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I think this is a great idea, for one reason that is obvious, and for another that might be less so.

The obvious reason is that we have a public university system (note that the university’s name for the program harkens back to the “land grant” nature of Mizzou) to provide higher education to bright students who might not otherwise be able to afford it. This intuition is not new in America.

Thomas Jefferson, the father of the University of Virginia, himself wrote of students:

“that they should be called to that charge without regard to wealth, birth or other accidental condition or circumstance; but the indigence of the greater number disabling them from so educating, at their own expence, those of their children whom nature hath fitly formed and disposed to become useful instruments for the public, it is better that such should be sought for and educated at the common expence of all, than that the happiness of all should be confided to the weak or wicked.”

As college costs increase, our universities are pricing out many students who would thrive at them, but simply cannot afford the skyrocketing tuition. This program will work to solve that problem and we should laud it for that.

But the second reason why this program is a great idea is subtler.

In the past, efforts to try and help low income student attend college have had unintended consequences. Typically, states and the federal government have given low-income students scholarships, like Pell grants, or subsidized loans to help defray the cost of education. In response, many universities started to “price” these scholarships into the cost of tuition, banking on the fact that students will automatically be able to pay it, and this has driven up the cost of schooling.

Mizzou’s program is different. Rather than rely on outside funding, Mizzou is footing the bill itself. That means that any increase in the cost of providing an education is borne by Mizzou. This should provide a powerful disincentive for the school to become more expensive.

Now, the devil is always in the details, and the program isn’t launching for another school year, so we won’t know the full scope and effect of the program for some time. But if programs like these are representative of the type of bold thinking that university leaders are engaging in, Mizzou is putting itself on a much better path into the future.

The post It’s a Good Idea for Mizzou to Cover Tuition for Low-Income Students, but the Reason May Surprise You appeared first on Show-Me Institute.

Tuition revenue is a huge part of Mizzou’s operating budget, as are Pell Grants and other forms of state and federal support that are directly linked to the number of students who enroll. Huge declines in enrollment mean huge declines in tuition, which mean huge declines in funding and serious ramifications for the university’s operations.

Already the university has closed seven residence halls. The University of Missouri system as a whole is looking at 8 to 12 percent budget cuts.

There is not a lot to say at this point, to be quite honest. As I wrote over a year ago, actions have consequences, and we are continuing to see them play out today. Students have more and more choice in where they spend their college years, and Mizzou isn’t guaranteed students. It desperately needs to change its image and reform its operation.

One thing I will say is that we are rapidly moving out of tinkering-around-the-edges territory. Continuing to lose students at this rate means a fundamentally different university in a few short years.  While I certainly appreciate president Choi offering ideas like free open source textbooks as a way to decrease costs, it’s going to take more than that to right this ship.  It’s time for some fresh thinking. I hope we get it.

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The A-Plus program currently grants over 13,000 scholarships to Missouri community college students.  To be eligible, students need to attend a community college or vocational school, must have graduated from a Missouri high school with at least a 2.5 GPA and 95% attendance, and have completed at least 50 hours of community service.  The cost for the program in 2014–15 was more than $33 million.

At slightly more than $2,500 per student, this may seem like a good deal, until we see exactly what we are getting for our money. A forthcoming study in the Journal of Higher Education by scholars at the University of Missouri, for example, finds the A+ program increased “two-year college-going rates by 5.3 percentage points.” This gain, however, was nearly offset by a 3.8 percentage point decline in the number of students attending four-year institutions.  While this is not entirely bad, it is a far cry from a “bright shining light.” If the goal is to get more students into college, we are not seeing much bang for our buck.

There is no question that college costs have been spiraling out of control.  According to the College Board, the cost of public, two-year college has more than tripled in inflation-adjusted dollars since 1975. It has almost quadrupled at public four-year colleges. Middle class families are feeling the squeeze. They want their children to get good jobs, which increasingly require a college degree, but cannot afford the skyrocketing prices. 

Some politicians are tapping into those fears and proposing plans, like the A+ scholarship, that would make some or all of college “free.”  But here is the dirty little secret about “free college” plans. They don’t actually make college free. They simply shift who pays for it.

