There's a game of chicken going on between public universities and states across the country over how to fund schools—and students and parents are losing.
In California this week, the University of California's governing board voted in favor of increasing tuition 27.6 percent over five years across the 10-campus system, over the protests of hundreds of students. The idea to raise tuition began as a way for the president of the university system, Janet Napolitano, to pressure Gov. Jerry Brown to hand over more money to head off the increase. Brown failed to offer money from the state budget, and now parents and students will have to foot the bill.
The same story is playing out in many parts of the country. During the recession, many states slashed their funding to public universities, causing schools to raise their tuition levels. Now that the economy has picked up again, states' budgets are healthier. But their funding of schools is still far below their pre-recession levels.
Since the start of the recession, states have cut higher education funding by 23 percent per student, according to the Center on Budget and Policy Priorities, a think tank. As a result, the sticker price at public colleges has risen an average 28 percent above the rate of inflation since the 2007-2008 school year.
California's university system has long been upheld as a model for delivering premier education at affordable prices. But state budget cuts are threatening that reputation.
Starting in 2008 during the recession, California started cutting $1 billion a year in support for the university system. To make up for that loss, the university has raised tuition by roughly 60 percent since then. Things got better in the last two years as the state upped its contribution, which now accounts for $2.8 billion of the university's roughly $7 billion operating budget. Yet that's still $460 million short of 2008 funding levels.
These days, tuition and fees in California's system --$12,192 for residents and $35,000 for out-of-state students-- are higher than the national average of $9,139 a year for in-state students and $22,958 for those attending out of state.
And California is not nearly in the worst shape compared to other public university systems in the country. As you can see below, state funding for Arizona's schools are at nearly half their levels pre-recession. Only two states—Alaska and North Dakota—have increased their funding since 2008.
It was easier for states to explain away massive divestment in higher education when the economy was teetering on the bring of collapse, but as the economy and state budgets recover, albeit slowly, schools are less willing to accept that states can't step up to keep costs down.
The showdown between Napolitano and Brown arrives as the state embarks on a $68 billion high-speed rail project, an issue some board members raised in questioning the government's priorities.
Tuition at University of California campuses has been frozen for the last three years, despite budget cuts and reduced state spending. Napolitano, a former head of Homeland Security and Arizona governor, said the university would need more funding or to raise prices to hire staff and cover rising retirement costs.
"State revenues are just now getting back to pre-recession levels," said Michael Mitchell, a policy analyst at the Center on Budget and Policy Priorities. "There's a tension and a question of are states going to try and reinvest in higher education? Or are they going to continue to have tuition increases supplant what used to be state dollars?"
Supplanting state dollars with tuition increases, he said, is exactly what state policymakers did coming out of this recession and the one in the early 2000s. Forty-two states, nevertheless, have increased funding per student by an average $449 in the last year. Still, the average state is spending $2,026 less per student than before the recession.
To remedy this shortfall, Sen. Tom Harkin (D-Iowa) on Thursday proposed federal matching grants to states that increase funding levels. His plan, part of a broader higher education bill, has been discussed for months as the senate considers re-authorization of the Higher Education Act.
It's uncertain whether Sen. Lamar Alexander (R-Tenn.), who is set to chair the Committee on Health, Education, Labor and Pensions, will take up the issue in the next Congress. He has pegged state divestment in higher education as an outgrowth of higher Medicaid spending brought on by the president’s health care law, and would prefer Washington to get out of the way, not add new mandates.
In the meantime, University of California students are looking to Sacramento, where the legislature will start negotiating the school budget in January. Lt. Gov. Gavin Newsom gave students a glimmer of hope Thursday when he predicted the state would try to boost funding to avoid a tuition increase in the fall.