5 Reasons Students will Love the New Higher Ed Bill

Expanding scholarships, savings incentives, refinancing loans, collaboration efforts, and finding a new funding formula are all a great start, but could more be done?

Tuition and fees at UMass have gone way up, average student debt for UMass Amherst graduates has hit $30,000, and if the relationship between university costs and debt continues, this year’s freshmen are looking at owing over $36,000 when they graduate.

The rise in college costs and student debt remain prominent issues with no relief in sight.  With the recent media buzz over the UMass tuition and fee hikes of more than 5 percent, it’s no wonder that the state legislature has teed up a new higher education bill: H. 1068.  The bill, sponsored by co-chairs of the Joint Committee on Higher Education Senator Michael Moore and Rep. Thomas Sannicandro, focuses on making higher education more affordable for Massachusetts students.  This is an undeniably necessary goal.  The bill is a good start towards ensuring college affordability, but the state could do more to control non-academic higher ed costs.

The bill, titled “An Act relative to strengthening and expanding affordable, quality higher education opportunities for residents of the Commonwealth,” primarily looks to do so by expanding scholarships, creating savings incentive programs, and increasing funding.  It would allocate an additional $42 million each year for MA scholarships and financial aid from 2016 through 2020.  To ensure the responsible use of all state scholarship and financial aid funds, the bill would require the money to be available only to students attending institutions that meet certain requirements, including a maximum of 40 percent of undergraduates with student loans and a minimum graduation rate of 30 percent for students taking 150 percent or less of the expected time to complete their degree requirements. Limiting state financial aid and scholarships to institutions that focus on graduation timeliness and limiting student debt is a commendable step towards college affordability.

The higher ed bill would also pilot a college savings incentive program: the Lower Income Family Postsecondary Education Savings Incentive Matching Grant Pilot Program.  The program would accept 250 applicants, first come, first served, who contributed to a prepaid tuition program or college savings account that year.  The amount must be at least $150, but the match would not exceed $1,000.  Although there is merit to this idea, the impact of matching contributions for only 250 families when over 400,000 children in Massachusetts are from low-income families would be limited at best.

One commendable idea included in the bill is the allocation of $10 million to the Massachusetts Educational Financing Authority to refinance existing high-interest rate student loans with the Authority.  This is important because it doesn’t leave out recent college graduates with hefty loan burdens or current upperclassmen who likely won’t see the benefits of today’s reforms.

The establishment of a Partnership to Advance Collaboration and Efficiency is another notable part of H. 1068.  PACE would promote cost efficiencies at all public higher ed institutions by increasing joint purchasing, shared services, and promoting innovative academic opportunities for students. A key part of this provision directs cost savings resulting from PACE’s efforts towards reducing the cost of education for students— lowering tuition and fees rather than funding additional services.  This could greatly enhance college affordability if PACE yields significant savings.  But since PACE is set up to be a collaboration between UMass, the state universities and the community colleges, the question is whether cost reductions will translate into meaningful savings after being spread across the entire public higher education system.

PACE is a solid first step towards efficiency, but the state should also encourage more at the institutional level.  Campuses would have more incentive to make a good faith effort to participate in cost-reduction efforts if their students would reap the benefits directly.

In terms of state funding, the bill calls for development of a new funding formula that would calculate the annual state appropriation to each institution.  The amount would be based in part on “base funding,” or cost of education, and “performance funding,” essentially degrees conferred.  The Legislature is on the right track with the idea of tying funding to performance, but still needs to create a mechanism to ensure fiscal responsibility and operational efficiency at the campuses.

In a separate section, H. 1068 would specifically increase appropriations for all of public higher education by at least $95 million each year from 2016 to 2020 and provide $2.1 billion for capital improvements at UMass alone.  But allocating more funds for the “ordinary maintenance” of these institutions does nothing to ensure cost reductions for students.

The state should exercise caution in throwing money at the colleges.

In 2014, the head basketball coach at UMass, Derek Kellogg, was paid over $1.1 million.  Ex-head football coach Charley Molnar was paid over $950,000 a year before being fired after two abysmal seasons.  Not one educator is included in the 10 top-paid employees in the UMass system, whose combined salaries exceed $7 million.

Non-academic cuts should be made before more money is sent their way. Perhaps, a condition for receiving an increase in the state’s appropriation for operating and capital expenses could be an audit of each institution’s spending that identifies ways to cut athletic or administrative costs.

1068 is a promising first step towards making college more affordable. It provides a great framework for ensuring that public higher education institutions receive adequate funding and that financial aid programs are expanded, but more could be done to tackle the cost issue head-on. Increases in non-academic expenditures come at a price: this year, it’s a 5 to 8 percent increase in tuition and fees at the UMass system for in-state students.  To control costs, this bill should create a method to monitor the appropriate spending of state funds, ensuring the focus remains on the education of in-state students at an affordable price.

 

Lauren Corvese is a student at Northeastern University working as a Research and Programs Assistant at Pioneer Institute through the Co-op Program. Lauren tweets at: @laurencorvese