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Will Adding Barriers Threaten Our Economy?

February 23rd, 2015

Amid the Governor’s 2015 budget proposal to drastically cut university and community college funding in Arizona by $75 million, the rising cost of higher education has also come to the forefront. Recent articles in both the Arizona Republic and Washington Post highlight the state’s willingness to defund universities and erect additional barriers to higher education for the state’s neediest students. These are the students that will make or break the future economic well-being of the state.

The Washington Post article featured students from Arizona State University, the University of Arizona, and Northern Arizona University, and described their personal struggles to pay for college.  The students worked full time, received Pell Grants, attended community college, had parental support and still incurred tremendous debt to make it to the finish line. Hard working students used to be able to attend an in-state public university and graduate with little or no debt. Enter the Great Recession, and Arizona slashed higher education funding.  Families now must cover the higher tuition bills.  As stated in the article, “Now, even as the economy ­recovers and taxpayer revenue is pouring back in, states have not restored their funding, and tuition keeps rising, leaving parents and students scrambling to cover costs.”

Student debt across the country now exceeds $1 trillion, and for the first time, families now cover more of the cost of higher education than state governments (this information can be found in a 2014 General Accounting Office study). The article tells us, “no state has cut its higher education funding more since the recession than Arizona, which slashed per-student spending by 48 percent since 2008, from $6,387 per student to $3,305, according to the Center on Budget and Policy Priorities.  According to Arizona Board of Regents President, Eileen I. Klein, 65 percent of our universities’ funding used to come from the state, now it’s down to 25 percent.

Nationally, the cost to attend public universities has been on the rise. The cost to attend Arizona’s universities has risen from approximately $5,600 to over $10,000 per year, and that doesn’t include books, fees, or room and board.  ASU’s President, Michael Crowe, has held in-state tuition in check for the second straight year, but that can’t last much longer.

As tax revenues continue to disappoint, states are deciding whether to cut services or raise taxes to find the funding needed for higher education.  Arizona’s leaders seem content to trade college funding for more private prisons.  Even as Arizona is facing a $1.5 billion budget deficit, many of the state’s programs are legislatively immune from budget cuts.  Unfortunately, education isn’t one of those.

In Governor Ducey’s State of the State Address, he proposed a $75 million cut to universities.  Actual cuts could be deeper.  Daniel Scarpinato, the governor’s spokesman stated that “Governor Ducey believes higher education is an investment, both for the state and for individuals, and he will continue working closely with the regents and the presidents to ensure Arizona universities remain successful.”

Arizona used to have one of the most affordable university systems in the country, receiving more than $1 billion a year from the state’s general fund.  These revenues kept in-state tuition below the national average.  When revenues slowed, the legislature cut millions, slashing more than 2,100 positions, and nearly 200 programs, or departments. The tragic irony is that while states were cutting funding, and costs were skyrocketing, Americans were returning to school in droves desperate to earn a degree to help them find a better job, or any job at all.

Bringing it back to Arizona, according to the Washington Post article, a recent report from the student advocacy group, the Young Invincibles, shows the average student graduating from an Arizona university with over $20,000 in debt.  This group gave the state a failing grade for offering only $47 in grants per full-time student, well below the national average of $561. On the Federal level, Pell grants for ­low-income students may now cover just over one-third of college costs.  All of this leads to higher costs to the student, or their family.

To offset the massive and imminent cuts to public higher education, an Arizona strategy has been to enroll more out of state and international students, at much higher tuition rates.  But with Arizona’s attainment rate running in the 35 to 40 percent range, this is not helping us compete in the economy of the 21st Century where nearly 70 percent of all jobs in Arizona will require a post-secondary degree or specialized certificate.  Bringing in more out of state students does nothing to help us get our Arizona students educated.

For every 1,000 Arizonan’s that graduate from college, our state benefits from over $1.2 million in annual state tax revenue.  The impact to the economy explodes when their income and spending, savings from reduced incarcerations, and use of social safety nets such as Medicaid, unemployment insurance, and nutrition assistance are included.

The Washington Post’s article, “Going to a public college is not as affordable as it used to be,” featuring Arizona’s three public universities, paints a disturbing picture.  America has a college-affordability crisis and Arizona faces tough budget decisions, but placing higher barriers to college access ultimately threatens the state’s economic future.

College Success Arizona knows this from experience. Our first-generation, low-income scholars have faced debilitating financial barriers to success. Arizona hovers around 40th nationally in college going students. What’s more, 68 percent of Arizona jobs will require postsecondary education or training by 2020, yet only 37 percent of Arizona adults hold a degree. These alarming metrics call for more state support, not less.

A good first step to increasing college graduation rates will be for Arizona to set a higher education attainment goal as a rallying point. Many states have already established goals.  Colorado and Washington established goals of over 60 percent, which mirrors Lumina Education Foundation’s national goal. We appreciate that hard budget choices must be made, but is now the time to put additional burdens on our students? College Success Arizona is working with other education leaders to increase college attendance rates, college outcomes, and the number of graduates to levels that will keep businesses coming to the state and improve the future quality of life for all Arizonans.

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