The Costs of Cutting Higher Ed

Student unrest in England took a dramatic turn last week when angry protesters attacked a car carrying Prince Charles and his wife, and set fires outside the House of Commons. They took to the streets after Parliament approved Prime Minister David Cameron’s plan to allow British public universities to nearly triple their tuition, from about $5,300 per year to $14,000.The plan also calls for funding of courses in the humanities and social sciences to be slashed by 40 percent, as part of efforts to cut government spending by $130 billion.

Could these protests be a portent of similar events in the United States? To be sure, American students have been dealing with increased college costs much longer than in Britain, where public colleges were free until recently. But the higher education landscape is changing quickly here, too.

Since the recession began, nearly every state has dramatically reduced funding for public higher education, by as much as 25 percent in some cases, resulting in painful tuition hikes. President Obama and Congress have increased federal aid for low-income students, but other programs that serve low-income and middle-class students — such as Perkins Loans, Academic Competitiveness Grants, and SMART Grants — are scheduled to expire soon.

Now, with states facing continued distress and a national political mood focused on cost-cutting, further proposals to reduce student aid, cut research spending, and raise public college tuition are on the horizon. For example, Obama’s deficit commission recently proposed eliminating subsidized student loans, in which the government covers interest payments while students are in college. Meanwhile, most states have run out of federal stimulus funds to support their higher education systems, making more faculty layoffs and tuition increases extremely likely.

It doesn’t have to be this way. Our leaders are right to be concerned about closing immense budget gaps, just as Cameron is in Britain. When it comes to higher education, however, they should consider whether the short-term benefits of limiting government support are contrary to the long-term interests of the nation.

It’s no overstatement to say that higher education — and government support of its mission — has contributed substantially to our nation’s preeminence. After World War II, the GI Bill enabled millions of veterans to earn college degrees and build the American middle class. In following decades, states enlarged their university systems and established community colleges, expanding access to millions more. Today, government research support is helping universities pioneer new discoveries and incubate new industries that will speed our economic recovery.

As China, India, and Latin America challenge our economic supremacy, federal and state governments should be doing more, not less, to support higher education’s vital role. Indeed, the countries with the fastest-growing economies in the world are all investing heavily in their higher education systems. Instead of reversing course, US leaders should be redoubling their commitment to the strategies that have fostered our nation’s long-term prosperity.

One country that has emerged as a higher education powerhouse is Australia. Asserting that higher education should be at the center of their response to the global financial crisis, Australian leaders approved a substantial higher education investment package last year. It commits billions to improving public university infrastructure, and reforms the country’s student aid system to target funds to the neediest students. It also increases research funding and encourages research collaborations between colleges and industry partners.

At the same time, it’s not a blank check. It establishes a “demand-driven’’ funding system for public university campuses – meaning that future funding will depend on their ability to offer an education students find valuable. Moreover, the investments are tied to ambitious growth targets for raising college enrollment and completion rates over the next 15 years, setting the stage for economic progress over the long haul.

As US leaders consider how to fund public higher education in coming months, they might do well to contrast Britain’s approach with Australia’s. Increasing public investment at a time of scarcity won’t be easy, and it may require the higher education sector to be open to new ways of doing business. But instead of filling the streets with protesters, it’s more likely to fill them with college graduates who will contribute to our nation’s success for years to come.


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