Yet, to date, the federal government has had much less control over college tuition than state policies. The federal government funds state universities indirectly, through research grants to faculty, Pell grants for low-income students, and through some student loans that it backs and subsidizes. Direct funding for public colleges and universities comes from the states, and state and local funding cuts are largely due to looming outside constraints, such as tax caps and mandatory expenditures like public K-12 education and health care. Until the problem of reduced revenue is tackled, many experts say, tuition will continue to rise, no matter who is subsidizing it. “The Pell Grant plays a large role in helping low-income students afford college, but revenue is overwhelmingly state budget appropriation,” says Michael Mitchell, a senior policy analyst of state fiscal policy at the CBPP. “State funding is the big game.” As a Pew Charitable Trusts report put it last year put it, in higher education, the federal government funds individuals, while the states fund institutions.
Take California. In the 1950s and 60s, tuition was free for in-state UC students. In 1978, voters passed Proposition 13, limiting property-tax increases to under 2 percent, and squeezing overall revenue for California’s general fund. Tuition at both UC and CSU has tripled, and not, say scholars, because of large spending increases but because of decreased state funding for even more students: Between 2007 and 2013, $2 billion was cut from the state’s higher-education budget, as 32,000 more students enrolled at the University of California alone in the same time period. “Higher ed, corrections, and the social safety net are the places where there aren’t protective mandates or requirements in place,” says Hoene. “The corrections budget has gone up, health care has gone up, and higher ed has gone down.”
California is not an anomaly. State spending on higher education has plummeted to the point that some researchers suggest it may soon reach zero in states such as Colorado or Louisiana, as tax policies change. Overall, between 2003 and 2012, state funding for all public colleges decreased by 12 percent, according to the Government Accountability Office, while tuition rose by 55 percent; tuition surpassed state funding as the major revenue source for public colleges for the first time in 2012.
The University of California has come up with a grant model that it says maintains access for low-income students, with Berkeley ensuring tuition-free attendance for students whose families make under $80,000. At the same time, the university is raising tuition and eliminating grants for out-of-state students in response to a budget crisis. Among those in the $100,000 debt club is Virgie Hoban, a senior and former editor at The Daily Cal, who is something of an endangered species at Berkeley—a low-income out-of-state student. This academic year, the university eliminated aid for non-resident students, as one response to the budget and enrollment trends. “I feel lucky to have been a student in better times,” Hoban says, citing the new out-of-state aid policy. Still, “I will be in debt half my life.”