We have a college cost problem. Just changing who pays that cost doesn’t make it any less of a problem.  We should be talking about ways to rein in the cost of college, like promoting greater transparency of results and breaking up the accreditation cartel that keeps out new, lower-cost providers. We should also make universities that accept public scholarship dollars have some skin in the game, and require them to pay the state back some portion of those dollars if students do not succeed.  Andrew Kelly at the Center on Higher Education Reform at the American Enterprise Institute has written volumes on how to accomplish this.

These reforms would actually help drive down the cost of college and help the state strategically use its scholarship dollars to promote real student success.  That, not revolving-payer shell games, is what we can do if we really want to help our students.

The goals of Missouri’s A+ program are certainly commendable, but that does not make the program a model for the nation. We’re not even confident that is the right model for Missouri. 

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There have been a slew of common-sense, market-oriented reforms that have been floated to help rein in the cost of college. No, not just making it “free.” Rather, opening up the college market to more experimentation, innovation, and competition to help hold prices in check.

In general, these reforms have gone nowhere. Why? Well, a new data visualization by Washington D.C.’s New America Foundation puts some great numbers to what  my old friend Andrew Kelly of the American Enterprise Institute has been arguing for years; college and universities are enmeshed in the economies and political ecosystems of the state and nation. That gives them an incredible amount of power to block or water down efforts to spur competition and reform.

New America breaks down the number of institutions, the number of employees, the amount of money institutions receive in Pell grants (federal scholarships for low-income students) and the total amount of money institutions spend by congressional district.

Here’s what Missouri looks like:

Seventy thousand employees, nearly $10 billion in spending, and $685 million straight from the federal government . . . who wants to upset that apple cart? Somebody needs to, because the current trends are unsustainable.

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 A significant number” of districts have agreed to reduce the tuition costs for transfer students to about $7,250, said Don Senti, executive director of EducationPlus, an organization of area school districts that has coordinated the transfer process for the past two years. That is the same amount most districts charge St. Louis Public Schools for transfer students under the voluntary desegregation program. In the past, tuition rates have ranged from $20,768 in Clayton to a low of $7,927 in Mehlville.

I am very pleased that the school districts have decided to take this step. Actually, I’ve been saying this action was possible all along. Back in January 2014 I wrote:

 Many have lamented that the inter-district transfer law, which allows students to transfer from unaccredited public school districts to nearby accredited districts, may bankrupt failing districts. Normandy and Riverview Gardens, the two unaccredited districts currently allowing students to transfer, are already seeing financial hardship, and reports indicate that Normandy could be bankrupt by the end of the school year. This has occurred because the districts are paying tuition rates that are often in excess of what the districts spend on their own students. This has led some to clamor for a set tuition rate. In a recent position paper by the Cooperating School Districts of Greater St. Louis, area school superintendents stated, “If transfers are made between school districts then a regional tuition rate should be determined.” The interesting thing is that nothing is stopping area school districts from charging a lower tuition rate now. Each district, with a vote of its school board, could decide to set a lower, consistent tuition rate. To date, none of them have. Instead, school leaders are asking for more state government action. This is the very problem that plagues our society in so many regards; instead of taking initiative and fixing a problem ourselves, we allow or we seek greater government involvement. The next time you hear a school leader complain about the transfer situation and how it may bankrupt unaccredited schools, ask him or her what his or her district is doing to help. Are these leaders taking action locally, or are they requesting a solution from Jefferson City?

Eighteen months ago school leaders scoffed at my idea. They wanted a legislative fix. They wanted to stop the transfer program. What changed? Now, area school leaders are acting to stop a legislative fix. The current bill sitting before the governor would improve Missouri’s charter public school law and allow for broader establishment of virtual schools. Eighteen months ago, the education establishment rejected the idea of lowering tuition because they wanted the legislature to maintain the status quo. Today, the education establishment welcomes the idea of lowering the tuition because they want to avoid the legislative fix and maintain the status quo.

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In a recent position paper by the Cooperating School Districts of Greater St. Louis, area school superintendents stated, “If transfers are made between school districts then a regional tuition rate should be determined.” The interesting thing is that nothing is stopping area school districts from charging a lower tuition rate now. Each district, with a vote of its school board, could decide to set a lower, consistent tuition rate. To date, none of them have. Instead, school leaders are asking for more state government action.

