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A Long Road Forward for Higher Education

February 25, 2013 By Bryan Martin, Undergraduate Research Fellow

Every year since fiscal year 80-81, real state funding for higher education has been lower than it is today. In other words, we are spending less on higher education today than we have for the past 33 years, adjusted for inflation. That is why I applaud Governor Dayton’s budget proposal for its various investments in education, which are laid out in a previous blog post.

Governor Dayton’s budget adds $240 million to higher education, a down payment on what's needed to re-invest in a system that's taken big hit. One of the more obvious impacts of decreased funding is increased tuition. Since 2000, University of Minnesota tuition has increased by 174%. Along with this increased tuition, schools have less of a budget for financial aid. Who does this impact most? Low income, high achieving high school students who want to go to college but cannot afford it. More specifically, the recipients of the U of M Promise Scholarship for students with a family income of less than $50,000 a year.

These increased costs have more implications than it might seem. One is the privatization of education, emerging in two forms. With rising tuition attending private college becomes more cost competitive. This may seem counterintuitive, especially considering tuition rates at some colleges are $50,000 or more per year. But many private schools often offer significantly more generous funding options that in the end can make the college as affordable as public education.

The second is the privatization of public education itself, in what has been called by many “de facto privatization.” As public education investments decline, private sources of income (such as grants or donations) often bear some of the burden. In the real sense the money is all the same, but it does question the value of what we want from public education, such as who do we want controlling the institutions? As donor grants come in, it is often the donor that gets the autonomy to decide how the money is used. Take a look at this Atlantic article that explains the risks of corporate sponsored research and the corporatization of public institutions. A relatively recent example is the agreement between the Koch Foundation and Florida State University. In exchange for $1.5 million "gift" to the economics department at FSU, the Koch Foundation would have been allowed to influence the hiring and evaluation of professors, as well as set up a course that had Ayn Rand as required reading.  Admid a public dust up, FSU wound up not  following "the stipulations spelled out in the 2008 donation agreement."

Who would have been served in this case? The public, or the interests of the donor?

The U of M and MnSCU are state funded institutions to promote the education of Minnesota’s public. That is why there are large differences between in-state and out-of-state tuition. Large budget cuts provide incentives for the institution and in state residents that promotes a higher ratio of out-of-state students. As in state tuition gets increasingly costly, more students will choose different options as discussed earlier.

While the U of M says it's out-of-state recruitment program is aimed at attracting students to widen talent pools for Minnesota employers, there are troubling trends in other states where non-residents are lured for their willingness to pay the higher out-of-state tuition. According to a Minnesota Daily article only about 6% of the U's enrollment is out-of-state and non-tuition reciprocity students.     

Governor Dayton’s budget is a good start, but there is much more to be done to bring Minnesota back to pre-funding cut levels. Investments in education are crucial, and in economic terms, are one of the most direct investments possible into human capital. Human capital drives any society, making it a more productive, economically stable, and happy place to live. If we wish to keep Minnesota moving forward, we need to continue investing in our public education on all levels.

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