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School Choice & Charters

Colo. Approves Higher Education Vouchers

By Sean Cavanagh — May 05, 2004 5 min read
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Colorado legislators have approved a first-in-the-nation program that will give high school graduates vouchers to pay for college tuition and make sweeping changes in how the state finances higher education.

The plan won legislative approval last week and now awaits the signature of Gov. Bill Owens, a Republican and a supporter of the measure.

Known as the College Opportunity Fund Act, the initiative redirects how universities receive millions of dollars in state aid. Currently, the bulk of the funding for higher education is appropriated by the legislature to Colorado’s 13 state college and university systems.

Under the new plan, a big chunk of that money will go directly to undergraduate students in the form of $2,400 yearly vouchers that each student could redeem at a public college or university.

Some observers see Colorado’s plan as a more market-driven approach, in which institutions will depend more on attracting students to generate revenue. Supporters say the model will ultimately increase universities’ funding stability and encourage more in-state students to attend college.

The plan appears to differ from many state financial-aid programs in that it offers a stipend to all in-state students, rather than making awards based on household need or academic merit, said Patrick M. Callan, the president of the National Center for Public Policy and Higher Education. Georgia’s popular HOPE Scholarship, for instance, rewards students with strong academic credentials with free tuition at any in-state public institution.

But Mr. Callan questioned how strong an incentive Colorado officials would have to hold down tuition, knowing that students were each guaranteed a $2,400 yearly voucher.

“It’s an interesting approach, but I’m not sure the same short-term benefits will be there for students as there are for universities,” said Mr. Callan, whose research center is based in San Jose, Calif.

In- State Tuition

A bill creating the plan passed the Colorado House by a 40-23 vote on April 27 and the Senate by a 22-13 majority the same day. The measure will not require a new spending allocation.

All Colorado high school graduates accepted to one of the state’s 28 public community colleges and four- year institutions will be eligible for the vouchers, beginning in the 2005-06 academic year.

As in many states, the Colorado legislature now distributes money to university systems after reviewing yearly budget requests. The state’s fiscal 2004 higher education budget is $592 million, a 23 percent decrease since 2002, according to the Colorado Commission on Higher Education.

Colorado universities’ funding requests have been limited by a constitutional stipulation known as the Taxpayer’s Bill of Rights, which restricts the rate at which state agencies can grow, and by Amendment 23, which directs specified amounts of state funding to K-12 schools. The college voucher plan allows state institutions to be reclassified as exempt from the constitutional caps, under state law.

Undergraduates will be required to apply for the vouchers each year. Their aid will be overseen by the Colorado Student Loan Program, which will allow institutions to draw from student accounts to help cover the students’ tuition costs.

Supporters predict the voucher plan will help correct what they see as a long-standing problem: Too few Colorado high school graduates are going to college, compared with many other states, they say.

The voucher plan “will make the idea of going to college more tangible for them,” said Dan Hopkins, a spokesman for Gov. Owens.

The vouchers would cover just over half of the $4,022 in-state tuition at a four-year school like the University of Colorado at Boulder, where the university estimates that total costs for this academic year, including on-campus room and board, are $15,179.

A Few Private Colleges

When the measure takes effect, undergraduates now enrolled in public institutions will also be eligible for the stipends, said Jennifer Nettersheim, the spokeswoman for the Colorado Commission on Higher Education, which supports the plan. Each year, Colorado legislators will have the power to adjust the $2,400 amount.

Students’ eligibility for other state and federal college aid will be unaffected by their receipt of the vouchers, Ms. Nettersheim said; nor is funding for existing state aid programs altered by the plan. Students will be eligible for vouchers until they have completed 140 credit hours—roughly five years of study, Ms. Nettersheim said.

Students attending three private postsecondary schools in the state—Colorado College in Colorado Springs, Denver University, and Regis University, in Denver—will be eligible to receive $1,200 yearly stipends. Those undergraduates will have to be eligible for the federal Pell Grants program, however, to qualify.

Some critics question the constitutionality of devoting voucher money to private schools. But Ms. Nettersheim is confident the plan would stand up to legal scrutiny. Last year, Colorado lawmakers enacted a K-12 voucher plan, which is on hold because of a legal challenge. (“Colo. Judge Puts State’s Vouchers on Hold,” Dec. 10, 2003.)

Colorado’s plan is the first in the nation to take state appropriations from universities and redirect them to individual students, according to Christine Walton, an education policy associate with the Denver- based National Conference of State Legislatures.

Colorado’s planned program will be closely watched by other states, said Kenneth E. Redd, the director of research and policy analysis for the National Association of Student Financial Aid Administrators, in Washington.

He wonders, though, whether the voucher program will really fulfill the state’s goal of encouraging more students to think about college. “If anything, students will get the vouchers and say, ‘Why’s [the $2,400 amount] so small?’” Mr. Redd said.

But Ms. Nettesheim said the plan will give lawmakers an incentive to provide Colorado’s universities with necessary funding, which will ultimately help students.

“We’re hoping that with this approach, the legislature will look at state funding and see [the needs of] a student, not an institution,” she said.

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