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Michael Leachman: Tuition costs are rising as states respond to the recession by cutting public funding to higher education, with cuts averaging 28% on a per pupil basis

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JESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore.

As most parents and students know, college is expensive. But it hasn’t always been that way. Tuition at four-year public colleges has been rising for the past 25 years and has increased 27 percent just since 2007. That’s according to the nonpartisan Center on Budget and Policy Priorities.

But what’s behind the rising costs? And why are so many graduates saddled with debt as they begin their careers? Our next guest claims the single most important reason for skyrocketing tuition is state and local government cuts to higher education.

Now joining us is Michael Leachman. Michael is the director of state fiscal research with the State Fiscal Policy division at the Center on Budget and Policy Priorities.

Thanks for joining us, Michael.


DESVARIEUX: So, Michael, your report shows that 48 states have cut funding to higher education over the past five years. How deep are the cuts, and how do they translate into higher tuition?

LEACHMAN: Well, the average state has cut funding for higher ed by 28 percent, after you adjust for inflation, on a per pupil basis. So that’s a huge cut. That’s the average cut. Some states have cut higher ed funding by a lot more than that. There’s a couple of states–Arizona and New Hampshire–that have cut their state higher ed funding by half just in the last five years since the recession hit.

How we account for the cuts: what’s mainly happened is the recession hit. You know, the recession was a really historic one, and it pummelled state revenues, and as a result they cut back on all kinds of areas. And state higher ed took a especially deep cut, in part because states know that higher education institutions have another revenue source, and that is to raise tuition. And that’s exactly what happened. We saw very rapid tuition increases at the same time that we saw these sharp declines in state funding.

DESVARIEUX: But it hasn’t always been that way, right? Let’s take a look at one of the graphs from your report. We see that students didn’t always shoulder such a large share of the costs of public higher education. For example, in 1987, students paid close to 20 percent of their tuition, and in 2012 it’s inching closer to 50 percent. How has it changed in the last 25 years? Who’s funding public universities?

LEACHMAN: Yeah, well, that’s exactly right. What’s happened is that the states’ share, state and local funding, has gone down, and tuition has risen to sort of risen to fill that gap. So if you look over the last 25 years, per student revenue from state and local government, it fell by about $2,600 after you adjust for inflation–that’s per student–$2,600. Over the same period, tuition increased by $2,600. So, in other words, the entire increase in tuition at public colleges and universities over the last 25 years has gone to make up for the state and local funding cuts.

DESVARIEUX: And you really point to the recession being the major cause in these cuts to public universities. And I want to talk, though, specifically about some states, like Michigan, Pennsylvania, North Carolina, who’ve given billions in corporate tax cuts. Are states really in desperate need, or is this a matter of choice?

LEACHMAN: Well, it’s certainly true that the recession was historic. This most recent one was the worst that states have seen since the Depression. And so there is a real–it’s true that state revenues did go down a lot.

On the other hand, how states respond to the recession and how states handle their funding responsibilities over the long haul is a choice that states make. And, as you say, some states have made the choice in the last couple of years to cut taxes significantly. And most of those tax cuts are targeted to higher-income people, or in some cases corporations. And that reduces revenue and makes it harder for states to fund their higher-education institutions and to avoid tuition increases in the first place, or, once they’re in place, to reverse them and shift costs off the back of students and their families.

DESVARIEUX: Michael, what do you see as a solution to financing higher education so students are not expected to pay the majority of the costs?

LEACHMAN: Yeah, the solution is more public funding. I mean, you know, when more people have a college education, it helps all of us, because it helps the economy. It means that our workers are more productive and the economy’s stronger. So what we really should do is to try to make college as affordable as possible for individuals and share the cost of that through public funding. States should really be raising taxes in a way that’s based on people’s ability to pay and then use that money in part to reduce the cost, to make college more affordable for more people.

DESVARIEUX: You mention the states, but what about the federal government? What role do they play to ensure adequate funding for public higher education?

LEACHMAN: Well, if you look at the history of what’s happened here, the biggest tuition increases happen when recessions hit. And so what the federal government can do, even though it’s states and localities who are by far the primary funder of higher-education institutions, the federal government ought to step in, just automatically step in when recessions hit, because they know that state and local revenues are going down and it’s difficult for states and localities to keep their funding up when that happens. The federal government should step in and fill that gap when recessions hit to make sure that there’s enough funding there, and so states don’t have to turn to tuition increases as they typically do when recessions hit.

DESVARIEUX: Alright. Michael Leachman, thank you so much for joining us.

LEACHMAN: Oh, thank you for the opportunity.

DESVARIEUX: And thank you for joining us on The Real News Network.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.

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Michael Leachman is Director of State Fiscal Research with the State Fiscal Policy division of the Center, which analyzes state tax and budget policy decisions and promotes sustainable policies that take into account the needs of families of all income levels.

Since joining the Center in 2009, Leachman has researched a range of state fiscal policy issues including the impact of federal aid, the debt states owe in their Unemployment Insurance trust funds, and the wisdom of state spending limits.

Prior to joining the Center, he was a policy analyst for nine years at the Oregon Center for Public Policy (OCPP), a member of the State Fiscal Analysis Initiative. His work at OCPP included research on corporate income taxes, reserve funds, spending limits, the Earned Income Tax Credit, food stamps, and TANF.