Thursday, October 24, 2002

The discussion continued over on the discuss list. Notably, one of the state legislators, Joe Opatz (DFL-St. Cloud) is an administrator at SCSU and often provides us with some observations from the inside. He and I have discussed a couple of times the move within Minnesota towards a "high tuition-high aid" model for higher education. Turns out there is a serious push for a reduction in the allocation of money for higher education that goes directly to public institutions, with the funds moved towards the State Grant Program. If the push succeeds, about a quarter billion dollars moves from the University of Minnesota and the state university and technical/community college systems to grants -- which can be used for financial aid for students (of lower income families) to go to private schools. That revenue would have to be made up by higher tuition (currently students pay around a third of education costs through tuition, and state money pays the rest.) Joe characterizes the argument for this plan
The new grant money would then be targeted to low-income students. Putting more dollars in the hands of the neediest students would, they argue, increase college participation by this underserved population. It would also provide incentives for institutions to compete in a more robust market place and thus improve both quality and efficiency. They further argue that such an approach will more efficiently fulfill the state's needs for an educated workforce. Finally, higher income students would pay closer to the actual cost of their college experience, for which they will reap great financial rewards.
I don't really have a problem with this. But it does create a major concern for us that it goes to private schools, which Joe is right on top of as well:
Although Minnesota is 5th in the nation in grant dollars to full-time undergraduates, it ranks far lower, at 21st, in the percent of undergraduates receiving need-based grant aid and 27th in the nation for percent of undergraduates receiving all grant aid (1999-2000 data; NASSGAP, 2001 {link added -- if it's the wrong one, that's my fault--kb}). In other words, Minnesota spends a large amount for student aid but gives it to a relatively small number of students. This is so because of Minnesota's unusual commitment to private colleges. The higher tuition of private colleges is taken into account when calculating the awards given to students. Thus, it turns out that 52% of the $120 million of taxpayer money used to fund the program each year goes to the 18% of Minnesota undergraduate students who choose to attend a private college.
That last number is the jawdropper. I'm reasonably certain most states don't do this -- I'd've loved to have tapped state grant money to go to St. Anselm when I was a college student, but there was no way New Hampshire would ever do that!

One problem I think for the argument Joe makes is that there's a lag between our receiving a student and the public money that funds the other 2/3rds of their cost. We're real sensitive to movements in enrollments; upticks can be very stressful. High-tuition/high-aid would probably dampen those unexpected cost cycles.

More to the point, what's the real harm here? The point is that what the taxpayer wants is an educated public, regardless of where they are educated. It's up to us as academics in a public university to be sure we're offering value. How do we do that? It's a matter of accessibility, contact with faculty and staff, good advising, etc. Done correctly, high-tuition/high-aid doesn't change accessibility for lower-income families. It does matter, of course -- demand curves slope downward, even for higher ed. (and regardless of the Wall Street Journal's take on this.) That model is going to cost us a few students. But if it makes us more creative, more proactive and pro-student, I say let's sign up.

In essence, what we have in MN is a higher-ed voucher that you can take to any private school, religious or secular. It should come as no surprise that I favor vouchers. The more I think about this, I might have to go along with the Citizen's League on this one.
Thank you, Joe, for the information. I learned something new today.

Late add. It dawned on me after posting that the number Joe cites would seem to mean that some students are getting grants for private school that exceed public tuition costs. I think there's a good argument for capping the size of grants at, say, the tuition level for UM. Or even full in-state costs with room and board there. That would make it emulate a voucher even more, and eliminate the incentive for private schools to generate higher grant awards through increased tuition.