NEWS:  High tuition, high aid at S.C. public colleges pose problems

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By Lindsay Street, Statehouse correspondent  |  Part 1 of 2  |   A continuing slide in state funds to public colleges is contributing toward making higher education more unattainable — and could cause South Carolina to miss out on the future global economy, according to an national education policy analyst.

Tuition rates are on the rise at South Carolina’s public colleges, largely in response to losing a third of state funding in the last 10 years. At the same time, state funds for merit-based, lottery scholarships have increased dramatically to about $300 million this year, an increase of about 12 percent per year.

These two factors have combined to make South Carolina colleges to be known as “high-tuition, high-aid,” which impedes access to higher education with the possibility of hurting the state’s economic future, according to Thomas Harnisch of American Association of State Colleges and Universities. Harnisch is the director of state relations and policy analysis for the nationwide organization.

“One of the problems with this high-tuition, high-aid approach, it establishes a formidable, up-front barrier to attend college and unreliable promises for financial aid on the backend,” Harnisch told Statehouse Report. “(Lawmakers) need to start making more investments in higher education because it will be an economic driver for the state to help it compete in the global economy.”

In other words, states need to appropriate funds for colleges to keep tuitions lower. Unfortunately, many agree, it’s been moving in the opposite direction.

S.C. Commission on Higher Education interim President and Executive Director Jeff Schilz said funding is just one part of the picture, but an important part that will play a role in sustainability of public higher education.

Big cuts

The 33 public universities in South Carolina are the last remaining victims of the Great Recession when it comes to state spending, education experts say.

Many other public entities have seen their state funds rebound and surpass 2007-2008 levels. But public colleges lag $224.9 million in this year’s budget behind its pre-recession funding level. South Carolina’s public colleges have lost 33 percent of funding, according to an August report by the Center for Budget and Policy Priorities.

And it’s not just a post-recession phenomenon. Since 1986, public institutions in  have gone from receiving 16.8 percent of the state’s general fund budget to receiving 7.0 percent of the budget, according to data from the S.C. Commission on Higher Education.  

South Carolina isn’t alone in the trend, but it is among those that have cut funding to higher education the most. Only six other states have reduced higher education more than the Palmetto State: Arizona, Louisiana, Illinois, Pennsylvania, Alabama and Oklahoma.

South Carolina also has the 10th-lowest level of per-student funding for higher education but the highest cost of median tuition among four-year public colleges — $10,383 a year, according to Southern Regional Education Board.

Harnisch said there’s one driver behind the cuts to public colleges: higher education is discretionary funding and institutions can seek funding alternatives, such as raising tuition, unlike a corrections agency.

“It’s one of the last things to be funded … (and) they don’t have to fund it,” Harnisch said.

High tuition

Most public institutions primarily rely on state appropriations to operate. As the state funds have dried up, some colleges have spiked tuition fees and increased the number of out-of-state students.

“Reduced state funding and increasing costs have forced greater reliance on student tuition and fees,” Winthrop President Dan Mahony said in an address last year.  He called the decrease in state funding “the new reality we face.”

In 2008, Winthrop received $5,851 per student in state funds. In 2017, it received $3,478 per student. Both Clemson and Winthrop universities increased tuition this year by about $200 per semester.

Earlier this year, University of South Carolina announced it will increase in-state tuition by $410 and The Post and Courier reported that the university has 42 percent of out-of-state students. Out-of-state students pay a higher tuition cost than in-state students.

“The General Assembly has not really left the universities with much choice other than to increase tuitions.  How else are they to get revenues if we don’t fund them?” said S.C. Rep. Gilda Cobb-Hunter, D-Orangeburg.

High aid

Cobb-Hunter worked on the successful increase of state funds to need-base and grant funding for higher education access last year.

“It’s important to fund those pots of money because of what’s on the other side of the ledger with the lottery scholarships,” sher said.

However, according to 20 years of data from the state Senate Finance Committee, need-based scholarships have only increased an average of 4 percent per year.

Overwhelmingly, the state sends money to merit-based scholarships, funded by the state lottery. That has increased an average of 12 percent per year. While much of the nation has only a quarter of its scholarships as merit-based, South Carolina doled out $300 million in merit-based and $65 million in need-based scholarships this year.

And that’s a problem, Harnisch said.

“Merit-based financial aid is an inefficient use of state funds and resources because the students most likely to get the aid are the students most likely to attend college anyway,” Harnisch said, adding that the highest performing students usually come from the wealthiest backgrounds. “That’s not going to really move the dial in terms of moving the state’s educational attainment.”

It also hides the real issue: that tuition costs are too steep to be affordable.

“Increasing the grant aid can help some students, especially those that have high test scores or high grades in schools, but increasing tuition — that affects all students and, for students that don’t receive the merit aid, that can be a substantial barrier for them to attend college,” Harnisch said.

The big discussion

Harnisch said state funds need to be restored or increased to help keep tuition low.

“The best route to keeping tuition down is for states to maintain their funding in higher education,” Harnisch said. He added that some states are capping tuition rates while also providing adequate funding to public colleges, so quality is maintained at the institutions.

Schilz said it’s not just about state funding, but that South Carolina needs to have a “broader discussion” about how public colleges operate amid emerging trends, such as growth, enrollment and sustainability.

“It has to be a holistic picture. You can’t just pick out one slice here or there,” Schilz said. “It’s time we had this discussion again. We’re going to have is some serious sustainability problems in the future … Let’s decide as a state what we want from our colleges and provide a structure.”

Cobb-Hunter, vice chair of the House Ways and Means Committee, said she’s not aware of any push to make funding higher education a priority in the state.

NEXT WEEK, Part 2:  State funds disproportionately benefit merit-based scholarships over need-based scholarships. How does this affect South Carolina students and the future of the state?

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