The Purpose of Public Universities
At the present time, a total of 20.2 million students in America are attending college; 72% of them (14.65 million) attend public universities, and 28% (5.59 million) attend private colleges and universities.¹
Across America, the public university purpose is to provide higher education access to students of limited financial means. This is achieved by using taxpayer funds to subsidize a portion of the actual cost of education so that such students can afford the lower cost of attendance enabled by State subsidies.
In Pennsylvania, as seen in last week’s blog post, the fourteen PASSHE universities have been designated by the State to deliver the “public university purpose” which is, as mandated in Act 188 of 1982, to provide “high quality education at the lowest possible cost to the students.”
None of the other educational institutions in the State, including the four State-related universities, have been given that purpose; it is unique to the 14 PASSHE universities.
As seen previously, the State subsidy at the PASSHE institutions has ranged from a high of 90% in 1950 to a low of 25% today. As a result, the share of the cost paid by the students grew from 10% to 75%.
This drop in the level of State subsidy to “public higher education” in Pennsylvania is part of a larger trend across America in which the average level of State support across the fifty states has been falling steadily by one percent per year for the past twenty-five years.²
Demographics and Economics
Financially speaking, this quarter-century trend toward lower levels of State funding—and the resulting rapid increase in student tuition costs to make up for it—is due primarily to the powerful demographic changes in the country that have frequently been characterized by the term, the “Aging of America.”
Recall that, as of the 2010 U.S. Census, only 30% of households in America had at least one person 18 or younger living there, i.e., someone who could benefit directly from public higher education.
One expects that the remaining 70% of voting households in America who could not benefit directly from public higher education would have had other priorities in mind. Those other priorities become evident when one reviews a chart of how Pennsylvania spent its annual budgets in a recent two-decade period. ³
As the chart clearly shows, Pennsylvania’s elected officials shifted the state’s priorities away from public higher education in a recent 21-year period (between 1990 and 2011) by drastically reducing the share of the Commonwealth’s budget devoted to public higher education from 7% to 3%, a reduction of 57%. At the same time, Corrections increased by 50% (from 2% to 3%) while Medicaid’s share of the budget grew by 167% (from 12% to 32%)! Crime and healthcare are known to be key concerns of an aging population.
But in addition to the demographic pressures from 70% of the households in America no longer being able to benefit directly from public higher education, there was also the powerful financial crisis which hit the country and the World in 2007 and continues to reverberate today as a number of cities, states and even countries are flirting with bankruptcy, and America itself has amassed more than $18 trillion in debt.
While much of
the conversation in recent years has focused on the decline in State funding to
public higher education—and what might be done about it—the relevant data
suggest that a focus on trying to reverse the decline is State funding is a battle
that has already been fought and lost. For fundamental demographic and economic reasons
alone, that loss is not likely to be reversed anytime soon, if ever.
A Dilemma
Consider these facts regarding the quality of the PASSHE educational experience over its first 30 years:
1) State
funding to PASSHE trended lower during PASSHE’s entire first 30 years of existence
(1984-2013);
2) The
quality of the PASSHE educational experience increased by 29% between
1984 and 2002; and
3) The quality
of the PASSHE educational experience decreased by 14% between 2002 and
2013.
All three of these facts may be confirmed by referencing the attached chart⁴ of official PASSHE data. And while something obviously changed in 2002, history shows that neither the downward trend in State funding nor the provisions of Act 188 were changed, either then or now.
A reading of the chart in question reveals that the only thing that changed since 2002—resulting in the loss of half the quality gains of the previous 19 years—was the way that the PASSHE Board of Governors began to make decisions regarding implementation of Act 188, not one word of which had changed.
The chart shows that for PASSHE’s first 19 years, the BOG used the authority granted to it by Act 188 to raise tuition sufficiently to make up for the loss of State funding. For the following eleven years, the BOG raised tuition insufficiently to make up for the loss of State funding, allowing educational quality to suffer.
It was during this 11-year period, from 2002 to 2013, that the Board of Governors adopted a policy of maintaining the “lowest possible tuition” (the sticker price), when in fact Act 188 clearly mandates the “lowest possible cost to the students” (the bottom line).
Because of decisions by the Board of Governors since 2002 that were contrary to the specific mandate of Act 188, the quality of PASSHE’s educational experience was reduced by half while, at the same time, the PASSHE education was not being provided at anything like the “lowest possible cost to the students.”
In fact, compared with students at “All Institutions” across America—where 72% of all college students attend public universities—their financial aid packages consist on average of 51% grants and 42% loans, while at PASSHE universities, the financial aid packages on average consist of 27% grants and 65% loans.⁵
To be continued.
² http://www.sheeo.org/sites/default/files/project-files/SHEF%20FY%202014-20150410.pdf.
³ https://www.keepandshare.com/doc/6716812/privatization-without-a-plan-chart-10-and-caption-November-24-2013-pdf-415k.
⁴ https://www.keepandshare.com/doc/6794551/privatization-without-a-plan-chart-9-and-caption-january-23-2014-pdf-387k.
⁵ https://www.keepandshare.com/doc/6802256/privatization-without-a-plan-chart-20-and-caption-january-29-2014-pdf-390k.
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