Nice to Have Company, But...

April, 2016

Washington -- It's nice to see a like-minded author write on higher education finance in a prominent Capitol Hill publication. Ingrid Schroeder, director of fiscal federalism initiatives at the Pew Charitable Trusts, makes a strong case for a better understanding of how higher education funding streams interact in her article "Footing the Bill for Higher Education." An excerpt:

Both states and the federal government contribute significant funding to higher education — similar to transportation, K-12 education and other policy areas. However, higher education is unlike these other areas, where there are generally federal-state funding matches or states are required to maintain a certain funding level to receive federal dollars. In higher education, states can, for the most part, cut spending without a loss of federal support.

But it's disappointing, so far, that those in Congress with committee jurisdiction over higher education have yet to put forth changes to the Higher Education Act that reflect an understanding of these increasingly painful realities of fiscal federalism. Although the federal government continues to pour billions into higher education, states and institutions have been reducing their support in the very area -- college affordability -- where the federal government has been increasing its spending. One result is student loan debt that now exceeds $1.3 trillion nationwide and is a drag on the economy, not to mention how student loan debt gone wrong is taking a devastating toll on millions of individuals and families.

Instead of using the tools of fiscal federalism to keep federal, state, and institutional funding streams in balance, Congress over the years has been killing off or strangling the programs in the Higher Education Act that contain matching and maintenance of effort provisions. It's not as if the federal fiscal effort needs huge increases; what it desperately needs is re-balancing among the various spending and tax expenditure programs to draw the states and the institutions back into "cooperative federalism."

To the credit of several past and present presidential candidates of both parties, their proposals for higher education affordability acknowledge the role that states and institutions must play. Where is the Congress?