Bevin sees silver lining of higher education budget cuts

Gov. Matt Bevin speaking to reporters | Photo by Joe Sonka

Despite another round of cuts in state funding of public universities and more tuition increases in place for next semester, Gov. Matt Bevin said recently that this is a positive opportunity for these postsecondary institutions, as it forces them to cut programs that do not add value or prepare students to join the workforce.

Asked if he has concerns about the cuts that universities have announced for the next semester, Bevin told reporters that he is encouraged that schools are now making the tough decisions “that have needed to be made for quite some time.”

“No, in fact I’m encouraged by the fact that for the first time in a very long time, our state universities are looking at what they offer that is adding value, and what they are offering that adds less value,” Bevin said. “Or maybe no value. Or maybe negligible value.”

Bevin said that this is part of a national trend among postsecondary institutions around the country, as people increasingly ask, “Where are we getting, as taxpayers, a good return on the investment we’re making?”

“It’s still close to $1 billion that taxpayers put into postsecondary education every year here in Kentucky, and it’s important that we get a good return on that. So we want programs offered that result in jobs and job opportunities for the graduates. That’s why we’re subsidizing them. That’s what it is, it’s taxpayer money.”

While state appropriations for postsecondary institutions was over $1 billion in 2008, that figure has been cut in each subsequent year, now amounting to roughly $823 million in each of the coming fiscal years with another 6.25 percent cut in the biennial budget passed by the Kentucky General Assembly in this year’s session.

Even with an additional $31 million in performance-based funding available for universities in the next two years, the level of direct postsecondary funding in the 2020 fiscal year is 35 percent lower than what it was in 2008, when adjusting for inflation.

Such cuts in state appropriations have coincided with a dramatic increase in student tuition, as state universities have scrambled to bring in more revenue.

For example, even though the University of Louisville froze its in-state tuition rate in the last academic year for the first time since 2001, this annual rate of $11,068 was still triple what it is was in that year, and double the tuition rate from 2006.

While UofL board of trustees chairman J. David Grissom had strongly advocated last year that the university should freeze its tuition rate for multiple years — citing the example of Purdue University and the growing burden on students — he and the administration of new UofL President Neeli Bendapudi have indicated that they would support a 4 percent tuition hike for the next academic year.

This 4 percent increase in tuition would be the maximum amount allowed for postsecondary institutions in a single year by the Council on Postsecondary Education, which are also limited to increasing tuition by no more than 6 percent over the next two years.

Other state universities have not only announced plans to hike tuition in the coming academic year, but to make dramatic cuts to faculty, staff and academic programs.

Eastern Kentucky University recently announced that due to a $25 million budget shortfall, it was eliminating 153 positions, closing its regional campus in Danville, ending the men’s and women’s tennis teams, and slashing a long list of academic programs, including economics, nursing, theater, deaf studies and family and consumer science.

However, EKU also announced that it was planning to add online degrees in criminal justice, business administration, communications and sports management, in an attempt to “create new revenue streams.”

Western Kentucky University also announced the elimination of 140 jobs and the closure of one of its academic colleges, while Northern Kentucky University will cut 63 positions and raise tuition by 3 percent. Morehead State is cutting 26 positions, but it has joined EKU as the only state schools to freeze tuition for the coming year.

While direct appropriations for universities was cut by 6.25 percent over the next two years, these schools still have $31 million in performance-based funding to compete for. This new funding mechanism — based on improving metrics like graduation rates and STEM degrees — has been championed by Bevin, who cited it last week as yet another way that universities can taylor their programs so that students can ultimately gain a degree that has more value.

“As we move more towards outcomes-based funding for postsecondary education, you’re going to see more of this,” Bevin said. “And you’re going to get a better result. And the students will be better, the parents who are helping to fund this will be better, the taxpayers who are helping to fund this will be better. We’ll have more employable individuals coming out of these institutions.”

Bevin’s comments echo statements he has made about higher education throughout his term as governor, as he has often derided universities offering liberal arts degrees for French literature and “interpretive dancers” instead of fields in which graduates can find a well-paying job.

A 2015 report by the U.S. Department of Education showed that 16.3 percent of Kentuckians with student loan debt defaulted on their loans in the previous three years, which ranked as the third-highest percentage among states. The department’s College Scorecard indicates that the median federal student loan debt for UofL undergraduate borrowers after completing school is $19,657.

At a Greater Louisville Inc. event last week, Sen. Mitch McConnell told a questioner from the audience who was concerned about the student debt crisis that the federal government should have no role in bailing out such borrowers.

“Well, I can tell you that the government is not going to bail out the student loan program,” said McConnell. “I don’t want to sound hardhearted here, but when you borrow money, you’re supposed to pay it back. It’s not an obligation of the federal government to forgive student loans.”

Next week, the finance committee of the UofL board of trustees is expected to approve the budget for the upcoming fiscal year that sets a 4 percent increase for annual in-state tuition at $11,511. The full board is expected to approve this budget at their next meeting on June 20.