discussion 5

Module Overview:

Liberal and Market Models of Higher Education Policy

Module Five focuses on two states, California and Minnesota, as the complexities of higher education policy are examined and the variety of political, social, economic, and environmental factors contributing to the ways in which policies are developed are discussed. These policies, in turn, deeply impact the higher education systems within both states, with a particularly strong influence on funding models for colleges and universities.

Higher Education Policy in California

The California Master Plan for Higher Education guided the development of three campus systems in California: the University of California (UC), California State University (CSU), and California Community Colleges systems (St. John, Daun-Barnett, & Moronski-Chapman, 2013). Nearly four out of five college students in California attend one of the three public education systems and three out of every four bachelor degrees awarded annually are from either the UC or CSU systems (Johnson, 2014). Yet, the state is facing somewhat of an education crisis and Johnson projects a shortfall of one million college graduates by 2025.

In recent years, the historic California model has broken down as the systems have been negatively impacted by the state’s fiscal woes. While colleges and universities have responded to funding cuts by reducing expenses, including cutting administrative costs and hiring more non-tenure track faculty, declines in state support have forced the UC system to increase tuition fees by 50% in three years while CSU fees have increase by 47% in the same period (Johnson, Cook, Murphy, and Weston, 2014). Students are increasingly becoming indebted in order to accomplish their educational goals in California; the average loan amounts among students have risen 36% between 2005 and 2010 (a figure adjusted for inflation) (Johnson, 2014). Hoping to save expenses, many students begin their college educations at California community colleges, which have become so overcrowded that in 2012, 137,000 students could not enroll into at least one class that they needed and community colleges resorted to “rationing” courses (Dellner, 2012). This evidence suggests new changes are needed in the California state system to support students at all levels of enrollment.

In part, California’s steady decreases in higher education funding are a consequence of a need to fund other state services; for example, Johnson (2012) notes that from 2002 to 2012, state expenditures for higher education fell by close to 10% whereas expenditures for corrections and rehabilitation increased by 26%. Historical trends suggest that the state’s priorities began shifting from higher education toward corrections since the 1970s, even though the majority of Californians (68%) opposed spending cuts in higher education to reduce state budget deficits and 62% supported spending cuts in corrections to balance state budgets (Baldassare, Bonner, Petek, & Shrestha, 2011). The trends in California suggest a mismatch between stakeholders’ desires and current higher education policies.

Higher Education Policy in Minnesota

Minnesota, by comparison, has two public postsecondary systems: the Minnesota State Colleges and Universities (MnSCU) system, including four-year and two-year institutions, and the University of Minnesota (UMN) system (Novak, 2010). Minnesota’s two-year and four-year institutions have among the highest published tuition and fees nationally, although grants and scholarships reduce published tuition and fees by an average of $4,000 for the 71% of students who receive these forms of aid (Armstrong et al., 2014). The high tuition and high aid policies are still somewhat problematic for low-income students, as state and federal grants do not often cover the full cost of attendance. Public colleges and universities across the nation have shifted to providing more merit aid awards and less need-based awards in recent decades (Burd, 2013). Many colleges and universities have focused on recruiting “full pay” students who may be incentivized with merit-based scholarships, as it would be financially advantageous to offer five $2,000 scholarships to students who can repay the remaining balance as opposed to a single $10,000 scholarship to one low-income student.

The high-tuition and high-aid model is a response to challenges similarly posed to higher education institutions in California: decreases in state support and increases in tuition costs borne by students and families. The Minnesota model means that many college students in Minnesota graduate with high debt and, as outlined by St. John et al. (2013), newer models of funding in Minnesota place greater burdens on students from low-income families. The percentage of need-based grants in relation to tuition has declined in similar rates across the nation.

Impact of Policies on Internal and External Stakeholders

Clearly, internal and external stakeholders are concerned with these trends. For example, college students and their families are immediately impacted by the short- and long-term costs of attending higher education. Unemployment rates are significantly lower for college graduates compared to those without degrees, while lifetime earnings are significantly higher for graduates (Johnson, Cuellar Mejia, Ezekiel, & Zeiger, 2013). These issues affect all citizens of the United States, given the strong links between college students’ degree attainment and overall economic prosperity of the nation.

