Washington, D.C. — A new competitive grant program could rein in the cost of public colleges and universities, according to an analysis released today by the Center for American Progress. The analysis, titled “Public College Quality Compact for Students and Taxpayers” explores the effects of state disinvestment on public colleges and universities and proposes a plan to jumpstart investment for the next generation of students.
“College students have come to be viewed as a source of revenue to balance state budgets,” said David A. Bergeron, Vice President for Postsecondary Education at the Center for American Progress. “It is time to put investment in students at the front of the line for new investments.”
As state governments have faced tight budget constraints over the past decade, public institutions have become increasingly dependent on student tuition revenues rather than public investments. The increases in tuition revenue were financed with federal student loans—student borrowing has more than doubled over the past decade. In total, students attending public universities, colleges, and career training centers borrowed $19.6 billion during the 2002-03 school year; that amount rose to $48.5 billion by the 2011-12 school year.
In this context, higher-education experts David Bergeron and Elizabeth Baylor put forward a plan in to jumpstart reinvestment in public colleges and universities that harnesses the purchasing power of the federal government to incentivize state action.
Building off of President Barack Obama’s efforts to bring the cost of postsecondary education under control, Baylor and Bergeron propose a new a competitive grant program that, when matched with state funds, would significantly lower the cost of public postsecondary education and, in some cases, make it free. The program would ensure that students from the neediest families have a commitment that public postsecondary education will be affordable through a combination of Pell Grants, state funds, and federal matching grants for low-income students who enroll in college preparatory high school programs.
Under the competitive grant program, the federal government would provide funds to states that dedicate them to higher education and agree to implement key reforms that ensure students have access to affordable and high-quality public institutions. States that participate in the program would commit to keeping tuition increases to a minimum and in line with the rate of inflation. The federal investment would include a dedicated, multiyear revenue stream to promote continuity of these reforms. Federal resources used to lower the costs for students enrolled at public institutions would supplement the existing Pell Grant program, which would itself remain intact.
In order to be eligible for a federal matching grant, states must agree to implement reforms and innovations that increase the value of public colleges, universities, and training centers for students. The compact will require states to:
- Promise students from low-income families that public postsecondary education will be affordable
- Develop a plan for creating sustainable funding streams for public institutions
- Implement strategies that have proven successful in improving performance
- Eliminate state and institutional policies that stand in the way of college completion
“A new federal matching grant program is the best hope for restoring the federal, state, and institutional partnership that has long worked to keep college prices down for low- and middle-income families,” Bergeron said.
To speak with experts on this issue, please contact Madeline Meth at [email protected] or 202.741.6277.
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