The wide-ranging options of higher education have served the residents of Pennsylvania well for many years. Just about anywhere in the commonwealth, residents can choose from community colleges and trade schools to public and private universities to advance their educations and opportunities in life.
Government leaders recognized the importance of the more than 90 private colleges and universities in the state in 1974 with the creation of the Institutional Assistance Grant (IAG).
Sadly, the proposed state budget for fiscal 2017-18 cuts IAG funding by $13 million, generating modest savings in a move that I believe is contrary to the best interests of students and taxpayers.
The allocation of IAG funds to private colleges and universities is based on the number of low- and moderate-income students they serve. Therein lies the beauty of this funding mechanism: Spending on IAG for private higher education has a means test to assure that these institutions provide access that benefits the public good.
This access works. Private higher education enrolls 42 percent of all Pennsylvania college students and awards 49 percent of all degrees - confirming that a student is more likely to graduate when enrolled in these schools. These colleges and universities accomplish this while receiving only 11 percent of state spending on higher education through IAG and grants provided directly through student enrollment. Clearly, private higher education is a bargain for both taxpayers and students who want to enroll and get a degree on time.
Pennsylvania has more than 244,000 students who received federal financial aid in the form of Pell Grants in 2016-17. The total value of those grants spent in Pennsylvania approaches $900 million. An additional 59,000 students receive federal supplemental educational opportunity grants and work study funds, adding about $85 million to support spending in the commonwealth.
The combination of federal and state support to students from low- and modest-income families is an investment in our collective future. To reduce state funding that risks receipt of federal funds in support of Pennsylvanians appears to be a shortsighted approach to budget balancing.
The budget proposal suggests these institutions should replace the funds cut from the state budget. It does not point out clearly that funding cuts in 2008-09 reduced IAG by 28 percent, and an additional 19 percent in 2011-12. As private higher education obtains the majority of its revenue from students and their families, cutting IAG yet again would increase their financial burden.
In essence, we are funding the public good aspect of higher education more and more with private funds. Taxpayers understand they are paying to support the public good, so it makes sense that a program such as IAG, which provides that benefit at a lower price than other routes, should be sustained.
Pennsylvania faces a deep structural and ongoing deficit. No doubt, we need to move toward a balanced budget. But it is poor policy to reduce proven options for students that lead to successful careers and enhance the civic and economic vitality of our state.