It is important to consider the effects of higher education policies on all stakeholders. Strategies to glean the insights of undergraduates can help policy makers to discover the important stakeholders’ priorities and concerns related to higher education. Public Agenda (2012a) developed a policy report advocating interviews with students as primary stakeholders in higher education. Public Agenda (2012b) also developed a list of questions to trigger critical thinking and collaborative problem solving for faculty, staff, advisors, and administrators. These are important stakeholders in the issue of college completion. Public Agenda also designed an internal stakeholder engagement workshop toolkit that offers suggestions for soliciting opinions from stakeholders and engaging them in the process of developing collaboration solutions.

Finally, external stakeholders have a vested interest in higher education outcomes as well. If states are subsidizing higher education institutions, they wish to know how they will be responsible for contributing to the resources required to implement the policies, whether the policies will have their intended impact, and whether there will be any return on investment for the states’ economic systems. States remain concerned about the performance of public institutions and, in some cases, have initiated discussions about performance-based budgeting for colleges and universities. These performance-based budgets would tie state financial contributions to institutional retention and graduation rates. Lahr et al. (2014) analyzed the actual and potential unintended impacts of performance-based budgeting and discovered that the consequences of performance-based budgets could include grade inflation, watered down curriculum, and reduced diversity on campuses. In light of these policies, it can be accurately stated that higher education institutions are increasingly held accountable for meeting student success outcomes and are beginning to feel the weight of public pressure to ensure students’ success.

References

Armstrong, J., Bak, L., Djurovich, A., Edlund, M., Fergus, M., Grimes, T., . . . Williams-Wyche, S. (2014). Minnesota measures 2014: Report on higher education performance. Minnesota Office of Higher Education. Retrieved from http://www.ohe.state.mn.us/pdf/minnesotameasures2014.pdf

Baldassare, M., Bonner, D., Petek, S., & Shrestha, J. (2011). PPIC statewide survey: Californians and their government. Public Policy Institute of California. Retrieved from http://www.ppic.org/content/pubs/survey/S_311MBS.pdf

Burd, S. (2013). Undermining Pell: How colleges compete for wealthy students and leave the low-income behind. New America Foundation. Retrieved from http://education.newamerica.net/sites/newamerica.net/files/policydocs/Merit_Aid%20Final.pdf

Dellner, T. (2012, February 15). California community colleges “ration” courses in response to budget cuts and overcrowding. The CalSouthern Sun. Retrieved from http://www.calsouthern.edu/content/blog/california-community-colleges-consider-course-rationing-in-response-to-budget-cuts-and-overcrowding/

Johnson, H. (2012). Defunding higher education: What are the effects on college enrollment? Public Policy Institute of California. Retrieved from http://www.ppic.org/content/pubs/report/R_512HJR.pdf

Johnson, H. (2015). California’s Future: Higher Education. Public Policy Institute of California. Retrieved from http://www.ppic.org/content/pubs/report/R_215HJR.pdf

Johnson, H., Cook, K., Murphy, P., & Weston, M. (2014). Higher education in California: Institutional costs. Public Policy Institute of California. Retrieved from http://www.ppic.org/main/publication_quick.asp?i=1119

Johnson, H., Cuellar Mejia, M., Ezekiel, D., & Zeiger, B. (2013). Student debt and the value of a college degree. Public Policy Institute of California. Retrieved from http://www.ppic.org/content/pubs/report/R_613HJR.pdf

Lahr, H., Pheatt, L., Dougherty, K., Jones, S., Natow, R., & Reddy, V. (2014). Unintended impacts of performance funding on community colleges and universities in three states. (CCRC Working Paper No. 78). Community College Research Center, Teachers College, Columbia University. Retrieved from http://ccrc.tc.columbia.edu/publications/unintended-impacts-performance-funding.html

Novak, K. (2010). Governing higher education in Minnesota: Public postsecondary systems and agencies. Minnesota State House Research Department. Retrieved from http://www.house.leg.state.mn.us/hrd/pubs/ss/ssppssa.pdf

Public Agenda. (2012a). Internal stakeholder engagement workshop toolkit. Retrieved from http://knowledgecenter.completionbydesign.org/sites/default/files/309%20Public%20Agenda%202012.pdf

Public Agenda. (2012b). Student voices on the higher education pathway: Preliminary insights and stakeholders engagement considerations. WestEd. Retrieved from http://www.publicagenda.org/files/student_voices.pdf

St. John, E. P., Daun-Barnett, N., & Moronski-Chapman, K. M. (2013). Public policy and higher education: Reframing strategies for preparation, access, and college success. New York, NY: Routledge.