What states shouldn't do in tough economic times

One size fits all: good for clothing, bad for higher-education policy. But states are still heading down the one-size path as the economy tanks, two panelists told EWA attendees Saturday.

Micromanaging legislators are among colleges' top enemies, said Alan Merten, president of George Mason University in Virginia. Although the university receives less state money per student than ever before, lawmakers are becoming more meddlesome in areas such as tuition policies and how many out-of-state students a campus can accept, he said.

"We say, 'Everybody in the Legislature is an expert on education and transportation because they all went to school and they all drive a car," Merten said.

A better way to ensure accountability is for governors to appoint strong and knowledgeable governing boards, said Patrick Callan, director of the National Center for Public Policy and Higher Education. Virginia has been successful in that regard, he said.

Disturbingly few universities have tuition policies, Callan said, making it difficult for parents to know how much college will cost their children years down the line. Although federal financial aid has started rising, those increases appear to be leading some universities to hike tuition to rake in more of those federal dollars, he said.

With many eligible students, particularly in relatively low-cost states such as California, failing to apply for financial aid, the country needs to find a balance, he said.

"We need to both control the cost trajectory in higher education and fix financial aid," Callan said. "Don't leave money on the table, but don't raise tuition just to capture more financial aid money."

But state legislatures should leave tuition policies to the schools, he said. Otherwise, he said, states risk coming up with standardized policies that will hurt some campuses.

Both men raised concerns about the continuing prevalence of merit-based scholarships, particularly at private schools. Although the economy has led to struggles at nearly all colleges, wealthier private schools are able to dip into endowments and are essentially "buying students," Merten said.

It appears Americans could come out of the economic crisis significantly more debt-averse, Callan said. With much of the country's higher-education model based on borrowing, people already asking more questions about the value of a particular school, he said.

The nation's colleges and universities may need to go back to the drawing board to answer fundamental financing questions, Callan said.

"There's some real landmines out there some of us probably should be thinking more about," he said.

Although federal stimulus money could provide needed higher-education resources, some states are using the extra money as an excuse to lower their own higher-education appropriations, Merten said. George Mason, for example, is scheduled to receive $140 million from the state in each of the next two years, but $10 million of this year's allocation is coming from federal money.

"Our states are now building long-term budgets based on short-term stimulus money," he said.

Universities and colleges should be responding to the economic problems by implementing politically touchy solutions, Callan said. For example, schools should consider increasing teaching loads before cutting enrollment, he suggested, and cut graduate enrollment before limiting undergraduates.

Both panelists offered story ideas:
- State policies are often based on the stereotype that college students are 18 and living on campus, Merten said. The truth is that just 20 percent of student fit that profile, he said.
- How are community college students being affected by the economy? Are those colleges able to help their students, who tend to be particularly vulnerable to economic problems?
- How are states using stimulus money for higher education?
- Are debt levels affecting job vs. graduate school decisions for this year's college graduates?