College Unaffordability Is Hurting the “Public” in Public Universities

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College Unaffordability Is Hurting the “Public” in Public Universities

By Kim Justice, Senior Budget Analyst, and Elena Hernandez, Policy Analyst - May 13, 2015

Cuts to funding for public colleges and universities since the recession have led to huge jumps in tuition nationwide. Washington state, unfortunately, ranks third in the nation for the largest average tuition increase, according to a new report from the Center on Budget and Policy Priorities. Average tuition has ballooned by nearly 60 percent – or about $4,000 since 2008, adjusted for inflation.

College affordability is essential for our state to develop a skilled workforce for Washington’s businesses. To get the price of college back within reach for more Washingtonians, significant investments need to be made in the yet-to-be approved budget.

Washington state has begun to take small steps to restore funding to its universities and colleges (0.3 percent over the last school year), but funding nevertheless remains 28.4 percent below pre-recession levels. As a result, the majority of the cost of college has shifted from states to students and, in many cases, their families (see figure below).

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Meanwhile, family incomes have stagnated or fallen. Rising tuition combined with falling incomes make it less likely that students will attend college or complete a degree. While the rise in tuition has impacted all Washingtonians, it has been particularly burdensome for students of color, who are disproportionately lower income. Currently, tuition at a public, four-year university in Washington can be as much as 26 percent of household income for Black, American Indian/Alaska Native, and Latino students (see figure below).

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The choices our legislators make in the state budget will determine whether or not college remains within reach for Washington’s students. The House and Senate both propose investing more into higher education, but they have different approaches for how to use the resources. The House would use state investments to hold the tide on further increases in tuition over the next two years while also expanding student financial aid through the State Need Grant (SNG).

The Senate proposes to decrease college costs by pegging tuition to a percent of the state’s average wage. For example, the average wage for fiscal year 2016 is projected to be $52,635. For the University of Washington, tuition for resident undergraduate students in that academic year would be set at $7,369, or 14 percent of the average wage (1). However, there’s a huge flaw in how the Senate would pay for the tuition decreases – it would do this, in part, by cutting financial aid. This proposal would  benefit middle- to higher-income families, as it would trim costs at the most expensive schools. But it would make it harder for many students who rely on financial aid.

Despite the contrasting proposals, it’s certainly a good thing that legislators are debating the best ways to make college more affordable. It’s the right conversation to be having. But when addressing cost, lawmakers must make sure that college is accessible for students with a range of income levels, especially for those with lower incomes who face the biggest hurdles. As such, freezes or reductions in tuition need to be paired with investments in the State Need Grant, our primary tool to open the door to college for students with lower incomes. Currently, about one third of students who qualify for the SNG (over 30,000 people) are unable to receive aid because of a lack of funding. Expanding the SNG, as the House proposes, is the right thing to do for thousands of aspiring students.

State investments in higher education are needed to build a strong middle class and an economy that is fueled by skilled workers. But the resources to make these investments don’t exist under our current revenue system. Raising new revenue through a capital gains tax and closure of unproductive tax breaks, as the House proposes, need to be part of the final budget.

To read the full Center on Budget and Policy Priorities report and see how our state compares to other states with better revenue systems, click here.

1. Senate Bill 5954 fiscal note