What free state college tuition might look like if a state faces a budget crisis
Posted August 4, 2016
The raw politics of state university tuition and funding are coming into focus in Illinois, whose pension-driven budget woes have percolated for years.
Southern Illinois University now faces dramatic budget cuts, just the latest Illinois school under fire. In June, the Higher Learning Commission formally put Chicago State University on notice for accreditation risk, based on the budget impasse.
The budget struggles in the Land of Lincoln highlight the challenges faced by state universities that rely heavily on state funds. For such schools, simple economic downturns — or, in the case of Illinois, long-term fiscal malfeasance by the state — can suddenly disrupt students' lives.
"The toll is tarnishing other schools’ standing on Wall Street," Bloomberg reports. "On June 30, the same day (Illinois Gov. Bruce) Rauner enacted the budget, Moody’s cut Eastern Illinois, Governors State and Northeastern Illinois universities, all of which have junk ratings. It also downgraded debt issued by Southern, Illinois State and Northern Illinois. All six — as well as the University of Illinois — have negative outlooks from Moody’s, indicating more cuts may follow."
Bloomberg also reports that many entering freshman are registering at adjacent state schools, which then get the benefit of being able to charge lucrative out-of-state tuition.
After initially mocking Bernie Sanders for a similar proposal, Hillary Clinton shifted this summer to offer her own version of a "free college tuition" plan, this one offering free tuition for students whose families earn up to $120,000.
She plans to pay for this by taxing the wealthy and pressuring states to do more. As NPR notes, public state colleges and universities collected $58 billion in tuition in 2014. The federal government spent $31 billion during that period in grants and work study.
Somehow a free tuition plan would have to find nearly twice the current federal outlays, through some combination of federal spending and arm twisting of state governments. But those states are already shifting the cost of spiraling education costs onto students. As the College Board notes, tuition and fees at four-year state schools have climbed 40 percent in the past 10 years.
And as both the Illinois case and the 2009 budget crises illustrate, sometimes you really can't require that they spend more than they are. Campaign promises aside, the math will remain a vexing challenge.