This week marks the beginning of the semester for most colleges in New York State. As students begin their next collegiate experience, families tackle how to pay for it.
American higher education has seen a dramatic shift in who pays for public college. America was once a society that valued college education and put its collective money where its mouth is by funding the bulk of the cost of that education.
But since the 1980s, there has been a shift in the burden of paying for public college from government to the families of those in college. The clearest evidence of that shift has been the reduction state dollars going to public colleges and the dramatic increase in tuition over the last three decades.
While state funding for the State University of New York (SUNY) has remained largely flat over the last few years, the total cost to maintain SUNY’s and the City University of New York’s existing services has increased by nearly $200 million. The state made up the difference using hikes in public college tuition. Stagnant state support coupled with rising tuition has had an impact: Prior to the 2008 recession, tuition covered about half of SUNY’s budget. Now, tuition covers more than 60% of SUNY’s budget.
These tuition increases are the result of a so-called “rational tuition” policy. New York’s law, described by proponents as “rational,” hiked public college tuition each year for five years. The only thing rational about it is that it guarantees increases in the cost of attending a public college. As a result, New York families are paying more – and in some cases adding to an increasing college debt load.
Nationwide, student loan debt is currently over $1 trillion and it is estimated to be $2 trillion by 2025. At New York’s four University Centers 56% of graduates carry debt averaging over $22,000. Studies show that students burdened with student loan debt are less likely to start a business or own a home. This can create a ripple effect where current debt hamstrings future wealth growth—the effect is even greater for low-income students and students of color.
A college-educated workforce is in demand. A Georgetown University study found that, by 2018, nearly two-thirds of New York jobs would require a post-secondary education. Yet, 2013 Census data shows that less than half of New York adults hold an associate's or bachelor's degree. Tuition increases outpacing income growth, paired with decreased state investment, have eroded college affordability.
But the New York model is not the only way.
Other states are enacting another form of “rational tuition” – they are either freezing tuition rates, or cutting the cost of attending public colleges and universities.
A growing number of states are trying to rein in the price students and their families pay to attend public colleges and universities. Tuition rose sharply during the Great Recession after states cut higher education funding. Now student loan debt is topping $1 trillion nationally, and even upper-income families are worried about rising college costs. As a result, legislatures are under pressure to bring prices down.
In July, the state of Washington enacted a new law that cut in-state tuition. The state of Minnesota passed legislation that freezes tuition at two-year colleges this fall and will cut tuition next year. The state of Ohio froze in-state tuition for two- and four-year institutions. Wisconsin froze in-state tuition across the 26 campuses in its university system. The University of Maine System kept tuition flat for the fourth year in a row.
New York’s law, described as “rational,” hiked public college tuition. At the end of the Spring, 2016, New York’s law will expire. The debate on what to do about that law is heating up. What is the best way for New York to define rational from a student’s perspective – rationally jacking up tuition or rationally keeping it at the same rate? This year’s college students will soon know.
Blair Horner is the Legislative Director of the New York Public Interest Research Group.
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