Illinois Budget Battle Jeopardizes College Access and Affordability
The future of public higher education is on shaky footing in Illinois. As a budget impasse that froze all state funding to higher education enters its ninth month, public colleges have sent layoff notices to hundreds of employees and received substantial credit downgrades from Moody’s Investors Service. One institution even went so far as to cancel its spring break so that it could end the school year before it ran out of money. If left unresolved, this budget battle will be the final nail in the coffin of affordable public higher education in a state that has been undermining its public colleges for years. It is also proof yet again that states should not be left to their own devices when it comes to higher education funding.
Budget impasse froze operating support and financial aid in Illinois
The budget problems started in early 2015 when Illinois Gov. Bruce Rauner (R) introduced his fiscal year 2016 budget, which slashed higher education funding by nearly one-third, among other changes. The resulting holes in colleges’ budgets almost certainly would have been made up through massive tuition hikes for students. Both state chambers quickly rejected the budget, but the governor and legislature have not yet been able to come to a consensus. For Illinois public colleges, the resulting budget freeze is potentially catastrophic. The schools are functioning without more than $1 billion in expected operating support.
State operating support is not the only type of higher education funding being held hostage. Funding for the Monetary Award Program, or MAP, which provides grants of up to nearly $5,000 for about 150,000 low-income students each year, remains frozen as well: While Gov. Rauner’s proposed budget did not cut the program, funding is nonetheless on hold until the state passes a formal budget. Many colleges managed to cobble together funds to cover MAP grants for students through this school year’s first semester. As the impasse wears on, however, many can no longer do so, leaving students without financial aid. MAP grant funding accounts for another $300 million in missing state funding.
Illinois’ budget problems are the latest in a line of poor decisions
While the proposed cuts to higher education funding are bad news for Illinois colleges, they are all the more painful because they come after years of other poor higher-education funding decisions. If enacted, the cuts would be the final straw, dismantling college access and affordability for years to come.
First, the proposed cuts follow a shift away from institutional operating support, which has increased tuition. While the state did not cut funding outright before this year, a greater share of funding has gone toward pension payments since 2011; this means that less is being spent on subsidies that help institutions keep prices low. For example, in 2008, 88 percent of higher education funding went to operating support for institutions and 12 percent went to pension plans. By 2015, 60 percent went to operating support for institutions while 39 percent went to pensions. That is $450 million less per year for colleges. In turn, institutions have filled the gap by raising tuition 56 percent over the past decade. At more than $13,000 per year, Illinois now has the fourth-highest four-year public tuition in the country.
Second, the MAP grant has lost both its purchasing power and its reach. While tuition continues to rise, the maximum grant award has not changed in 14 years. As a result, the average grant, which covered full tuition and fees in 2002, now covers only one-third of these costs. The program has also been nearly flat funded since 2002 while the number of students eligible for the grant has almost doubled. Today, only half of eligible students who apply receive an award. In contrast, the program had enough funding to serve almost every student in need in 2002. A grant that used to cover most costs for most students now leaves half without enough money and the other half with nothing.
States that cut higher education funding do not fare well
Sadly, Illinois is nothing more than an extreme example of a common trend among states. Over the past decade, a national trend of gutting state funding for higher education was one of the leading factors behind rising tuition and high student loan debt—often at the expense of low-income students and students of color. The example of Louisiana shows how Illinois’ actions have put it on a devastating path. Louisiana, the state with the greatest cuts to higher education, saw public tuition rise 140 percent after making steep cuts to college operating support over the past eight years. Since then, the share of students attending public four-year schools has dropped, and black student enrollment has plummeted.
Signs of such trouble are already evident in Illinois. For example, an Illinois Student Assistance Commission report found that both dropout rates and student loans are growing. From 2004 to 2014, average debt among four-year college graduates who borrowed in Illinois grew from $15,000 to $29,000. Graduation gaps by race and ethnicity, already sizable, have also gotten slightly worse. In 2002, white students at public colleges graduated at a rate 28 percentage points higher than that of black students. By 2012, that gap grew to 30 percentage points.
Fixing this crisis will not be easy. Passing a budget and restoring funding to Illinois colleges is a must. But even if Illinois were to pass a budget and restore MAP funding tomorrow, broad access and affordability are now just ghosts of the past. Funding would not be enough to restore previous levels, undo earlier tuition increases, or provide financial aid to every low-income student in need. Future cuts are almost certain. Gov. Rauner’s fiscal year 2017 budgetproposes an additional 20 percent cut to the sector.
More broadly, the issue of repeated draconian cuts to higher education cannot be litigated on a state-by-state basis. While the specifics of this situation may be unique, Illinois provides yet another piece of evidence that states left to their own devices on postsecondary education support do not fare well. The current system makes it too easy for states to pull funding from colleges, leaving students to bear the burden of increased prices. The federal government needs greater leverage to step in and hold states accountable when they abandon responsibility for their colleges and students. Absent federal pressure, states will continue to gut their higher education systems time and again, limiting opportunity for the students and families that need it most.
Antoinette Flores is a Policy Analyst on the Postsecondary Education Policy team at the Center for American Progress.
Posted on 5 April 2016
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