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Obama on College Funding (page 2)

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Updated on May 28, 2014

Boilard points to a number of recent controversies in California about pay for administrators (for example, the University of California’s president makes over $700,000), annual increases for executives that sometimes exceed 10 percent, golden parachutes, retirement bonuses, etc. “Any meaningful examination of affordability should include a look at how colleges are spending their money,” Boilard says.

The Delta Cost Project analyzes postsecondary education costs, productivity, and accountability. “We’ve been looking at how colleges spend their money,” says Donna Desrochers, Director of Economic and Education Research for Delta Cost. “Public universities have really managed to hold back spending in recent years, but the greatest increases in spending have been in contracted funding for research, public service, and institutional aid.”

What do these spending patterns indicate? Joni Finney, Vice President of the National Center for Public Policy and Higher Education, explains that colleges and universities have become increasingly concerned about their ranking in US News and Reports and are spending money in an attempt to attract a select student body. “Everybody wants to become a research institution. Higher education is in this chase of prestige and reputation,” Finney says. “And it’s taking away from the mission—the teaching and learning of undergraduate students.”

Finney says Obama’s tax credit will be beneficial to upper- and middle-income families, and the increased funding for Pell grants will be important for lower income families. However, she says additional reforms and support are going to be necessary. “Creating a federal initiative to get states to increase their funding, to be forced to match any dollars the fed allocates—this would help,” Finney says.

With the current state of the economy, this may be difficult to achieve; at least forty states now have budget deficits or are expecting deficits. “If the state has a smaller pie to distribute, it’s going to have to decide where it’s going to allocate its resources,” Desrochers says. “It’s difficult in tough financial times—higher ed is usually where cost savings come into play.”

No doubt Obama’s College Affordability Plan will bring about some necessary changes. Changes in how kids plan their route to college. Changes in how parents help them fund it. And perhaps even changes in how public colleges and universities spend their money.

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