Op-Ed: Budget Options Make Higher Education Harder to Afford for Those Who Need It Most

By Ashley Spalding
March 25, 2014

Lack of state revenue is chipping away at the progress Kentucky made in higher education beginning in the 1990s. That trend continues in the new budget being developed. More cuts to community colleges and adult education programs, inadequate funding of need-based financial aid, and new fees for community college students will harm those most in need of education beyond high school and threaten future economic growth.

Yes, the Senate budget freezes funding for Kentucky’s public universities rather than cutting them as the House proposed. However, the budget retains the House’s 2.5 percent cut to the state’s community colleges and 5 percent cut to adult education programs that help Kentuckians without a high school credential improve literacy skills and earn a GED. It would seem that the less education one has the more support one needs, but those priorities are flipped in the Senate’s plan.

These budget decisions are on top of round after round of previous cuts. Between 2008 and 2013, Kentucky’s public universities and community and technical college system were cut by 23 percent—and adult education by 22 percent—in inflation adjusted terms. Even with the Senate’s proposal to maintain current appropriations for public universities, funding levels will not cover the growth in fixed costs for these institutions. And the proposed cuts from the Senate and the House to the community college system would affect about half of students who attend public higher education institutions in Kentucky—and typically those who are least able to afford college.

Because of cuts to higher education, tuition at Kentucky’s higher education institutions has more than tripled since 1998. The new budget also includes added fees for community college students to pay for construction projects that could amount to $480 more for a student earning an associate’s degree. Tuition at Kentucky’s community colleges is already higher than the national average for community colleges, and finances are the leading reason Kentucky Community and Technical College students report withdrawing from school.

At the same time costs are rising, state and federal need-based aid—which has been shown effective at increasing enrollment, persistence toward a degree and number of credits earned for low- and moderate-income students—has become increasingly limited. In 2012-2013, two-thirds of students—or 76,200—who qualified for Kentucky’s need-based College Access Program (CAP) were denied aid due to lack of funds. Part of the problem is that since 2009 a growing amount of lottery money designated by law for the state’s need-based financial aid programs has instead gone to fill holes in the budget. While the Senate’s budget adds $750,000 a year to CAP, this covers only a tiny amount of the unmet need.

Federal need-based Pell grants help far less than they once did. While in the 1970s Pell covered nearly 80 percent of tuition, fees, and room and board at public four-year institutions, today it pays for less than a third of these costs.

Inadequate investment in postsecondary and adult education jeopardizes the ability of many Kentuckians to earn the degrees and credentials necessary to make a better living. An estimated 62 percent of jobs in Kentucky will require some postsecondary education in 2020. Meanwhile, Kentucky’s educational attainment rates are near the bottom compared to other states—with just 32 percent of adults age 25-54 holding an associate’s degree or higher, and 54 percent of adults having either just basic or below basic literacy levels. There are also more than 374,000 adults age 18-64 without a high school credential in Kentucky.

Budget cuts are driving up student debt, which can have lasting impacts on economic well-being—preventing or delaying buying a home, starting a small business or saving for retirement. Especially harmed are disadvantaged Kentuckians, and we are seeing a growing gap in educational attainment between low-income students in Kentucky and everyone else. The higher education system is either losing ground or failing to make progress on various indicators of the graduation gap between low-income and other students.

The road we are on is one of rising personal debt, growing inequality and stunted economic growth. It’s time to get serious about additional revenue through tax reform in order to reverse this harmful course.

Ashley Spalding is a research and policy associate at the Kentucky Center for Economic Policy.