  When public higher education first began in America in the mid-nineteenth century, it was seen as “a public good” that benefitted everyone and was therefore worthy of public, i.e., taxpayer, financial support.  The low tuition levels that this public policy allowed made public higher education accessible to virtually all students, even those from less than affluent families.  Even as late as 1950, State appropriation in Pennsylvania still provided some 90% of the cost of public higher education while tuition revenue provided just 10%.  But by 1983, the respective funding shares had changed to 63% from State appropriation and 37% from student tuition.  By 1992, the State share of public higher education funding fell below 50%, and by 2013, the respective funding shares had sprinted to 25% from the State and 75% from the students, parents and alumni donors.
 
From Public Good to Private Good: Today’s respective funding shares of public higher education in Pennsylvania (with State appropriation providing 25%) suggest that public higher education is now seen as “a private good” that benefits the student much more than the State, thereby justifying the 75% - 25% split in funding shares, with the students, parents and alumni donors paying the much larger share.
 
Majority Rule in a Democratic Republic:  In a democratic republic like America, majority rule plays a dominant role in deciding all public policy questions.  And the seismic shift in funding patterns in the 65 years between 1950 and 2015 is readily explainable in terms of the demographic changes that occurred in America during that period.  In the 1950 census, the percentage of households with at least one person 18 or younger living there was 57%.  At that time, a majority of voting households in America could still benefit directly from public higher education and, as a result, elected officials from both political parties provided substantial funding to public higher education to fulfill voter expectations. 
 
By 2010, the percentage of households with at least one person age 18 or younger living there had fallen to 34%; by the 2010 census, it had fallen to 30%.  By 2010, 70% of the households in America could no longer benefit directly from public higher education—and, very likely, the citizens in those households almost certainly didn’t want their taxes raised to send someone else’s son or daughter to college.
 
No doubt sensing this enormous change in public sentiment on the part of their constituents, elected officials from both parties, with responsibility for State budget decisions, changed the State’s funding priorities to match the wishes of the majority of their constituents—precisely as designed and expected by America’s founders in creating our democratic republic.
 
The “new demographics,” with fewer young people in most households, is often described as “the aging of America.”  Pennsylvania’s spending decisions in a recent 20-year period show, as one would expect with an aging population, that public higher education funding plummeted and only two budget categories grew: Corrections (prisons) and Medicaid, i.e., areas dealing with crime and health care.³  
 
The Pennsylvania State System of Higher Education (PASSHE)

The two greatest changes to the 14-University PASSHE system in its first thirty years of existence, from FY 1984 to FY 2013, involved a 58% increase in FTE Student Enrollment (from 71,091 to 112,180), along with a 50% decrease in State funding per FTE Student (from $7,386 to $3,679) in constant (2013) dollars.
 
The 50% decrease in State dollars per FTE Student was accompanied by a 127% increase (from $4,347 to $9,864) in the private dollars paid per FTE Student via tuition and fees, in constant (2013) dollars. 
 
These two conflicting trends⁴ create dilemmas for PASSHE Universities and PASSHE students—more and more students to educate and fewer and fewer State dollars with which to educate them.  This makes it difficult for the Universities to deliver the statutory purpose of ‘High quality education,’ and also makes it difficult for families to pay for that education which is not at ‘the lowest possible cost to the students.’
 
At the same time, PASSHE’s resident undergraduate tuition grew by 94% (from $3,318 to $6,428) in constant 2013 dollars, putting great pressure on students to pay their tuition and fees.  The average annual tuition increase (in constant dollars) comes to 2.31% per year, compounded over 30 years.    

During the course of those 30 years, the State share of PASSHE’s budget fell from 63% to 25%, while the share paid by the students, parents and donors, primarily alumni, grew from 37% to 75%.
 
To be continued.
 
¹ https://www.keepandshare.com/doc/7509814/a-brief-history-of-the-14-passhe-universities-march-8-2015-pdf-185k.
² http://www.amazon.com/Privatization-Without-Plan-Leadership-Pennsylvania/dp/1491295244/ref=sr_1_1?ie=UTF8&qid=1408368767&sr=8-1&keywords=angelo+armenti.
³ https://www.keepandshare.com/doc/6716812/privatization-without-a-plan-chart-10-and-caption-november-24-2013-pdf-415k.
https://www.keepandshare.com/doc/6726973/privatization-without-a-plan-chart-8-december-3-2013-382k.

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