Overspending and financial mismanagement, not state disinvestment, has caused tuition increases.
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CounterCurrent:
The Myth of State Disinvestment
Overspending and financial mismanagement, not state disinvestment, has caused tuition increases.
CounterCurrent is the National Association of Scholars’ weekly newsletter, bringing you the biggest issues in academia and our responses to them.
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Category: College Finances, Cost of College; Reading Time: ~5 minutes
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** Featured Article: State Disinvestment Is Still a Myth ([link removed])
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The COVID-19 pandemic caused great stress in American colleges and universities. Schools had to spend immense capital to comply with state and federal regulations and allow for the safe attendance and teaching of students. All the while, many students chose to defer matriculation or higher education entirely. In the background of all this turmoil is a declining population from which to enroll students and, so we are told, declining state investment in higher education.
Andrew Gillen, Minding the Campus contributor and senior policy analyst at the Texas Public Policy Foundation, debunks the myth of state disinvestment in this week’s featured article ([link removed]) .
We’ve heard for many years that states are disinvesting in colleges and universities to focus on other priorities (similar claims have been made about public education as well). This, we are told ([link removed]) , has led to ever-higher tuition rates, fewer courses, larger classes, and missed opportunities for students—all of which strains university finances.
Thankfully, Gillen enjoys dissecting these arguments (someone’s gotta do it, right?). He reports that state funding ebbs and flows alongside the business cycle: state funding of higher education boomed in the years before the Great Recession and crashed after. But in the long run, funding bounced back and, overall, is much higher than in decades prior. This even applies to states that are often whipped for disinvestment, such as West Virginia. State funding, he finds, has increased by $22 to $59 per student per year since 1980.
A recent Wall Street Journal report ([link removed]) adds some important context. While many states did decrease funding for flagship universities—a “reallocation of funding among [states’] colleges and universities,” says Gillen—none except for the University of Idaho tightened its belt alongside the tightening of state finances and lower tuition. Instead, schools increased spending by “38% between 2002 and 2022.” This rise in spending coincided with a 64% tuition increase for each student, or, as the Journal states:
For every $1 lost in state support at those universities over the two decades, the median school increased tuition and fee revenue by nearly $2.40, more than covering the cuts […].
For many years now, the National Association of Scholars has argued for the financial reform of colleges and universities. These reforms would ensure that schools have skin in the game: if students didn’t graduate or acquire jobs after graduation that could pay for tuition debt, schools would be on the hook to pay back some of that debt. During the 2020 recession, NAS encouraged Congress to add such reforms to the COVID relief packages that eventually gave $76.2 billion to higher education ([link removed]) .
So, with all this information in front of us, it becomes quite clear that “state disinvestment is a myth,” as Gillen argues. Now we are left with the question: Why does the myth persist?
Gillen is kinder to the perpetrators of this myth than I am. He notes three reasons why it persists: confirmation bias, the fact that states do occasionally cut funding following the business cycle, and a failure to adjust for inflation. I’ll add special interests to the mix of reasons why “smart people” might lie about state disinvestment.
Any bystander can see that American colleges and universities are in need of severe reform. These institutions have proven unworthy of the public trust bestowed on them by essentially flushing taxpayer dollars down the drain, all while demanding more from governments and driving students and their families into debt they can ill afford. It is time to put a stop to it.
If you are curious about what such higher ed reform might look like, I encourage you to read our reports and recommendations in Priced Out: What College Costs America ([link removed]) , Freedom to Learn ([link removed]) , and Critical Care ([link removed]) .
Until next week.
Chance Layton
Director of Communications
National Association of Scholars
Read the Article ([link removed])
For more on admissions, racial preferences, and issues in higher education:
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February 24, 2021
** Priced Out: What College Costs America ([link removed])
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Neetu Arnold
Priced Out details the spending habits of 50 universities across America and provides perspective from students, parents, and college administrators.
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January 9, 2021
** Freedom to Learn ([link removed])
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National Association of Scholars
Freedom to Learn provides a guideline of 40 detailed suggestions for legislative reforms. These initiatives, if enacted by Congress, would encourage reform of America's costly, politicized, and dysfunctional system of higher education.
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April 18, 2020
** Critical Care ([link removed])
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National Association of Scholars
Critical Care is a plan to guide the federal response to the unprecedented disruptions facing higher education during the pandemic.
** About the NAS
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The National Association of Scholars, founded in 1987, emboldens reasoned scholarship and propels civil debate. We’re the leading organization of scholars and citizens committed to higher education as the catalyst of American freedom.
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