Finding new money for higher ed is hard, but without a bump, there could be ‘hell to pay’

Lawmakers and higher education leaders traded blows this week as they tussled for answers to Pennsylvania’s nation-leading student debt load.

The average Pennsylvanian has $37,000 of student debt, according to a 2019 report by The Institute for College Access and Success, a Washington D.C.-based think tank focused on “affordability, accountability, and equity in higher education.”

That’s the second highest in the country, behind only Connecticut. Altogether, a little more than two-thirds of Pennsylvanians have student loan debt. 

The confrontation came during back-to-back budget hearings Tuesday for Pennsylvania State System of Higher Education as well as the four partially-public universities, including Penn State University. 

Facing questions on tuition increases and high costs, higher education leaders fired back that fixing the problem was simple: give them more state funding.

The state system, made up of 14 taxpayer-funded universities spread across the commonwealth, will receive $490.4 million in state funding this year. That’s a 2.7 percent increase, or nearly $13 million, more than last year’s $477.5 million budget.

Meanwhile, the University of Pittsburgh, Temple, Lincoln and Penn State universities were all flat-funded.

The state system’s funding boost will go to an ongoing redesign aimed at cutting overhead costs with a new IT system. 

The system has been in the political crosshairs of late due to sagging enrollment, rising tuition and overall poor performance. Activists and the union representing public faculty have blamed low funding levels, among the worst in the nation following deep cuts a decade ago. 

State System Chancellor Daniel Greenstein agreed with Republicans on the House Appropriations Committee that savings could come by cutting costs, pointing to the ongoing system redesign.

But Greenstein also laid out some back-of-the book math pushing for more public funding for the state system.

If the 14-school system matched its revenues to costs, and put every dollar it saved into tuition reduction, then tuition would go down 8 percent — roughly $617 per student each year, of PASSHE’s typical in-state tuition of $7,716.

If the state instead funded the system at the average national level for higher education funding, then tuition would decrease by 22 percent, or $1,697.

With more state aid and lower tuition, Greenstein said, the state schools would look more like a bargain and attract low-income students, instead of looking like a slightly less expensive alternative for middle class students.

“Universities are taking the maximum amount of money they can get from every single student, which means affordable pathways are lost in the state of Pennsylvania,” he said.

The problem of cost also comes up among the state-related universities, which will receive almost $600 million in state funding to augment private dollars.

Penn State, Pitt and Temple all have some of the highest in-state tuition among public schools in America, according to U.S. News and World Report.

But while lawmakers questioned the high cost of those schools, the state-related institutions retorted that their price tag was a result of quality.

“The reason why Penn State, despite the fact that it has relatively high tuition … had 132,000 people apply to come to Penn State last year is because they are attracted to quality,” Penn State President Eric Barron said.

Penn State’s $18,450 annual in-state tuition is actually third-highest among the state-relateds. Both Pitt and Temple charge more, according to U.S. News and World Report.

But a large pool of applicants was cold comfort to lawmakers such as Rep. Sheryl Delozier, R-Cumberland, who peppered PASSHE and Penn State alike with questions on college affordability.

“If we go back to the taxpayer and ask them for more money to pay into whatever our priorities might be,” such as more money for higher education, “what’s the difference between doing that and asking them for a higher tuition bill?” Delozier told the Capital-Star after the hearings.

“You’re asking that taxpayer for money one way or another.”

In response to Greenstein’s numbers, she added that there are cost-saving measures that can happen at any school. She also pointed out that new dollars for higher ed would mean less dollars for anything from senior care to infrastructure, excluding a tax increase.

Tough choices around funding have dominated budget talks for the last decade. 

But Ken Mash, president of the Association of Pennsylvania State College & University Faculties, told the Capital-Star that if lawmakers continue to delay action on student debt, “there’s going to be a day when the chickens come home to roost.”

Leading a union representing 5,000 faculty and coaches at the PASSHE schools, Mash said that as millennial policymakers gain power, he expects debt reduction will be on their agenda. 

Democrats have proposed two plans. In his budget address, Wolf called for a $200 million grant program for state system students who stay in Pennsylvania after they graduate. 

The money could come from a fund that subsidizes horse racing, fed by a slot machine assessment. Republicans are skeptical.

Democrats also have a broader plan, known as the PA Promise, which would provide tuition free college degrees for students from families that make $110,000 or less. Estimated to cost $1 billion a year, it would be paid for by an increase in income, capital gains and corporate taxes, plus a tax on natural gas drilling.

But despite the plans, Mash predicted that once millennial lawmakers take over, they won’t care where the money is going to come from, as long as they can fix the issue.

“I think that there’s going to be hell to pay at some point,” Mash said, “when people become of age and start to settle down and realize how badly they’ve been messed up.”