Speak Your Piece: As Economy Recovers, College Finances Worsen

The 2009 federal stimulus package temporarily helped hold down the cost of higher education for America’s young people. Now, rising tuition and flat funding for programs like Pell grants put rural students and community colleges at risk, according to a new report.

Share This:

Brittany Sendejo
Brittany Sendejo, a student at Southwest Texas Junior College, says she couldn’t get a college education without a Pell Grant.

Brittany Sendejo gets emotional when she talks about her Pell grant.

The federal college financial aid program pays only a part of her cost of attending Southwest Texas Junior College (SWTJC), which is about 80 miles west of San Antonio. But for Brittany, the support makes all the difference.

“Without the Pell, I could not go to college,” she said tearfully. “I am highly dependent on Pell… [It] has motivated me to get better grades and be a better person. The government believes in me, so I want to work hard and give something back.”

Student aid is vital to rural community college students like Brittany. The Federal Pell Grant Program supports 3,253 students at Brittany’s community college alone and accounts for $10.5 million (or 30 percent) of the college’s $35.6 million budget. That’s down from 45 percent of students at SWTJC who received Pell grants in 2013-14. The program has not kept up with the tuition increases that have followed the Great Recession to support students and their colleges.

Rural America’s most precious asset, its human capital, needs access to the associate degree programs and high-skill training that business and industry demand. So why are finances worsening at our nation’s 600 rural community colleges, even as the economy recovers?

A new report from the University of Alabama’s Education Policy Center, On Opportunity’s Fault Line: The Precarious Nature of Rural Community College Finance, is based on an annual survey of members of the National Council of State Directors of Community Colleges.  Responses of the state directors indicate that the deepest cuts in state appropriations came in fiscal year 2011 — after federal stimulus funds ran out — not in fiscal year 2008 or 2009. These cuts came after two dismal decades of declining state support. In 1980-81, more than half of U.S. community college students enrolled in a college in a state where state funding accounted for 50 percent or more of total community college revenues. There were 22 such states that year that funded community colleges at that level. By 2000-01, only seven states provided that much support to their community colleges. And only 8 percent of community-college students were lucky enough to attend an institution in one of those states.

The report also reveals the dismal state of community college finance. Rural community colleges face by far great fiscal strain: among the survey’s 45 respondents, only five report no strain, while all of the remaining 40 report fiscal strain at their rural community colleges.

Source: Katsinas, S.G., Malley, M.S., and Warner, J.L. (2016, February). On opportunity’s fault line: The precarious nature of rural community college finance.

Cuts in state appropriations for operating budgets drive tuition up. Combined with flat federal student aid investments since 2012, the result is declining enrollment.

The impact falls hard on students like Brittany. She’s an honors student majoring in business at Southwest. “I am concerned,” she said. “Tuition increases are making it tougher for me to go to college. My mother, who works part-time at the local nutrition center and delivers meals to the disabled and elderly, does not make enough on her own to send me. It’s just me and my mom, and I’m the first to go to college.”

She is the first in her family to go to college.

Nationally, 3 million more students received Pell grants in 2012 than in 2009. Rural community colleges like SWTJC saw all-time record enrollment. From 1994 to 2010, SWTJC’s enrollments doubled from 3,139 to 6,235. But because Pell is not an entitlement, to countervail a projected $2 billion shortfall in the program, Congress approved new eligibility restrictions in June 2012. The impact on academically-talented, financially-needy students at SWTJC and rural community colleges across the country was immediate and severe: nearly 1,000 fewer students enrolled at SWTJC, and enrollments fell to 5,410. Similarly, a 2013 EPC study found 17,000 students lost Pell grants in Alabama, Arkansas, and Mississippi in 2012-13.

A class at Southwest Texas Junior College (Photo courtesy of STJC)
A class at Southwest Texas Junior College

The Double-Whammy

The leaders of our nation’s 600 rural community colleges, which have always lacked basic economies of scale, face a double-whammy: to combat cuts in state appropriations for operating budgets and federal student aid, they must raise tuition, which results in declining enrollment and, consequently, less tuition revenue.

With the end of the maintenance of effort (MOE) provisions in the federal stimulus package that forced states to keep tuition low, tuition is now rising far faster than state aid, even as Pell remains flat. Over the past two decades, the cost of in-district student tuition for 12 semester hours at SWTJC has increased by 316 percent, while the maximum Pell Grant is up by a mere 149 percent. And the vast majority of students like Brittany Sendejo do not receive the maximum Pell grant: the average Pell grant nationally in 2014-15 was $3,673, just two-thirds of the $5,730 maximum.[1]


Not surprisingly, state community college leaders reported declining community college graduation rates in each of the last two years (see Higher Education’s New Normal and A New Way Forward). This is the opposite of a college success agenda.


Future directions

So what is to be done? We recommend:

  1. Federal law should require states to maintain operating support as a condition to receive Title IV student aid. Access and completion are a shared responsibility of the states and the federal government, which MOE provisions recognize. President Obama’s recent proposals for free community college, which include MOE provisions, are therefore a step in the right direction.
  2. The U.S. Department of Agriculture should, as per Section 6018 of the Agricultural Act of 2014, use geographically appropriate classifications that accurately describe rural America. The USDA should lead all federal agencies in using geographically appropriate definitions. The urbanicity definition currently used by the U.S. Department of Education lumps small cities with rural missions like Peoria together with Chicago. It renders rural community colleges invisible and keeps voices like that of Brittany Sendejo silent.
  3. Federal action is needed to preserve the relative declining purchasing power of Pell grants, rural America’s most important economic engine. Here again, federal MOE provisions for Title IV student aid, including Pell, would help.
  4. Private philanthropy should invest in rural community colleges. The Ford Foundation’s Rural Community College Initiative, the last major foundation program for this sector, ended in 2002. While the Obama administration proposed “promise zones” to lift up high poverty rural areas, too little has been done to help rural counties in the “arc of poverty” that runs from West Virginia and Virginia through the Carolinas to Georgia, and west through Alabama, Mississippi, Louisiana, and Arkansas, into Texas. Here is a fantastic opportunity for private philanthropy to positively affect federal policy.

Contrary to bumper sticker wisdom, the problem is money, both state and federal. Declining state funding has changed the basic social compact between states and local boards of trustees responsible for governing community colleges and our federal government. Nearly seven decades ago, the Truman Commission challenged states to offer geographically universal postsecondary education for the 13th and 14th years. Will our nation retreat on this promise for our children now?

Stephen G. Katsinas is professor and director of the Education Policy Center at the University of Alabama. Michael S. Malley Jr. and Jake L. Warner also contributed to this article.

[1] http://trends.collegeboard.org/student-aid/figures-tables/maximum-and-average-pell-grants-over-time


Topics: EducationKids

News Briefs