Education
2:39 pm
Tue March 19, 2013

Funding for Higher Education Lags Since Recession, Report Says

Kentucky follows the national trend of allocating less funding for higher education since the recession, according to the latest education report from the Center for Budget and Policy Priorities.

Credit From the Center for Budget and Policy Priorities report.

The report released Tuesday says Kentucky has cut higher education since 2008 by 26 percent—or $2,663 per student—when adjusted for inflation. That’s only slightly better than the national average of 28 percent, the report says.

“It’s not just the recession. We’ve been disinvesting in higher education for quite a while as we’ve dealt with a tax system that just doesn’t generate the revenue for growth in costs,” says Jason Bailey, director of Kentucky Center for Economic Policy, an affiliate of the Washington-base parent organization that produced the report.

The three largest expenses in Kentucky’s general fund are K-12 education at 40 percent, Medicaid at 14 percent and higher education at 12 percent.  

“Part of the reason why higher education receives the brunt of the cuts at times is because it has its own way to generate revenue, which is to raise tuition on students,” Bailey says.

Last year, Kentucky made 6.4 percent cuts to higher education in its budget, which was better than the 8.4 percent cuts other sectors saw. The University of Louisville raised tuition 6 percent while officials said the school has experiences cuts in the past 12 years.  The University of Kentucky also increased tuition costs 6 percent last year.

Further UK's board of trustees approved preliminary steps to increase in-state tuition 3 percent today, the smallest increase since 1997, according to the Lexington Herald-Leader. The report also points out that tuition has increased 150 percent the past decade, a trend happening throughout the state and nation.

The Center for Budget and Policy Priorities report says since 2008 Kentucky’s public four-year colleges have increased tuition by 22 percent—around $1,549. The national average for tuition growth is 27 percent.

Bailey and the Center blame the state’s inability to pass tax reform that could help fund higher education.

Last year the Governor’s Blue Ribbon Tax Commission made several recommendations to boost tax revenue by $690 million, but the General Assembly has not made any moves to address those proposals.

Bailey also says it’s important to fund the system that supports students taking out loans for post-secondary education. Officials with the Kentucky Higher Education Assistance Authority—which oversees the state and federal financial aid process—say there is around $100 million in state financial aid available each year. While that amount has remained consistent for the past several years, not everyone receives state financial aid.

For the state's College Access Program (CAP) grant, two-thirds of eligible students who apply are denied due to lack of funding.

According to KHEAA, in fiscal year 2011 there was $119 million in total unmet need between CAP and Kentucky Tuition Grant, which translates to about 73,000 students. In fiscal year 2012, this was about $134 million and 81,000 students, according to KHEAA vice president of government relations Erin Klarer. 

State financial aid money is available on a first-come, first-serve basis and runs out early. Officials say they’ll run the program to see who gets state financial aid this year by the end of March.

Meanwhile, annual student debt continues to grow. In 1999, it was around $324 million and a decade later was over $1 billion.

“That’s good in the sense that more people are going to college, but bad in the sense that they’re having to take on [more student debt].”