Published Online: February 25, 2008
Published in Print: February 27, 2008, as HEA Proposal on College Costs Riles States

HEA Proposal on College Costs Riles States

House provision would cut some U.S. scholarship aid if they reduced postsecondary funding.

State policymakers are vehemently opposing a proposal in Congress that would require states to at least level-fund postsecondary education or risk losing federal aid for scholarships for low-income students.

Proponents say the provision would help curb college-tuition costs, which have soared in recent years. But critics say the measure would have the opposite effect, since state lawmakers would be reluctant to hike spending on higher education during flush years, for fear of losing federal dollars if revenues took a downturn.

The language was championed by Rep. John F. Tierney, D-Mass, a member of the House Education and Labor Committee.

The measure was included in the House version of a bill to reauthorize the Higher Education Act, which has been pending since 2003. The House approved the HEA bill on Feb. 7. ("House OKs Its Renewal of Higher Ed. Act," Feb. 13, 2008.)

The Senate’s version of the HEA bill, passed last summer, did not include the provision on state higher education spending.

“With tuition costs continuing to skyrocket, students and their families are still doing all they can to pay for college,” Rep. Tierney said in an e-mailed response to Education Week. “Meanwhile, states have not been consistent in their level of support for higher education, and such inconsistency appears to lead to tuition increases at public institutions.”

Scott Pattison, the executive director of the National Association of State Budget Officers, in Washington, said the measure could actually discourage state lawmakers from boosting funds for higher education, because they wouldn’t want to lose out on federal scholarship aid should they need to trim postsecondary spending later on.

“Our view is that there are tough choices to make in tough fiscal times,” Mr. Pattison said. “We don’t need any provisions like this that interfere with our ability to make those tough choices.”

‘Fiscal Duty’

The House provision calls for the states to finance higher education programs at levels that are equal to or greater than their average investment in postsecondary education over the previous five academic years. The provision excludes capital costs, as well as funding for research and development, from the requirement.

States that failed to comply could lose federal matching funds that help them provide college scholarships for low-income students, distributed under the Leveraging Educational Assistance Partnership. The LEAP program is receiving $63.9 million in fiscal year 2008 appropriations.

The bill would permit the U.S. secretary of education to provide waivers for states in extraordinary circumstances, such as a natural disaster or a severe, unforeseen decline in financial resources.

A number of groups representing state policymakers, including the Washington-based National Governors Association, the Denver-based National Conference of State Legislatures, and the Boulder, Colo.-based State Higher Education Executive Officers, sent a letter in January to the chairmen and ranking members of the House and Senate education committees opposing the provision.

The Senate and House versions of the Higher Education Act renewal will be reconciled in a conference committee. Sen. Edward M. Kennedy, D-Mass., the chairman of the Senate, Health, Education, Labor, and Pensions Committee, is examining the state higher education appropriations language, his spokeswoman, Melissa Wagoner, said.

David L. Shreve, the senior education committee director for the NCSL, said he found it ironic that the House provision seeks to use federal scholarship money as its “stick” to pressure states to spend money on higher education.

The bill would “penalize a state for doing its fiscal duty by taking the money away from disadvantaged kids that are trying to go to college,” Mr. Shreve said.

Still, a key student-advocacy group supports the language.

“Clearly one of the major players in higher education financing are states. And higher education is too frequently an item cut when budget times are tight,” said Luke Swarthout, a higher education advocate for the State Public Interest Research Groups, a student- and consumer-advocacy organization in Washington. He called the provision “an extremely modest effort” to get more stable funding for higher education.

Leveraging Action

Other federal legislation, including the No Child Left Behind Act and the Individuals with Disabilities Education Act, contain so-called “maintenance of effort” provisions requiring that states maintain a certain level of funding in order to continue receiving federal dollars.

But under those laws, the federal government is trying to ensure that states don’t use federal aid to supplant state funds, Mr. Shreve said. By contrast, the federal government doesn’t give much higher education money directly to states, he said. Most federal college aid goes to students, in the form of grants and loans, or directly to colleges.

The potential impact of losing a relatively small source of federal aid may not be enough to sway cash-strapped states. Federal LEAP dollars aren’t a substantial proportion of state funding for higher education, Mr. Shreve noted. Still, he worries that once Congress begins to legislate on state higher education appropriations, federal lawmakers might find a more dramatic way to leverage state action.

“They’ll find a way to make it more than a drop in the bucket,” he said.

Vol. 27, Issue 25, Page 19

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