Budget

Higher Education in the Age of Obama

During a seemingly endless presidential campaign, President-elect Obama offered a compelling higher education platform. Now, however, on the eve of the new Obama administration, it is clear that politics and finances will require the new president to scale back his plans for higher education and just about everything else.

What the moment demands, is that colleges and universities join together across their traditional divisions -- public and private, two-year and four-year, high-endowment and low-endowment, sectarian and non-sectarian and all sorts of demographic variations -- to suggest and advance the priorities with the potential to help shape the president-elect’s agenda.

The Obama higher education platform focused on five critical issues: access, affordability, research, economic development, and international competitiveness. His agenda included -- among other initiatives -- grants for technology-based economic development through community colleges; doubled funds for basic research, especially energy-related research; support for expanding historically black colleges and for enhancing distance learning; the establishment of tax credits to make college more affordable; and expansion of access through TRIO and Gear-Up, as well as community colleges. He asked for funding to produce teachers, promote service, and retrain the unemployed.

A number of pressures will now require the new president to rethink this array of important proposals because he won’t have the resources to carry out this agenda. First, discretionary dollars will be eaten up by the $800 billion bailout, additional federal funding for economic relief, the continuing cost of the Iraq war, and declines in tax revenues.

Second, support for education has diminished as a priority for the American people. During the 2000 presidential election, Americans ranked education either first or second among the nation’s priorities. In 2004, it fell to fifth. In 2008, it dropped off the priority list.

Third, the primary citizen advocates for increased education funding have shifted their focus to health care. Baby Boomers, who constituted more than half of the electorate until this election, single-handedly made education a priority because they wanted good schools for their children. Today, with most of their kids graduated or largely through school, Boomers are now focused on aging and frail parents, who are absorbing an increasing share of their time and resources.

The sheer size of the Baby Boom generation ensures that every politician running for any office, from dogcatcher to president of the United States, quickly develops a platform that emphasizes Boomers’ interests. As a result, elder care, health insurance and Social Security have become the new priority -- and will likely continue to overshadow education in the years ahead., since the first Boomers reached retirement age this year.

So, given these constraints, what Obama initiatives could make the greatest difference for higher education and for a nation that depends on its colleges and universities? To maintain the vitality of the nation’s colleges and universities, what one or two greatest priorities can our institutions agree upon and work most effectively for?

  • College affordability. Among all the Obama higher education goals, affordability is likely to have the highest priority and the greatest likelihood of Congressional support. This is primarily a middle-class issue, and middle-class and more affluent populations have the highest voting rates. Moreover, the cost of college is rising more quickly than their resources: Today, fewer than 4 percent of Americans can afford to pay the sticker price for four years of college. Affordability, therefore, already has a Washington constituency. Because this issue will persist, colleges and universities should make it a centerpiece of their program for Washington action.
  • College access. While access remains critically important in public discourse, funding is unlikely to match the expressed concern. The populations most underrepresented in higher education historically have the lowest voting rates, though there appears to have been an increase in the 2008 election. As an issue, however, access increasingly has not only a moral and rhetorical basis, but also an economic power. In a knowledge-based economy, a college education is the prerequisite to gainful employment. Traditionally underrepresented populations constitute the nation’s fastest-growing pool of intellectual resource and human capital, and that should make it possible to seek support for access initiatives -- particularly with colleges and universities leading the way. Low-cost initiatives, such as simplifying federal financial aid, are likeliest to be adopted.
  • Research. The greatest funding increases for higher education may occur for applied research and development areas rather than basic research. For instance, research budgets are likely to expand owing to federal energy initiatives. This means that while the future depends upon adequate funding for basic research, universities might be more successful in working to obtain resources in high priority areas like energy.and green initiatives.

In this environment, colleges and universities will face new constraints -- rising demands by the federal government for accountability, cost controls and pressure on state governments to assume greater responsibility for higher education support.

