The American public higher education finance system is broken. States' disinvestment in higher education in recent decades has driven tuition prices ever higher, placing us at the precipice of a college affordability crisis. The federal government's investment in student aid is substantial, yet the productivity of these dollars is not maximized to make college affordable for all students attending the nation's public colleges and universities. The end results are decreasing college affordability, increasing student debt, and a quickening state-to-student cost shift in who pays for a public college education.
One underutilized strategy for reducing the need for tuition price increases is to do a better job leveraging existing federal dollars to incentivize states to invest more in their public colleges and universities. There is precedent for this: the federal government's use in recent years of "maintenance of effort" provisions in spending bills, which require states to maintain funding levels for public institutions of higher education at or above a specified threshold in order to be eligible for federal funds. Such a provision included in the federal stimulus legislation likely prevented states from cutting hundreds of millions of additional dollars from higher education, according to an analysis by the American Association of State Colleges and Universities (AASCU). Had this provision not been included in the legislation, tuition rates would have climbed even higher in recent years.
A bold and permanent federal program is needed to fully harness the federal government's investment in higher education, especially in its pursuit of college access for low- and middle-income students. Toward this end, AASCU proposes a federal matching program to stop the privatization of public higher education. Called the Federal-State College Affordability Partnership, it would leverage up to $15 billion in federal student aid dollars to incentivize states to invest in public higher education, in turn mitigating tuition increases and improving college affordability.
The program would reward states whose higher education funding practices align with the federal government's longstanding commitment to making college more affordable. It would compare each state's per-student appropriation to the Pell Grant maximum award--the federal government's level of support for low-income students--and provide progressively greater federal matching dollars to states that fund their students better. The program would create a strong link between state and federal investment in higher education, improving the stability and predictability of state higher education funding and providing a meaningful, longer-term solution to ensuring public college access for all Americans.
Enormous national interests are at stake--America's global standing as an economic leader being chief among them--let alone the aspirations of millions of Americans. Accordingly, Congress is encouraged to give serious consideration to the Federal-State College Affordability Partnership.