US universities want Biden to strike new funding pact with states

Struggling US public colleges are pushing to remind federal policymakers that they need long-term funding stability, beyond the student-centric approaches that so far have dominated political debates.

Universities that serve lower-income students are chief among those cheering the growing momentum for initiatives such as doubling the value of the Pell Grant, the main federal subsidy for low-income students.

But an overemphasis on student-directed aid – without reviving the traditional primary funding role of the states – may leave both institutions and the government struggling to fill insurmountable gaps, advocates and analysts have warned.

In the decade following the 2008 recession, US states reduced their spending on higher education by $7 billion (£5 billion), or about 13 per cent, according to the Center on Budget and Policy Priorities.

When states face almost any kind of budget crisis, “it’s always been sort of the first thing to get cut”, said Jessica Wood, head of the education sector at S&P Global Ratings.

The presidential campaign over the past year put heavy attention on college affordability. The debate, however, was largely confined to the question of covering tuition fees during the first two years of university, in part through substantial increases in the Pell.

In that environment, affordability experts have struggled to revive the idea of directly tying federal support for higher education to some level of matching funds on the state level.

Those that have been pushing that concept for years include the American Association of State Colleges and Universities (AASCU), whose 400 public institutions tend to serve lower-income students.

“This is one of AASCU’s top priorities,” said Luis Maldonado, the association’s vice-president for government relations.

Such models of shared funding already exist in federal-state relations, including in higher education. But experts regarded the college-oriented programmes as far too limited, given the extent of the decline in state support. Years of partisan gridlock, however, have left little room for serious discussion of expansion.

Past AASCU analyses have suggested a programme in which the federal government offers about $10 billion a year on a sliding scale that could give states as much as 60 cents for each additional dollar they allocate to higher education.

There’s likely interest in such ideas within the Biden administration and among federal lawmakers, Mr Maldonado said. But a chief obstacle in the months ahead, he said, is the press of other business.

Among states, meanwhile, the variety of responses to the coronavirus pandemic suggests that higher education is headed toward ever-widening divisions between those with resources and those without.

Congress so far during the pandemic has provided higher education with less than $40 billion in relief, or about a fifth of the $183 billion that US colleges and universities believe Covid has cost them.

Institutions and their students are awaiting another $40 billion from a $1.9 trillion nationwide relief bill slowly making its way through Congress.

While waiting, state governments have cobbled together another $2 billion in aid for their colleges and universities, according to a tally by the National Conference of State Legislatures. Much of that, however, was assembled in just a handful of states, while others face the prospect of their public institutions culling programmes and raising fees.

“The situation is so different state by state,” Ms Wood said. “With the pandemic, we’re definitely seeing that that divide has continued to increase.”

paul.basken@timeshighereducation.com