  • Financial accountability. Concerns about college affordability will lead Washington to pressure colleges and universities not only to control tuition and expand financial aid, but also to demonstrate accountability. It is wiser for institutions to take the lead in this area or they are likely to face growing efforts in Washington to regulate higher education. For instance, given the bad odor that deregulation has acquired in the for-profit sector, some watchdogs may press to extend controls to not-for-profits. Arguments have already been made that colleges, as well as other not-for-profits, should adopt governance approaches that reflect a Sarbanes-Oxley regimen of audit controls. In the years ahead, there could also be efforts to impose health care-like price controls on higher education through federal financial aid programs. As a first step, institutions of higher education need to become more transparent on policy, practices and compelling rationales on issues such as tuition pricing, need-based and merit based financial aid, endowment use, and graduation rates and standards for which they are being criticized and are vulnerable. Without foot dragging, reports should be issued annually on these subjects. Topics such as tenure, teaching loads and the place of undergraduate education in the university need to be better explained and understood by higher education’s publics.
  • Cost controls. Colleges and universities will have to reject the practice of cost-plus pricing, determining expenditures first and then charging the tuition necessary to cover them, analogous to a family setting their desired annual expenses and then determining how much they need to earn, in order to control costs at the very moment when demand for financial aid is rising and fundraising is becoming more difficult. Historically, America’s colleges and universities have grown by adding new programs to existing programs rather than substituting. Presidents have often talked about their desire to reverse this approach. The years ahead will not only provide an opportunity to prune and substitute, but will make it essential.
  • A shift toward state funding. Higher education can expect reduced federal funding, both in real dollars and in programs deemed nonessential to the public. States, already facing significant deficits, will be asked by the federal government to take greater responsibility for higher education funding.

These are some tall orders and tough conditions, and pressures to accommodate them are inevitable. Colleges and universities will need to document and make explicit what is and is not possible. With fewer resources, higher education cannot be expected to take on major new initiatives imposed by Washington. The degree to which institutions of higher education can be expected to respond to diminished federal support will vary dramatically across different types of institutions. All institutions cannot be expected to share the burden equally.

Finally, even if money is not available in Washington, the higher education community more than ever must remind the media and the public of the importance of higher education to our children’s futures, economic development, global competition, maintenance of a democratic society, and national defense. Colleges and universities have a crucial social, intellectual, and economic role to play.

In this new administration, colleges and universities will be unable to sit back and hope for the best, when the bailout dust settles. Instead, our institutions must together seize the moment to determine which priorities and what kinds of support are most essential. The name of the game in the years ahead may simply be preserving what higher education has. That, in itself, will be no small challenge.

Author/s: 
Arthur Levine
Author's email: 
info@insidehighered.com

Arthur Levine is president of the Woodrow Wilson National Fellowship Foundation in Princeton, New Jersey, and president emeritus of Teachers College, Columbia University.

Seeking Money for Universities, Not Students

I’m sure that the 51 presidents, chancellors, regents, and heads of university associations who signed an open letter to President-elect Obama believe that their request for a share of the expected federal stimulus package is in the country’s best interests. Although I personally cringe at what I view as self-serving pleas, I am confident that they believe in what they are doing.

At the same time, it might be helpful to look at just how narrow a vision guides this request and why satisfying the plea is unlikely to achieve the noble goals that the letter alludes to.

Specifically, the signatories, convened by the Carnegie Corporation of New York, are asking the federal government to spend $40-45 billion in the form of capital investment -- direct expenditures on “shovel-ready” construction projects, mostly at public universities. The federal funds would be distributed to the states on the basis of population and would be channeled through governors, bypassing state legislatures.

Their request is wrapped in rather elevated rhetoric that stresses several things: the need to create hundreds of thousands of jobs, the need to have a strong university system, and the fact that the nation is “losing ground” as measured by a number of educational indicators. The letter invokes historic events such as the Morrill Act, the National Academy of Sciences, and the GI Bill as precedents.

Let’s look at this proposal more closely.

Why did these educators choose capital funding -- that is, constructing “essential classroom and research buildings and equipping them with the latest technologies”? Wouldn’t tuition discounts, tax credits, more scholarships, or even faculty salaries be more directly related to the problems that they decry? After all, they justify the request on the grounds that the United States is slipping against other countries in the percentage of the population with higher education degrees; that minorities have poor graduation rates; and that college tuitions have been rising nearly three times as fast as median family income.

Short-term capital investment funds are not likely to do much for these problems. In fact, better internal cost control, not new money, is probably the best way to resolve them, a point The Wall Street Journal made editorially last month.

