A Great Recession, a Great Retreat – A Call for a Public College Quality Compact

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Author(s): The Center for American Progress

Published: Oct. 27, 2014

Report Intro/Brief:
“… Since the early 1950s, the federal and state governments have shared the cost of providing postsecondary education to citizens, but states have traditionally been a greater source of direct funding for public colleges and universities. Public colleges and universities rely on state investment as a source of both operating and non-operating costs. The subsidy provided by state investment has been critical to keeping costs low and providing an affordable education for all students.

But after making great strides for decades, the country has begun to lose ground. College costs have skyrocketed… Since the Great Recession, states have withdrawn public investment in higher education, and many students from low- and middle-income families have been pushed out of public colleges and universities. Over the past decade, this has resulted in a decline in the college-attendance rate among low-income students and a dramatic slowing of the rate among middle-income students.

In recent years, the federal government has made significant investments in higher education to make the cost of college more affordable, in part to respond to the declining state investment and crisis brought on by the Great Recession…

The additional investment by the federal government to low-income students has partially addressed affordability and helped fill some of the gap caused by rising tuition. However, since declining state investment—the primary driver behind the increasing net price of college—has yet to be addressed, the additional federal support does not fully address the growing need of low-income and middle-income families.

This report builds on CAP’s previous report, “Public College Quality Compact for Students and Taxpayers,” with new state-by-state analysis. In addition to the high-level state analysis, our findings show that:

  • The reduction of state funding coincided with an increased reliance on tuition revenue.
  • Low- and middle-income families in states with the highest disinvestment pay the highest net price relative to students in the same income groups in other states.
  • The cuts disproportionately affected two-year community colleges.

To ensure that American postsecondary education remains affordable for the next generation of students, it is time for the federal government to make an investment similar to the ones recommended by the Truman Commission, with the same goal of significantly boosting degree attainment. This report proposes the creation of a federal grant program, or fund, that creates a direct tie between federal and state investments and encourages states to reinvest in postsecondary education. This new fund will spur states and institutions to more effectively meet the needs of low- and middle-income students. The program would require states to match the federal grants. To be eligible, states would need to agree to implement reforms and innovations that increase students’ value of public colleges, universities, and training centers through a Public College Quality Compact.”


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