A Key Question for Clinton’s College-Affordability Plan: Will States Buy In?

AP Photo/Jim Cole

The plan Hillary Clinton announced on Monday during a campaign stop in New Hampshire would make $175 billion in grants available to states that guarantee students can cover tuition at four-year public universities without loans. But some states won't like one of the costs of participating: giving up some flexibility on their higher-education budgets.
August 11, 2015

The pillar of Hillary Clinton’s higher-education proposal that has attracted the most attention could also be a tough sell to state lawmakers.

Mrs. Clinton’s proposal, which she announced on Monday at a campaign stop in Exeter, N.H., aims to turn the tide on states’ dwindling support of higher education by creating an incentive for states to buy in. Under the plan, which would cost $350 billion over 10 years, the federal government would make about $175 billion in grants available to states that guarantee students can cover tuition at four-year public universities without loans. But there’s a condition: States would need to arrest higher-education budget cuts and slow tuition growth in order to be eligible.

In other words, taking the money would limit state lawmakers’ freedom to make cuts in one of the first categories of state spending they turn to when it comes time to tighten budgets, experts said.

"States really dislike these sort of programs," said Robert Kelchen, an assistant professor of higher education at Seton Hall University. "It ties their hand in one of the few budget areas where they have flexibility."

Mr. Kelchen said state lawmakers often use higher-education cuts as a budgetary "balancing wheel." They can’t trim much in areas like elementary and secondary education, corrections, or Medicaid because that spending is often locked in by federal policy, but college appropriations are more easily sliced. And unlike many other budget items, higher education is seen as being able to generate its own revenue through increased tuition. That has made the industry even more susceptible to cuts, finance experts said.

Many states have significantly cut support for higher education since the recession, and often those cuts have been paired with tuition increases. State spending dropped 37 percent from 2000 to 2012, while spending from federal sources increased by 32 percent per full-time-equivalent student, according to a recent report by the Pew Charitable Trusts. That’s the trend Mrs. Clinton appears to be trying to reverse.

Mr. Kelchen said states would have to weigh whether an influx of funding for financial-aid packages would be worth "giving more authority to Washington and away from the capital." Mrs. Clinton’s proposal acknowledges the difficulty of answering that question by including an option for public institutions to bypass uninterested state governments and work with the federal government directly, though the proposal does not include specifics on how following that path would work.

In a campaign event in New Hampshire on Monday, Mrs. Clinton acknowledged that the plan was "ambitious."

"But I think we should be ambitious because it’s achievable," Mrs. Clinton said. "No student should have to borrow to pay tuition at a public college or university."

Benefits of Buying In

But state lawmakers often show "automatic resistance" to federal funding when they perceive overreach, especially if the state government is in Republican hands, said Nick Hillman, an assistant professor of educational leadership and policy at the University of Wisconsin at Madison. In his own state, Gov. Scott Walker, a Republican candidate for president, last month signed a budget that cut spending systemwide by $250 million. Mr. Hillman said it’s hard to know whether the state officials who pushed the cuts would go along with Ms. Clinton’s idea.

Lawmakers would probably acknowledge that their states can’t handle the student-debt crisis on their own, Mr. Hillman said, but "it’s easy for opposition to find the downside of any policy." Mainstream Republicans, for example, could raise concern over how Mrs. Clinton’s proposal would affect the federal deficit.

Or they could point out that the average student-debt load declined from $22,300 in 2005 to $21,500 in 2008, he said. That slight dip came a time when overall state appropriations were increasing, according to data from the College Board.

"What she’s envisioning is a long-term fundamental change, and there will be resistance to that," Mr. Hillman said. "It could work if you get states to belly up."

Many states may decide to go along with the proposal in exchange for the funds, said Jennifer Delaney, an assistant professor of higher education at the University of Illinois at Urbana-Champaign. "Without a federal partnership, they’re leaving money on the table that could help constituents pay for college," she said.

William R. Doyle, an associate professor of public policy and higher education at Vanderbilt University’s Peabody College of Education and Human Development, cited the first iteration of President George W. Bush’s No Child Left Behind program, which tied billions of dollars in grants to incentives, as a recent example of states' getting on board with federal requirements.

"Every state went ahead and did it," he said. "That came about because the federal government leveraged its investment in K-12 to make those changes."

But as Mr. Doyle noted, you don’t have to reach far to find an example of the reverse happening. More states than expected have refused to expand Medicaid coverage under President Obama’s Affordable Care Act.

States could look at Mrs. Clinton’s proposal as a way to meet their own benchmarks for improving college access and increasing graduation rates — like the recent Texas plan for 60 percent of 25- to 34-year-old workers to hold a college degree or credential by 2030, Mr. Doyle said. Such a goal is not attainable, he said, "without substantial college affordability. You need to be able to get in to go."

Beyond Debt-Free College

Mrs. Clinton's rivals for the Democratic presidential nomination, Sen. Bernard Sanders of Vermont and Martin O’Malley, the former governor of Maryland, have also proposed sweeping higher-education platforms in recent months. Mr. Sanders’s plan, for example, would make four-year public colleges free for all students — at a price tag of about $70 billion a year.

Mrs. Clinton’s plan, unlike those of her competitors, does not aim to make college completely debt-free. The proposal would ensure that "everyone is pulling their weight," Ms. Delaney said, by setting expected family contributions and requiring students to work at least 10 hours a week and contribute their earnings in order to be debt-free.

But experts said it’s important to look beyond students’ debt load when making higher-education policy proposals. Mr. Doyle said officials should remember that student debt is "a symptom" of the rising cost of college, and should decide which parties must be responsible for making it more affordable.

Those responsible parties should include the institutions themselves, said Mr. Hillman. Proposals like Mrs. Clinton’s are often "so focused on individual behaviors that they let the colleges off the hook," he said, because policy makers are "too timid to take on the institutions."

Also included in Mrs. Clinton’s proposal are extensions of areas pursued by the Education Department under President Obama — a "zero-tolerance" policy for student-loan servicers that overcharge veterans, for example, and an option for defrauded students to discharge their debt. Mr. Hillman said those policies need to set thresholds for performance without being too unfair to for-profit institutions.

"It baffles my mind how low the quality threshold is that a college needs to meet in order to be recognized by the Department of Education," he said. "We should be blaming our regulatory environment to be allowing this to even exist."

Correction (8/11/2015, 12:11 p.m.): This article originally misstated the cost of the Sanders plan to make four-year public colleges free to all students. The cost would be $70 billion a year, not $70 million. The article has been updated to reflect this correction.