State legislators can help those most affected with stimulus money for education. An Educated Investment

February 20, 2009

President Obama signed the stimulus bill on Tuesday, which includes $54 billion dollars of aid to states for education. How state legislators decide to allocate this funding will make a great difference in the ability of low and moderate-income post-secondary students to persist in their studies. Their decisions can also avert further declines in the resources available to the institutions where a majority of them enroll: community colleges.

Low and moderate income students are most sensitive to tuition and fee increases as well as to overall economic hardship. For this reason, state leaders should not treat all institutions in the same manner. In order to preserve access and affordability, policy makers should give community colleges the financial support they need to avert increases in their tuition. Students attending these institutions already receive lower amounts of federal, state and institutional funding, despite the fact that they have the least amount of resources to invest in their education . In the face of additional educational expenses, many of them will be forced to suspend their studies.

A new report by the Delta Cost Project, Trends in College Spending, further illustrates the negative impacts that additional cuts in funding to community colleges can have on its students. The report finds that while spending has been increasing at most higher education institutions, it has decreased at community colleges. Between 2002 and 2005, spending increased 2.5 percent per full time equivalent student among public research universities, but community colleges experienced a 6 percent reduction. Community colleges have also experienced the most dramatic spending cuts in instruction per student among public higher education institutions.

In summary, Trends shows that as public community colleges have become the primary access point for almost half of all post-secondary students, especially students who have been under-represented in higher education (such as minority, low-income, and first-generation college students), the resources of these institutions have declined. This trend is in part caused by the lower funding they receive from the states. In 2006 states subsidized an average of $7,100 per student per year in costs for students attending public four year universities, versus $6,500 for community colleges.

President Obama and Congress recognized the long-term educational needs of the country and its citizens. To maximize the impact of these funds, however, the college related allocation of these funds should target institutions and individuals who are at the highest risk of leaving their studies due to the economic hardships caused by this recession. Since the stimulus legislation funds have to go through the nation’s statehouses before they are appropriated to educational institutions, state legislators and governors have a unique opportunity to invest in students and institutions with the greatest need.

Viany Orozco is a Policy Analyst in the Economic Opportunity Program at Demos: Ideas & Action. Viany’s research and analysis at Demos focuses on the economic challenges facing young people, with a particular focus on state-based policy solutions.