The reason the group pushed for bricks-and-mortar spending is undoubtedly pragmatic. Construction jobs are a time-honored feature of economic stimulus and “back-to-work” programs. The jobs are visible and they appear fairly quickly (although they also end fast). Public construction projects (sometimes known as pork-barrel projects) are also a time-worn feature of state politics, with political rewards for those who support such projects. That may have been a consideration.

For their part, the educators contend that focusing on capital projects “avoids the unnecessary entanglement of the federal government in the processes of the states and the governance of public universities.” There is something to that -- you don’t need a federal bureaucracy to prove that a building has been built.

But one does not have to be cynical to note that funding capital projects might also keep the Obama administration from interfering with “the governance of public universities.” The higher education establishment has had enough of that from the Bush administration’s secretary of education, Margaret Spellings. This time around, just give money for buildings, please.

What the administrators don’t acknowledge is that there’s a reason why the states are shelving these “shovel-ready” projects. Yes, the states are underfunded and governors all over the country are halting university projects. They are doing so because tax payments have dried up. People are out of work and businesses are shutting down, and taxpayers can no longer afford the lavish investment in state buildings that seemed so easy a year or two ago.

By asking the taxpayers to rev up those projects, the administrators are essentially saying that if state taxpayers can’t afford a project, some mythical “federal taxpayer” can.

But state and federal taxpayers are, by and large, the same people. If Arizona is seeing its tax revenues dip, chances are that the federal government will see its taxes go down, too. If the people of Arizona are hurting, probably taxpayers countrywide are hurting, too.

Surely, the well-educated intellectual leaders who wrote the letter recognize this symmetry. My guess is that most of these leaders would not have dared to make their plea except for one thing: The money is there.

Right or wrong, Congress committed the taxpayers to a giant package of expenditures. The $700-billion package was adopted to preserve a shaky credit system that was approaching crisis. Very quickly, however, what wasn’t spent began to be viewed as “stimulus” money, available for the taking by those with political clout.

When there are $100 bills lying on a table, someone picks them up. The Carnegie-led administrators, who have a high opinion of their mission and their stewardship of it, want to be in the room when the cash is doled out. They feel that the university system (especially the public system) is as deserving as any potential bailout recipient. I understand their views. But let’s accept that this is about pork-barrel politics. It’s not about helping the kids.

Author/s: 
Jane S. Shaw
Author's email: 
newsroom@insidehighered.com

Jane S. Shaw is president of the John W. Pope Center for Higher Education Policy in Raleigh, N.C.

A Cutting Budget

Smart Title: 
President wants to eliminate many education programs -- and community colleges are particularly hard hit.

Rhetoric and Reality

Smart Title: 

For much of the last year, community colleges and the Bush administration have, symbolically, been dancing cheek to cheek. Given what's in the Bush administration's 2006 budget proposal, they may spend the next few months fighting toe to toe.

Collision Course on the U.S. Budget

Smart Title: 
House and Senate budget resolutions set differing directions, promising a showdown that could affect education programs.

Pinching Pennies on Research

Smart Title: 
The Bush budget plan would provide small increases for the NIH and NSF, while cutting spending on other programs.

Movement in the Senate

Smart Title: 
A flurry of activity suggests Congress may make progress on extending the Higher Education Act after all.

Assessing College 'Access and Accountability'

Smart Title: 

The numbers are bleak and -- for anyone who cares about the vibrancy of the American economy or the importance of an educated citizenry -- deeply worrisome: the United States has fallen to 17th in the world in high school graduation rates and 7th in college-going rates, and is the only industrialized country whose rates are falling.

And perhaps most troubling of all, the rates are lowest among those segments of the American populace that are growing the fastest.

Disappointing Budget Blueprint

Smart Title: 
Compromise adopted by Congress contains little of what colleges want.

Bush vs. Bankers

Smart Title: 

There is no such thing as an offhanded comment from a White House spokesman.

So when Trent Duffy, in explaining Friday that President Bush would seek to bolster the Pell Grant program in part by reducing the subsidies paid to lenders in the student-loan program, called the subsidies "excessive" and described the loan industry as "very profitable," the political winds surrounding the student-loan programs continued to shift.

Pages

Subscribe to RSS - Budget
Back to Top