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Ensuring That States Support Higher Ed

Ensuring That States Support Higher Ed

July 18, 2008

As summer reaches its mid-point, selected high ranking U.S. House and Senate members continue to work on finalizing massive legislation to renew the Higher Education Act, which has already gone through seven extensions this year. One of the few primary issues still being debated is the “State Commitment to Affordable College Education Amendment,” commonly known as the “Maintenance of Effort” provision. The provision seeks to hold states accountable for maintaining certain levels of tax support for higher education, and I believe it is essential for the future of public higher education.

The maintenance of effort provision, which was advanced by Rep. George Miller of California, Rep. John Tierney of Massachusetts and supported by members of both parties on the U.S. House Committee on Education and Labor, is premised on the fact that the most significant factor impacting the rapidly rising cost of college education for nearly 80 percent of the higher education population has been the relentless decline in commitment on the part of most state governments to maintain requisite levels of public funding. The result of this long-term decreasing commitment has been that in many states, as state appropriations have dwindled, public university tuition and fees have skyrocketed. This trend has effectively shifted the burden of funding higher education from the general public to the student.

What Representatives Miller, Tierney and other bipartisan members of the House Education and Labor Committee have figured out is that billions in new student aid dollars will have little effect on the expansion of educational opportunity if state legislatures continue to consistently reduce their fiscal commitment to higher education. Essentially, MOE is a first step in holding states accountable for retaining given levels of appropriations for their own students. The perversity of the present system is that as state legislatures lower their fiscal effort or do not provide adequate support for increasing student populations, tuitions and fees subsequently rise, and as a result most federal student aid programs are tapped at higher levels further indebting ever more students and with greater average debt.

Many state officials have become savvy about the process. In fact, I was told by a very high ranking member of the state legislature in Kentucky a couple of years ago that he did not need to provide additional tax support for public universities since the institutions themselves had the ability to increase their own student tuition and acquire the funds through the federal tuition-based aid programs. This “supplanting” of state support with federal tuition-based program support occurs more readily when state economies are bad or simply when legislators, by whim or fancy, refuse to provide the appropriate levels of public tax support, knowing full well that public universities will in response raise student tuition and fees to provide essential funds.

As a consequence, additional fiscal burdens are placed directly on students and indirectly on the federal government to offset what states fail to provide. This has been a pattern over the last three decades as increases in state legislative appropriations have been unreliable and state institutions are sent scrambling for needed revenues. The maintenance of effort provision has the potential to place pressure, through the secretary of education, to better stabilize state appropriations by means of federal disincentives through the use of Leveraging Educational Assistance Program funds and other programs, or incentives when new federal funds are made available in the future.

Supporters of the MOE provision include the American Association of State Colleges and Universities, which represents the majority of public universities nationwide, and numerous national student organizations. Opposition to the inclusion of the MOE Amendment is spearheaded by the National Governors Association and Council of State Governments, who have the obvious interest in seeing that billions in funding should continue to flow freely without strings. This no-strings approach is, of course, extremely attractive to states that continue to reduce their commitment to public higher education by shifting the financial responsibility away from themselves.

Strong opposition also resonates from the “states’ rights” element that insists that the federal government should not have such fiscal leverage over states. Leading this charge is Sen. Lamar Alexander of Tennessee, who as U.S. secretary of education favored the elimination of the Department of Education and represents a state that is constantly last, or near last, among the 50 states in its tax effort to support public education at virtually all levels.

Legislators, such as Senator Alexander, who argue that states should receive federal funding without a corresponding fiscal commitment to higher education actually perceive that this anti-state tax effort strategy is good public policy. Unfortunately, in this system, the students are the ultimate losers as college affordability declines and federal direct student aid dollars are increasingly rendered less effective.

Many opponents of this amendment also insist that the MOE provision is precedent setting and represents a new dimension of federal encroachment in state sovereignty. In fact, concerns about the federal government holding states fiscally accountable is not new and has been a staple of education and welfare legislation for many decades. In 1965 the Elementary and Secondary Education Act carried with it a maintenance of effort provision that forbade states to supplant their own funding with federal dollars. Over the last four decades, these supplanting provisions have been upheld and enforced by federal courts on numerous occasions. Medicaid, and other federal funding measures operate in similar fashion making it difficult for state legislatures to cut funding without federal fiscal consequences.

In summary, maintenance of effort is an essential component for ensuring that states are held accountable for their funding of higher education. This amendment, if used effectively by blending both fiscal disincentives and incentives, will make states think twice before cutting higher education appropriations and should have an attendant effect of better stabilizing state higher education finding. The true winners will be, of course, the students, but in the broader context the spillover beneficiaries from state fiscal stabilization and enhancements to higher education will be the entire social and economic system.

Bio

F. King Alexander is president of California State University at Long Beach.

 

 

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