This is the very problem that plagues our society in so many regards; instead of taking initiative and fixing a problem ourselves, we allow or we seek greater government involvement.

The next time you hear a school leader complain about the transfer situation and how it may bankrupt unaccredited schools, ask him or her what his or her district is doing to help. Are these leaders taking action locally, or are they requesting a solution from Jefferson City?

The post A Lower, Consistent Tuition For School Transfers Is Possible Without The Legislature appeared first on Show-Me Institute.

In a recent Saint Louis Beacon editorial, I noted that budget decisions have reduced funding for higher education. Spending on higher education has declined in real terms since 1990. This has had several effects, including forcing Missouri universities and colleges to raise tuition. It also has affected the educational accomplishment of the average Missourian.

How does Missouri stack up when compared to other states in educational achievement by its citizens? In 2008, Missouri ranked 33rd out of the 50 states using the statistic “percent of adults having a bachelor’s degree or more.” Don’t like “number of degrees” as a measure of what you have learned? Using standardized test scores (the National Assessment of Educational Progress, or NAEP) as a measure of educational attainment, Stanford University professor Eric Hanushek recently reported that since 1992, the gain in NAEP test scores for Missouri relative to other states is unimpressive.  On this score, Missouri ranks 27th out of 41 states for which data are available.

Missouri’s lackluster educational record is one of several factors that has negatively affected our economic standard of living. In a 2012 Show-Me Institute study, SMI economists Joseph Haslag and Michael Podgursky reported that Missouri’s economy expanded at a slower pace than any of its neighbors since 1997. Compared to all 50 states, Missouri ranked 48th in terms of economic growth. Even in a world of social promotion, this is not a passing record of achievement.

Nixon has called for additional funds for higher education in the fiscal year 2015 budget. Whether these funds survive the political battlefield and find their way to colleges and universities is a dubious proposition. Nor do I mean to suggest that simply throwing more dollars at education is the answer to improving the situation. One thing is certain, however: Unless Missouri’s educational report card improves in the coming years, do not expect to experience an economic boom any time soon.

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On Tuesday morning, the Show-Me Institute was pleased to host “Solutions: A Panel Discussion on the School Transfer Law.” Joining me on the panel were the superintendents of three area school districts that the school transfer law has greatly affected: Tyrone McNichols, Ed.D., of Normandy, Thomas Williams, Ph.D., of Kirkwood, and Eric Knost, Ed.D., of Mehlville. We all agreed that the current situation is untenable. In fact, there was quite a bit of agreement on what needs to be done going forward, with one major exception.

Areas of Agreement

Tuition Payments:

All four of us agreed that the tuition payment system must be fixed. Currently, the unaccredited districts must pay tuition rates that sometimes exceed what they spend on their own students. For instance, McNichols stated that his district spends approximately $12,000 per pupil, but tuition in the Clayton School District is more than $19,000. Clayton is an outlier; several districts spend less than Normandy. Still, it is unreasonable to expect Normandy and Riverview Gardens to shell out more in tuition than they receive to educate their students.

Enrollment Caps:

Williams noted that his district has participated in a voluntary transfer program for years. In that program, the tuition amount was set at about $7,000. Participating districts could decide how many spaces they had and they could accept students to fill those spaces. The Kirkwood superintendent noted that a class with 19 students could add one more at no additional expense to the district and would actually benefit from the transferring students. He meant that the marginal cost of one additional student is very low. Most superintendents recognize that their districts benefit from tuition-paying students. They are concerned, however, when they have no reasonable control on the number of students that will be admitted to their district. This is a concern I share.

Area of Disagreement

At one point, Knost stated that the Missouri Legislature should address the issue and leave aside unrelated pieces of legislation. Some might think that a private school choice program is unrelated to the issue of school transfers. However, I don’t see a tax credit scholarship program as unrelated. Rather, I think it is a particularly relevant solution to the problem we are facing in Saint Louis.

