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July 13, 2012 5:12 PM Arne Duncan to States: Step Up

By Minjae Park

Speaking at the National Governors Association on Friday, Secretary of Education Arne Duncan urged states to “meet us halfway by doing more to keep college costs down.”

“We’ve made some progress,” he said, “but the combination of deep state budget cuts and rising tuition prices is pushing an affordable college education out of reach for middle-class families.”

The administration today released numbers showing the percentage of Americans in that age group with a postsecondary degree rose from 38.8 percent in 2009 to 39.3 percent in 2010. That latest number places the United States 16th in the world in the category. The 2020 target would put the country in first place.

Duncan said in his speech that making college affordable is essential to achieve that goal. That means state support for higher education cannot continue to decrease.

As Daniel wrote in January:

In fact, per student state support for public universities has been falling for more than 20 years. Before the Great Recession began in 2007, state support was, according to a paper published by the Association of Public and Land-grant Universities, “at the lowest level in 25 years.” And it’s been declining ever since.

The Higher Education Reauthorization Act of 2008, signed into law by President Bush, put in place cost-curbing measures. One of them is a “maintenance of effort” provision, which stipulates that “the federal government will offer states a financial incentive in exchange for their “maintenance” of a prescribed level of funding ‘effort,’” as the American Association of State Colleges and Universities, an association of 420 colleges, universities and systems that promotes access to higher education, described in an April 2010 policy brief.

This maintenance of effort provision means states cannot access matching federal funds from the College Access Challenge Grant program, which helps enroll low-income students, if they cut higher education spending drastically.

The provision is hardly draconian. It doesn’t require increases in state budgets; it just caps the decreases. If a state’s higher education funding has increased three percent in each of the past five years, it can cut 11 percent from its budget for higher education and still be in compliance with the provision. The American Association of State Colleges and Universities found that the provision has worked as intended: In fiscal year 2010, nine states reduced their higher education budgets to within one percent of their threshold. Three of those states set funding at exactly the threshold.

When state legislatures reduce spending on higher education, public universities are more likely to raise tuition. The Department of Education’s news release today says 40 states have cut higher education funding in the past year, and in the last two years, tuition at four-year public universities has increased by 15 percent.

As the price of college rises for students, the federal government is forced to step in and expand federal grants, loans and work-study programs. The federal government has expanded federal aid programs and kept Stafford student loan rates low, Duncan noted in his speech.

“The federal government has done a tremendous amount to increase the amount of aid available to students,” he said. “But we need states and institutions to meet us halfway by doing more to keep college costs down.”

There are no easy answers for states. Daniel noted in February that “In many states the government is constitutionally required to pay for things like state employee pensions. When the economy sours, the states naturally look to costs wherever they can”—i.e., higher education.

The maintenance of effort provision tells states they can’t shift too much of their fiscal burdens onto students, their families and the federal government. Duncan’s message today to governors is the same: Curbing higher education costs—which is crucial to increasing the number of postsecondary degrees—requires states to play their part.

Minjae Park is an intern at the Washington Monthly.