Public needs to invest in higher education for all

The Legislature passed a university budget that includes funds for freezing tuition costs. There is a hook. In the second year of the funding the distribution of the funds must be (what is called) performance-based (rather than enrollment-based) funding.

Performance-based funding has been tried for some years in a number of states. In no state is there a clear case of its having provided the benefits that were proposed, and several states have dropped it.

One trouble is that there is no clear way of defining or measuring performance. Consequently, retention and the amount of time students use to obtain a degree become dominant. Neither is related to quality of education. The major cause for students dropping out and extending their stay is that they can’t afford the tuition. (There follows an explanation of this.)

Over the years the Legislature has ended our founders’ tradition of tuition-free higher education and reduced funding for the university. That forced the inception of tuition and, then, regular tuition increases till now the taxpayers fund less than 20 percent of the academic budget.

In short, by cutting funding the Legislature is responsible for poor retention and long stays, and, now, they want to university to fix it with a competitive race to the bottom. They are asking the university to change a situation over which it has no control.

If this very damaging provision must be lived with, two aspects must be added. (1) Each campus must compete only with its own past record, not with other campuses. For example, students on the Missoula campus are more likely to afford tuition than those on the Helena campus. (2) We must stop calculating completion time by calendar year, and, instead, calculate by terms (semesters, quarters) attended. Our many non-traditional students who have to earn a living while going to school should not be treated like the young kids of the tuition-free days.

What is the scope of the problem? A McKinsey Global Institute study projects that in 2020 in the world’s advanced economies the surplus of low skilled workers will be 35 million and the shortage of medium and high skilled workers will be 18 million. Economists tell us we must have more and more college graduates to remain competitive.

President Obama has asked for 8.2 million additional bachelor and associate degrees by 2020 — an annual increase of 4.2 percent.

This spring enrolment at the Missoula campus dropped. (For the first time since WW II?)

The U.S. ranks 15th among industrialized nations for completion rate.

In the late ’60s early ’70s, in the days before tuition, the U.S. had the highest percentage of new college graduates in the world.

Today, Canada, Denmark, France, Japan, New Zealand, Norway, and South Korea have a higher percentage of degree holders ages 25-34 than the U.S.

According to the China Education Center Ltd. The Chinese higher education budget increased 45 percent from 2007 to 2011

In 1997 there were 1,022 institutions of higher education in China. In 2010 there were 2,305.

This year 11 million Chinese students will apply for 6.6 million tuition-free places. They will join others to make a total enrolment in higher education of 21.4 million up from 9 million in 2001.

To supply the skilled work force we need, we need to enroll more and more students whose parents did not attend college. Unfortunately, our efforts to get these students into college and keep them there are failing because they can’t afford to pay the tuition and stay.

The burden of financing higher education has fallen on the students. Here in Montana very few of them have the approximately $24,000 it will cost in tuition for four years on our university campuses.  So we ask them to borrow money.

The result is that, nationwide, college loan debt is now over $1 trillion (that exceeds credit card debt). In 2011 the U.S. Department of Education spent $1.4 billion on student loan collections and guarantees.  A 2011 study by the Washington, D.C.,  Institute for Higher Education found that 58 percent of the 1.8 million borrowers whose loans became due in 2005 had not received a degree. Because they can’t raise the money they are dropping out or they are defaulting. Over half of that 58 percent were delinquent. The result is that one-fifth of the American work force has some college but no degree. Their jobs are going away or have gone away, and those jobs are not coming back. The U.S. economy has lost more jobs to robots than it has to moving jobs overseas.  

In the current budget President Obama wants to create a college version of Race to the Top, which would award $1 billion in competitive grants to states that make college more affordable.

What do we need to do? We need to return our university and community college systems to zero tuition. To do that (for the Montana university system) will require approximately a reduction of $1,000 per student per year for six years or $500 a year for 12 years.

We would be foolish to neglect development of our natural resources, but in the 21st century the development of renewable human resources will be much more important. Shifting the cost of higher education from taxpayers (like me) who send surplus money to New York City onto students who have no surplus and have to borrow and, then, haven’t the income to repay, is the same thing we did with the housing market. And we are cutting future generations off from the American dream.

O’Neil is a resident of Kalispell.