A tax credit scholarship program would:

1. Lessen the financial strain on the unaccredited school districts;
2. Ease the burden on accredited districts; and
3. Give families more options.

Though we may have had some disagreement about a private school choice program, there was general agreement that students deserve to have quality options. In fact, I wish more school leaders would have the attitude that Williams expressed. He said if students are going to have options, he wants his district to be the best option. That is the type of thinking we need.

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Take, for example, the Tiger Grotto at Mizzou. It was part of a $50 million recreation center that opened in 2005, paid for by an extra $75-per-semester fee for every student taking more than six credit hours, regardless of usage. The Grotto features palm trees, a heated spa, a lazy river, and an oversized big screen TV, all of which caught the attention of Sports Illustrated in 2005 and won Mizzou the title of Best Rec Center in the Country. For additional charges, students can also sip smoothies poolside at the outdoor Truman Pond or, since 2006, enjoy services like facials and manicures (even teeth whitening and tanning). According to the MizzouRec website, “the Grotto will transform your dullest day into a vacation,” and they proudly promote its “resort quality facilities.” It sounds like Missouri students are paying for a nine-month stay at a Sandals Resort instead of for a top-flight education.

Projects like Tiger Grotto show just how extravagant modern colleges and universities have become. Addressing the rising cost of higher education should perhaps begin with a reassessment of what purpose a university should serve, and whether that purpose is best achieved with flat screen TVs and spa days. Perhaps more funding for the classrooms and less funding for facilities that house smoothie-fueled tanning sessions would solve a few problems that face Missouri’s higher education system. Cutting projects like Tiger Grotto, which drive up student fees, would help keep costs manageable for students as state funding decreases. This whole process would help move higher education in Missouri closer to a model where students pay the true cost of attending college.

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Due to faulty electrical outlets in the home’s bathrooms, Laura said that they are forced to dry their hair in the kitchen, and with the extra money needed to pay for college, they will be forced to continue this practice. Laura also said that the family may have to forego putting new tires on their son’s car. It is not difficult to imagine the unnecessary worry this young man’s parents will feel when their son drives to and from Columbia on old and worn out tires, especially if it is raining or snowing.

While the University of Missouri raises tuition on families such as the one described above due to state cuts in higher education funding, historic tax credit authorizations in Missouri are on an upswing. In fact, the $91 million in Historic Preservation tax credits authorized in the first six months of fiscal year 2012 have almost surpassed state estimates for Historic Preservation authorizations for the entire year.

The question should be asked whether handing out tax credits of questionable value (like the $1 million tax credit issued to Norwood Hills Country Club)  is worth more to the citizens of the state than preventing a tuition increase that will affect families across the state.

Considering that the state of Missouri faces a large budget shortfall, it would behoove the state to make sure that, at the very least, tax credits go to worthwhile projects. A possible avenue for oversight of the tax credit system would be to subject tax credits to the appropriations process. Missouri Sen. Jason Crowell (R-Dist. 27) has submitted a bill (SB 436) that does just that, and there are items in the bill that deserve commendation. Subjecting tax credits to appropriations would enable the state to keep closer tabs on these programs and help ensure that questionable issuances are examined. Considering the price that all Missourians pay for these tax credits, is subjecting tax credits to some sort of appropriations process too much to ask?

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The friendliness and charity of our countrymen can always be relied upon to relieve their fellow citizens in misfortune. . . . Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood.

Although Cleveland was talking about federal aid during a drought, the lesson is applicable to our current situation: Charity should be preferred over taxes. After all, taxes do not lend themselves to a “kindly sentiment.” And is charity such a radical option? Don’t universities already receive such donations? It seems that if the state believes citizens want to support universities, the government should let the people voluntarily display their support.

But suppose charity falls short – what then? Tuition increases should be considered. After all, let’s not forget that students are the ones choosing to attend college. When the price of education goes up, there is nothing wrong with charging a higher fee. And for those who cannot afford the higher fee, there are alternatives: scholarships and student loans. If both those options do not work, there is the alternative of a less costly education at a community college. Finally, if all else fails, college can be deferred. I have known several individuals who have put off college in order to accumulate savings for it. All options should be exhausted before reaching into the public purse.

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