SB 10-03: Concerning higher education flexibility to improve the financial position of state institutions of higher education

Type: Testimony
Published Date: May 6, 2010
Author: Waterous, Frank

Concerning higher education flexibility to improve
the financial position of state institutions of higher education

Senate Bill 10-003
Testimony to the House Education Committee
Frank Waterous, Ph.D., Senior Policy Analyst
May 6, 2010

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 fundamentally believes that a policy which sustains public higher education by shifting more and more of the funding responsibility onto students and families – as Colorado has done over the last 25 years and will accelerate through tuition flexibility – is not a good long-term strategy to support expanded opportunity in our state. We further believe that it is one of the essential functions and obligations of government to support the development of an educated citizenry and workforce.

However, we also recognize that Colorado faces an unprecedented funding problem – not just for higher education, but for all of state government – which could bring the very real threat of program and service reductions or institutional closures. Given these circumstances, we reluctantly view limited tuition flexibility as the lesser of two policy evils. But the critical word here is "limited." Tuition flexibility should not represent a policy change in perpetuity for Colorado higher education funding.

In this context, the Bell Policy Center supports Senate Bill 10-003, as amended, because it now meets three key threshold principals:

First, the amended bill would limit to five fiscal years the timeframe during which the tuition flexibility policy is in effect. We believe that such a limitation is essential, since tuition flexibility should be seen as a short-term approach to bridge the funding gap until another means of long-term, sustainable state support for higher education can be identified.

Second, the amended bill would provide protections for access and affordability for low- and middle-income students. A critical provision of the bill would be that governing boards seeking tuition flexibility must submit "four-year financial and accountability plans" for approval by the Colorado Commission on Higher Education. The plans would include, among other things, details on how access and affordability would be ensured, and how student debt load would be reduced.

Third, the amended bill would underscore the importance of statewide master planning for our system of higher education, even at a time when governing boards are being afforded increased operational flexibility. Among the elements to be addressed in the master plan would be: state needs and priorities, higher education alignment within a P-20 system, access and affordability, sustainable funding for higher education, institutional roles and missions, and the governance structure of the system as a whole.

Despite our support for the amended bill, there are still two important elements of it about which we continue to have significant concerns. Specifically,

  • Because of its potential impact on low- and middle-income families, we are troubled that a 9 percent tuition increase is now viewed as an acceptable step for governing boards to take without triggering concerns or actions regarding access and affordability. Not long ago, such an increase was seen in our state as a regrettably-reached ceiling in the tuition setting process. We encourage you to consider if a lower limit might be advisable as a threshold, given the potential impact on students and families.
  • The bill does not address the fundamental importance of increasing, or at minimum maintaining, state need-based financial aid as a critical component in the "high tuition/high aid" model that lies at the heart of tuition flexibility. The National Center for Public Policy and Higher Education notes that states cannot and should not rely solely on the expanded institutional aid resulting from tuition increases when trying to make up for lost state revenues.(1) We hope that in the time prior to this tuition flexibility policy taking effect, the legislature and the people of Colorado will have serious discussions about an appropriate, sustainable, and secure source of funding for increased state financial aid.

In summary, the Bell Policy Center supports Senate Bill 10-003 as amended as the lesser of two policy evils given the state's current fiscal circumstances. We would like to express our appreciation to the sponsors for their hard work and commitment to preserving higher education access and affordability throughout the state during these very challenging fiscal times.

Thank you for the opportunity to share this information with you 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@thebell.org.

End notes

1). The Challenge to States: Preserving College Access and Affordability in a Time of Crisis, The National Center for Public Policy and Higher Education, March 2009