Federation of Illinois Independent Colleges and Universities

Aid to Private Colleges on States Chopping Blocks (Tretter quotes)

Released: 3/9/2009

Article from the Chronicle of Higher Education includes comments from David Tretter re: the HSEGA program.

Government & Politics
From the issue dated March 13, 2009
Aid to Private Colleges Goes on States' Chopping Blocks

By MEGAN ECKSTEIN

Many private colleges are worried that, as their states' fiscal situations decline, they will be among the first victims of budget cuts. In some states, they already are.

Most states allocate some money for private higher education. Forty-five states last year provided a total of more than $2-billion for programs that give student aid to state residents at in-state private institutions, according to the State Higher Education Executive Officers, which represents states' top higher-education officials. Fifteen states gave a total of $295-million in direct aid to private institutions, which have come to rely on the money to cushion their student-aid and operating budgets. This year the funds have become even more important to many institutions as they face shrinking endowments and worry about maintaining enrollment.

But as states are forced to make cuts to balance their budgets, legislators and governors can find it more politically palatable to slash aid to independent colleges than funds for public colleges, whose missions are tied more closely to meeting state needs.

In Ohio, for instance, Gov. Ted Strickland, a Democrat, proposed a budget for the 2010 fiscal year that calls for freezing tuition at public four-year institutions for one year and keeping rates at the same level at community colleges for two years. But his budget also recommended changes in the way state student aid is distributed that would nearly halve the amount of money available for students at private colleges.

In Wisconsin many private-college leaders feared that their students, too, would face cuts in state aid, but the students' public-college counterparts came to their defense. The United Council of UW Students, which includes representatives from the 17 campuses of the University of Wisconsin, joined in endorsing a letter to the governor asking that the money the public institutions were slated to receive for capital projects instead be funneled to tuition assistance for state residents who attend in-state public, private, or technical institutions.

Administrators of the private and technical colleges agreed that because students and their families were struggling to pay for college and to keep their homes, assisting them was more important than building new facilities.

Varied Patterns of Spending

State aid to private-college students has increased since 2001, but funds that states give directly to private institutions have shrunk, even though the number of states doling out such aid has increased.

Paul E. Lingenfelter, president of the State Higher Education Executive Officers, said college administrators shouldn't worry too much about the stagnating level of state support for private higher education. Such aid has been given out for as long as 40 years in some states and isn't likely to go away anytime soon.

"In a tight budgetary year, you may not see [total spending] go up," he said. "It may erode a little, but you certainly won't see it cut" altogether.

States' spending patterns on private higher education vary because private colleges play different roles in different states, Mr. Lingenfelter said. Where independent colleges have long played a strong role, enrolling large numbers of in-state students — as in the Mid-Atlantic — states tend to provide more consistent financial support for private institutions, he said.

Many people object to private colleges' receiving state money, arguing that public funds should not be spent on institutions with religious affiliations or on places that charge high tuition, especially when public universities face significant budget cuts. But private-college leaders say they often serve just as diverse a student body, and in some cases a more diverse one, as their public counterparts do, and that they help states supplement their educational options and accommodate growing demand for college.

Surprised at the Cuts

In Ohio, Governor Strickland's budget proposal would cut about $37.3-million in aid to private colleges by eliminating programs that include the Ohio Student Choice Grant, which gives $640 to each state resident who attends an independent college in Ohio, and two other scholarships that benefit private-college students.

"Independent colleges were surprised at the depth of the cuts to student aid," said C. Todd Jones, president and general counsel of the Association of Independent Colleges and Universities of Ohio. Total aid to students at private colleges was slashed by 46.7 percent in the governor's budget, he said.

Eric D. Fingerhut, chancellor of the Ohio Board of Regents, called the proposal to cut scholarships for private-college students "regrettable." But those colleges "have understood for two years that we did not support student choice as a priority," he said.

Instead the state has emphasized freezing tuition at public colleges, increasing need-based aid, and providing merit scholarships to students who pursue degrees in science, technology, engineering, mathematics, and other high-demand fields.

Private colleges would still get some state money under the governor's plan. It would remove private-college students from eligibility for the state's need-based aid program but would set aside $40-million for independent institutions to distribute to students according to a need-based formula of the colleges' choosing.

