Bell testifies on fiscal aspects of unsubsidized in-state tuition

The Bell testified in favor of Senate Bill 126 before the Senate Education Committee today. The bill would allow qualified undocumented high school graduates to pay unsubsidized in-state tuition to attend state colleges and universities. Here is our testimony:

My name is Frank Waterous, and I am a senior policy analyst with The Bell Policy Center. The Bell is a nonpartisan, nonprofit research and policy organization dedicated to expanding opportunity for all Coloradans.

The Bell Policy Center strongly supports Senate Bill 11-126, "Unsubsidized In-State Tuition," also known as the Colorado ASSET (Advancing Students for a Stronger Economy Tomorrow) bill. By ensuring that more Colorado high school graduates can access post-secondary educational opportunities through the payment of full, unsubsidized in-state tuition, the bill is good education policy, good workforce development policy and good economic development policy.

The sponsors and other witnesses have talked about some of the bill's educational, workforce and economic benefits. In my testimony today, I would like to address two important fiscal aspects of the bill.

First, I think it is important to clearly understand what unsubsidized in-state tuition really means. Many people are not aware that the "total tuition" owed by a typical in-state student is made up of two parts: the "student's share" and the "state's share." The student pays his or her share out-of-pocket. The state's share is paid to institutions on behalf of qualified students through the College Opportunity Fund (COF) stipend, a per-credit-hour amount that represents a subsidy, or offset, for that portion of the total tuition owed. Currently, the stipend amount is $62 per credit hour for a student at a public higher education institution. However, it is often described in terms of the per-year amount of $1,860 for a full-time student taking 30 credits a year.

For unsubsidized in-state tuition under this bill, the student would be paying the total tuition amount – both the student's share and the state's share – out-of-pocket with no state subsidy. It is not "free tuition," as some have suggested. Nor is it the same amount that other in-state students pay – it is more. It is the full, unsubsidized in-state tuition amount, borne totally by the student and his or her family without the use of public funds.

Second, while it is clear that no state money will be used to directly support these students through either the COF tuition stipend or state need-based financial aid, there has been some discussion of whether they might indirectly benefit from state moneys provided to the institutions through the COF Fee-For-Service program. We believe that this concern is unfounded for two reasons.

• As implemented over the years, the Fee-For-Service program has been used as a kind of "hold harmless" provision for the institutions to ensure that funding levels remain relatively stable, and to support the institutions' general operations, including a broad range of programs and services. It is not tied directly to enrollments and would not change based on passage of this bill. These programs and services would exist whether students covered under this bill were enrolled or not. And as the bill's fiscal note suggests, the additional institutional revenues generated by the payment of full, unsubsidized in-state tuition by these students would be used to cover any additional costs associated with their education.

• The question of whether these students would indirectly benefit from taxpayer moneys provided to the institutions also overlooks the critical fact that undocumented students and their families are, in fact, taxpayers themselves. Research conducted by the Bell Policy Center found that in 2005, undocumented immigrants in Colorado paid between $159 million and $194 million in state and local taxes.(1) Of that amount, approximately $80 million to $100 million would have been state taxes paid and used by Colorado to support a variety of public programs and services. We think that it is clear that any theoretical benefit that undocumented students might gain from Fee-for-Service programs supported by "taxpayer moneys" would be incremental at best, and would be more than offset by the amount of state taxes paid annually by undocumented immigrants themselves.

In closing, The Bell Policy Center believes that Senate Bill 11-126 will lead to positive outcomes for Colorado high school graduates, higher education institutions, and the people of the state by expanding post-secondary opportunities, developing a more highly educated workforce, and strengthening the base upon which our future economic competitiveness and quality of life will rest. We urge you to support the bill, and we thank you for the opportunity to share this information today.

If you have any questions, or if I can provide further information, please call me at 303-297-0456 or email me at waterous@bellpolicy.org.

(1) Robin Baker, Ph.D., and Rich Jones, State and local taxes paid in Colorado by undocumented immigrants, The Bell Policy Center, June 30, 2006.