The best news about Obama’s victory is that we will avoid repeating some major policy mistakes of the past. He won’t bring back private lenders to make the student-debt crisis worse. He won’t cut Pell Grants for low-income students. He won’t slash federal funds for research. He won’t further deregulate the for-profit sector. He won’t eliminate tuition tax credits. He won’t systematically deepen the austerity policies that have been wrecking state-college budgets and forcing tuition up.
Mitt Romney would have done most of those things. Romney’s defeat means that public higher education has avoided another round of rapid decline like that set in motion by the financial meltdown of 2008.
But Obama has no plans to deal with the root problem facing the country’s public colleges: They simply no longer have enough money to offer world-class quality.
Obama’s campaign literature says, “President Obama has a plan to out-educate the world.” But the plan consists of increases in Pell Grants and tuition tax credits, plus some limited additional funds for vocational training at community colleges.
Those measures may sustain but will not expand access to the world’s most expensive higher-education system. They will add no new resources to the public colleges themselves. Obama has so far offered nothing for his second term that would restore the country’s previous leadership in overall quality or quantity of college degrees.
Public colleges will not win the resources to climb out of their hole unless they have a sense of desperate urgency about how deep their hole actually is. Here’s a brief reminder. Public colleges and universities educate three-fourths of all college students, including a very high percentage of students who come from the lower three-fourths of the income distribution, who as Tom Mortenson has shown are exactly the students who have been largely bypassed by the country’s (mediocre) overall gains in educational attainment over the past 30 years.
And yet, as the economists Robert B. Archibald and David H. Feldman reported in their book Why Does College Cost So Much?, public-college expenditures had already fallen from 70 cents on the private-college dollar in 1980 to 53 cents by the mid-1990s.
Since then, things have gotten worse. The State Higher Education Executive Officers finds that while public-college students’ net real tuition has doubled over the past 25 years, reduced state financing means that overall expenditures per student today are back where they were at the end of the Reagan presidency.
In the major public systems of states like California, Michigan, and Washington, the damage has been much worse than the averages suggest. At the University of Washington, tuition has tripled while state per-student investment plunged to one-third of its 1990 level. At the University of California, the state’s real-dollar investment per student has fallen from $17,200 in 1991 to $6,100 next year. Even as real-dollar tuition has increased by a factor of seven, overall expenditures per student are down 25 percent.
American higher education has always been stratified, but we have now produced the kind of expenditure inequality that would have been outlawed by the Brown v. Board of Education decision, which outlawed segregation, were it based explicitly on race. The Delta Cost Project found that two-year public colleges educate six times as many students as attend private research universities at about one-quarter the cost—and with far lower graduation rates.
Within public university systems, a similar pattern holds. My review of campus budgets in Michigan showed that the Flint campus, which spent about half as much as the Ann Arbor flagship through tuition and state funds combined, had half the graduate rate of the Ann Arbor campus—for an enrollment with nearly five times the rate of low-income students. Unequal financing between private and public colleges and within the public-university systems is the major reason the United States has fallen to 16th in international comparisons of bachelor’s-degree attainment.
Some observers suggest that California’s passage of Proposition 30 may start the reversal of that trend. Gov. Jerry Brown is one of them: “We have a vote of the people, I think [we’re] the only state in the country that says let’s raise our taxes, for our kids, for our schools, and for our California dream.”
But Proposition 30 merely avoided another round of cuts at all levels of education. Had it failed, the University of California would have lost 10 percent more of its share of state general funds, on top of Jerry Brown’s 25-percent cut in 2011-12, which came on top of Arnold Schwarzenegger’s 25-percent cut in 2010-11. The president of the community-college system reflected the somber mood when he said, “We are guardedly optimistic that we’re beginning to find a bottom here in California.” This is hardly a recipe for recovery.
This week, the UC Regents are considering where Proposition 30’s win will lead concretely. The most likely formula is “6+6″—that is, 6-percent increases in state financing coupled with 6-percent annual increases in tuition each year. That means next year’s budget will return one-fifth of last year’s $750-million cut. Political and academic leadership seem to have accepted the bizarre principle that, with the public sector, it is OK to cut massively but rebuild slowly. No private firm would buy an insurance policy that paid 20-percent restitution for major damage with the rest contingent on future co-payments and the alignment of various political stars. Why is this all right for public colleges?
Judged in themselves, the Democratic victories on November 6 don’t signal a turnaround for American public colleges. The Obama administration will stabilize grant and loan financing while pressuring public colleges to suppress tuition. Without new lobbying and protest, Obama will not help public colleges recover public-revenue streams. And yet without massive new investment, we will see more privatization of higher education, but at a level of quality below that of the fully public version. With a gradual ramp-up like the one on offer in California, our national systems will in a few years get to where the global competition was 10 years ago, while the competition has moved down the road.
The emergency cuts should not be backfilled gradually, over many years, while the rest of the world leaps ahead. Our principle must be: When the emergency is over, immediately reverse the emergency cuts. To use the University of California as an example, the 2013-14 budget should be reset at 100 percent of the 2010-11 budget, the year before the last massive Brown cut.
Those full reversals would have an important stimulus effect on their regional economies and can be defended on economic grounds. But the deeper issue is that neither efficiency nor improvement is possible for public colleges until they get the budgetary respect that they deserve.