Mr. Jones said his group was supportive of the idea but disappointed by the size of the set-aside. In Ohio, he said, "there's generally a view that public and private higher education should be treated equally." But this year "the governor has made very clear that funding for public colleges is a top priority, and private colleges a lower priority."

In response, Mr. Fingerhut called it "completely incorrect and, frankly, disturbing" to say that the governor disproportionately cut funds for private colleges. Most state agencies are facing deep reductions as Ohio grapples with a $7.3-billion shortfall over the next two years, but higher education — both public and private — has fared well, he said, noting that private colleges are being asked only to give up funds for non-need-based aid.

A Small Victory

Private colleges in Wisconsin appear to have won a small victory in their fight to retain state aid as lawmakers seek to close a $5.7-billion deficit in the budget for the next two years.

Rolf Wegenke, president of the Wisconsin Association of Independent Colleges and Universities, negotiated an agreement with the state's technical colleges and the head of the public colleges' student association in which they jointly asked the governor to take money that would have gone to construction projects at public institutions and use it instead to increase funds for tuition-assistance programs that help all Wisconsin students.

"While we appreciate all of the proposals to fund bricks and mortar, we ask you to remember that without students who have access to them, buildings and programs will help neither our colleges nor our state," Mr. Wegenke wrote to Gov. James E. Doyle in early February. The letter was also signed by the leaders of the United Council of UW Students and the Wisconsin Technical College District Boards Association.

Until the budget was released, higher-education leaders in the state believed that Mr. Doyle, a Democrat, was planning to cut aid to private-college students, many of whom were anxious over their ability to continue to pay for college. But when the governor released his proposed budget, about a week after receiving the letter from the college officials, higher education was the only sector slated to receive a spending increase. The governor proposed a 30-percent increase in student aid at public institutions and a 3-percent increase at private ones.

Private-college officials say they were just happy to see a proposal for their aid show up at all, but Mr. Wegenke said he was still worried about long-term spending trends. State aid to public-college students jumped 285 percent over the past 12 years, to $55-million this year, while aid for students at independent colleges grew by only 62 percent over the same period, to $26-million. Mr. Wegenke vowed to fight for more-equal levels of aid, especially since the 20 members of his association have over the past decade greatly increased the number of students they serve from underrepresented minority groups and low-income families.

Losing a Competitive Edge?

Louisiana's private colleges have received a steady flow of state aid for about 10 years, but this year it could be cut altogether.

The Aid to Independents Program, providing grants directly to private colleges to help cover the cost of educating in-state students, was financed at about $4.2-million last year, said Mary Ann Coleman, president of the Louisiana Association of Independent Colleges and Universities. But this year, as the state has told public-university officials to brace for cuts as large as 30 percent, discretionary spending for private colleges is far from secure.

"We are expecting a cut," Ms. Coleman said, adding that the association is asking the state to make any reduction proportional to that for public colleges rather than eliminate the program.

The direct aid, which equals about $440 per student this year, can be used for academic purposes only, with some colleges spending it exclusively on student financial aid, she said. Without that money, colleges would lose their ability to keep as many residents in the state, which she called a significant challenge because of competition from institutions in neighboring Arkansas, Mississippi, and Texas.

A need-based financial-aid program that helps students at public as well as private colleges in Louisiana is also in jeopardy, she said.

An Effort To Get Money Back

Private colleges in Illinois are trying to undo cuts made by former Governor Rod Blagojevich, a Democrat. Last year he vetoed all aid programs under the Health Services Education Grants Act, which provided about $17-million to private institutions with programs in medicine, nursing, and other health-related fields.

In Illinois, government agencies recommend budget items to the governor, who then writes a proposal to present to the General Assembly. None of the agencies recommended reintroducing funds for Health Services Education Grants in the budget for next year, but private colleges haven't given up hope, said David W. Tretter, president of the Federation of Independent Illinois Colleges and Universities.

The colleges support a bill in the legislature that would finance the grants for the rest of this academic year, even though the second semester is half over. Mr. Tretter said that he knew it would be an uphill battle, but that he has the sense that legislators will support the grants if they can find enough room in the budget to finance them. If the bill passes, it would pave the way for the grants to be restored to the 2010 budget as well.

"There's a recognition that they're pretty important," Mr. Tretter said, "given the state's health-care needs."