KY Policy Blog

Governor’s Budget Proposal Would Worsen College Affordability

By Dustin Pugel
February 11, 2016

Governor Bevin’s budget proposal would not improve — and would even worsen — the state’s college affordability problems. Deep budget cuts to public universities and community colleges are expected to result in more tuition increases, and funding for need-based scholarships remains basically flat while lottery money intended for these scholarships is diverted to other priorities.

Unless greater investments are made in higher education than what has been proposed, the opportunity to go to college and complete a degree will continue slipping farther and farther away for many Kentuckians.

While the eight public universities and the community college system have seen their budgets slashed over the last eight years, the additional cuts are particularly severe. In inflation-adjusted dollars, Kentucky’s public postsecondary institutions would be cut 35.4 percent since 2008. Cuts could end up being even greater at these universities and community colleges in 2018, as a third of the funds are dependent upon each school’s performance on an as yet to be determined set of criteria.

As state funding for Kentucky’s higher education institutions has been cut over the years, tuition has gone up dramatically, in large part to make up for these cuts. Since 1999, tuition at state schools has increased from 206 percent (at Murray State) to 286 percent (at Western Kentucky) (see graph below). Community and technical college tuition went up 203 percent and has become the highest among Southern Regional Board states. The additional cuts in Governor Bevin’s budget are expected to lead to more tuition increases as the state’s public universities and community colleges attempt to compensate for the lost state revenue.

It is important to note that as these cuts are being proposed, most all other states have begun reinvesting in higher education after cuts resulting from the recession, and two states — Tennessee and Oregon — are even offering free community college.

In this context, it is unfortunately not surprising the state lags behind in postsecondary degree attainment. Currently just 34.4 percent of adults 25 to 54 in Kentucky have an associate’s degree or higher, ranking the state 9th from the bottom on this measure.

Low-income students are bearing the brunt of these trends, and would experience the greatest hardship as a result of the governor’s budget proposal. Low-income students in Kentucky earn postsecondary degrees and credentials at particularly low rates. According to the Council on Postsecondary Education’s most recent accountability report, the bachelor’s degree attainment rate was 48.9 percent for all Kentucky students at four-year institutions in 2012-2013 — but just 36.6 percent for those with low incomes. In addition, the 2012-2013 graduation rate for all Kentucky students at the state’s two-year-degree-granting colleges — where many of the students are low-income community college students — was just 12.8 percent; the associate’s graduation rate for low-income students was 10.4 percent. Finances are typically the biggest reason community college students in Kentucky withdraw from school.

In the governor’s budget proposal, these low-income Kentuckians do not get any additional opportunities to receive need-based financial aid, which helps to offset the increased cost of college. As we’ve described elsewhere, the state’s need-based scholarship programs — the College Access Program (CAP) and the Kentucky Tuition Grant (KTG) — have not been receiving the full amount of lottery funding that was intended by law as millions of these dollars have been instead used to plug holes in the state budget. In 2015, an estimated 15,000 students who were eligible for financial assistance but were turned away due to lack of funds would have received need-based scholarships if the money had not been swept.

According to the proposed budget, more money than ever would be diverted from CAP and KTG: $35 million in 2017 and $38 million in 2018; in this case the funds are largely going to a workforce development scholarship for which details have not yet been provided. This represents roughly 20,000 students in each fiscal year that will not have access to need-based aid because of the money being moved. Need-based aid has been shown to incentivize college enrollment and persistence for low-income students, which is why these scholarships are such an effective investment.

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