Why the Budget Matters: Way No. 2 — Higher Education

Stephen Herzenberg |

The Pennsylvania Budget and Policy Center launched Why the Budget Matters – Let’s Count the Ways to compare specific funding choices and priorities in the budget Gov. Wolf unveiled in March and the Republican budget (HB 1192). This series lets Pennsylvanians count for themselves the many ways that a sustainable investment budget will positively impact real people.

Way No. 2: Higher Education Funding

Wolf Budget Would Help Stem Higher Education Tuition Hikes

Republican budget would continue PA’s underinvestment in higher education, sabotaging opportunity, long-run growth and quality of life

For decades, Pennsylvania has chronically underfunded higher education, crushing students with heavy debt burdens and undermining their future opportunities as well as the state’s economic growth and quality of life. The Republican budget would continue this destructive pattern because it would increase state funding for two- and four-year colleges by only $36 million, barely compensating for inflation and making up little to no ground after the deep funding cuts in 2011. This increase is only about two-thirds as big as the increase in funding the Republican budget proposes for the legislature ($51.5 million).

In comparison, the Wolf budget would increase funding for higher education nearly four times as much ($141 million). It would reverse, over a two-year period, the deep 2011 funding cuts. This increase would give the state a chance to develop a long-term bipartisan plan to reinvest in higher education, including in underserved rural regions.

For a comparison by legislative district of the impact of the two budgets click here.

Across the nation, student loan debt is now a staggering $1.2 billion. In Pennsylvania, college graduates’ debt averages $32,528, third-highest among the 50 states. “Pennsylvania stands out, in that public college graduates have about the same amount of debt, and are more likely to have debt, than private college graduates,” says Debbie Cochran, research director of the Project on Student Debt. Pennsylvania also ranks low among states – 41st for the share of the adult population with at least some college education.

As PBPC reported last October, high student debt and low educational attainment reflect paltry state funding: Pennsylvania ranks 48th among states for higher education funding per capita. Pennsylvania has long ranked low on this measure yet still implemented a 12% reduction since 2010, the fifth-largest cut nationally.

Given strong evidence that higher education fuels opportunity for individuals and growth for regions, Pennsylvania’s underinvestment is short-sighted. College graduates typically earn more and have much lower levels of unemployment.

Growing student debt exacerbates the extent to which underinvestment in higher education undercuts growth, opportunity and quality of life. Mitch Daniels, president of Purdue University and the former Republican governor of Indiana, notes that student debt is “postponing marriage, childbearing and home purchases, and … limiting the percentage of young people who start a business or try to do something entrepreneurial. … Every citizen and taxpayer should be concerned about it.”

Researchers at the Federal Reserve Bank of Philadelphia and Penn State recently documented that more student debt led to fewer small businesses being formed. High student debt also undermines quality of life and the social fabric by leading more people to choose jobs that pay the bills instead of the pursuit of mission-driven careers.

Pennsylvania’s public four-year State System of Higher Education (SSHE) colleges pledged to freeze tuition for 2015-16 if the legislature enacted the funding increase in the Wolf budget proposal. When that budget was not passed, however, SSHE colleges increased tuition by 3.5%, a $240 increase for about 100,000 students.