If President Obama has his way, the money that colleges receive from Washington will soon go to schools that can lower their tuition or at least hold it steady.
That may be a problem for Connecticut’s 17 public colleges, which have almost doubled tuition and fees over the last decade and have already approved tuition increases for the next school year that exceed the rate of inflation.
Private colleges would also be affected by the president’s plan. Under the current formula for federal student aid, schools with the highest tuition — like Yale University and Trinity College — receive the most money because the federal government is trying to fill the shortfall between what students can afford and their tuition costs.
“We are putting colleges on notice — you can’t keep — you can’t assume that you’ll just jack up tuition every single year. If you can’t stop tuition from going up, then the funding you get from taxpayers each year will go down,” Obama said Friday at the University of Michigan, where tuition and fees have increased by 14.5 percent over the past four years.
The three federal grants that would be affected by the White House initiative — Perkins, Work Study and Supplemental Educational Opportunity — funnel $40 million to Connecticut’s public and private colleges each year to help pay for school for 31,300 students. And if the state doesn’t live up to the Obama administration’s “affordability and value standards,” which will be set in the next few months, much more money could be lost to schools down the road.
Obama is hoping to get congressional approval to increase federal student aid from $3 billion to $10 billion.
Robert A. Kennedy, president of the state’s 100,000-student college system, is confident his colleges will not lose federal dollars and will be eligible for this new pot of money.
“We don’t need to fear that we are one of those institutions that has increased tuition too rapidly. … Our increases have been modest,” he said of the average 5 percent annual increase at the community colleges and Connecticut State Universities over the past five years.
Officials from the University of Connecticut, who last month approved a plan to increase tuition by almost 30 percent over the next four years, were unavailable for an interview Friday. However, in an emailed statement, UConn President Susan Herbst said she thinks the school, which now costs $10,400 in tuition and fees for in-state students a year, is affordable.
Some of the indicators U.S. Education Secretary Arne Duncan said his department will be looking at to determine if a college is affordable include the average amount of debt students leave with, how frequently students default on their loans, what the graduation rate is and the number of low-income students attending the school.
In Connecticut, the default rate varies significantly among the institutions. The average amount of debt students leave college with is $25,360, which is 25 percent more than five years ago, according to the Project on Student Debt.
But overall, Duncan said during a conference call with reporters, one of the best indicators is if tuition increases exceed the rate of inflation.
“We don’t think that’s affordable,” he said.
Using the Consumer Price Index, Gov. Dannel P. Malloy’s budget office sets inflation at 1.9 percent for the next fiscal year.
UConn approved a 6 percent increase next year for in-state students, Connecticut State Universities, 3.8 and the community colleges, 3.1 percent.
Private colleges have also raised tuition. Yale’s tuition, room and board increased 5.8 percent this year, to $52,700. Trinity raised its tuition by about 3.8 percent last year and by about the same amount this year. Quinnipiac’s tuition last year was $34,250 and $36,130 this year.
Leveling tuition while states cut funding
When Obama called on university officials to hold the line on tuition, the immediate reaction from many was to point out that most states have slashed their support of higher education.
“Anything that smacks of price controls is a great concern on many levels, especially at a time when states are cutting their budgets,” Molly Corbett Broad, of the American Council on Education, a national group representing college presidents, told The New York Times.
Connecticut has cut funding to its colleges more than nearly every other state, according to the Center for the Study of Education Policy at Illinois State University. And on Tuesday, Malloy made additional emergency budget cuts in a number of areas, including an additional $5.4 million in reductions to the state’s colleges.
“State funding is decreasing and for us to maintain the status quo we had to increase tuition,” Kennedy said. But he added that despite the additional decreases announced this week — which follow an earlier 10 percent reduction to CSU this year — the 3.8 percent hike that’s already been approved will likely go no higher, he said.
Susan Herbst, UConn’s president, wrote in the emailed statement Friday that budget cuts are making it difficult not to increase tuition.
“Universities are facing a tight squeeze between declining support and the need to maintain and enhance the quality of the education we offer,” she wrote.
Herbst noted that the increase in costs at UConn are linked to her promise to add 300 new faculty members in the next four years. As a result, she said, courses will be added so students will be better able to meet their requirements and graduate on time. “Remaining an undergrad for even one additional semester beyond four years substantially adds to the overall cost of a college education,” she wrote.
Just 60 percent of UConn students graduate in four years, according to the U.S. Department of Education.
Malloy said during a call with reporters from an economic summit in Switzerland that he is confident that even with the state cuts and tuition increases, the state will not lose federal money.
“I think Connecticut colleges are affordable,” he said. He pointed to his recent initiative to cut the number of university administrators. “We are making it more affordable,” he said.
Duncan said that even a bleak budget picture is no excuse for states to cut funding.
“It is a make or break moment for the middle class,” he said. “States need to do their part to prioritize college funding… It’s a shared responsibility, everyone has to step up.”
In his speech Friday, Obama also said he would institute a new “Race to the Top” program that would disburse $1 billion to colleges and universities that institute reforms like redesigning courses, making better use of technology and reorganizing how they spend money.
Kennedy said the Regents plan to aggressively go after this money.
“We have to do better,” he said of the ever-increasing costs of education.