Most students today graduate from college owing money on loans they used to pay for the education. As part of our JBC briefing on higher ed, we got these numbers on what students in Colorado owe on graduation day.
Sunday, March 23, 2008
Thursday, March 20, 2008
Bad News
America's economy is tanking and it's taking Colorado with it. The good news is that Colorado is doing a bit better than other states. The bad news is that we're still hurting. How bad?
Over the next five years, it cuts nearly $500 million from our General Fund and $200 million from Cash Funds. In one sense, nothing has actually changed. It just means that we're now predicting we'll have less money than we were predicting a few months ago.
By we, I mean the legislature's economists and the governor's economists. Their predictions are in the Legislative Council and OSPB revenue forecasts. They both came out today and they mostly agree on the numbers. (Not that it matters -- they're both projections. Some amount of money will actually come it and it won't be the amount in either projection).
The forecast pretty much wipes our capital construction spending. That's the money we put into new buildings and equipment and some maintenance on existing buildings and equipment.
The forecast cuts capital in the current pending to about $45 million for next year, then eliminates it for the following years. If you want to see the effect of that, look at the list of projects the Capital Development Committee has come up with. The CDC has proposed funding projects down to line 35 (the numbers on the far left are the CDC priority. The next column is the OSPB priority). The $45 million we have now would cut the list at line 17, though we could probably stretch it through 18.
That's not the likeliest thing to happen. The CDC is meeting to reprioritize the list in a way that reflects the new reality. Or new expected reality.
That's the most immediate effect of the new forecast, but it might not be the worst. The $500 million dollar change comes from a 1.3% adjustment to the revenue projection. That's not much, especially when you consider the accuracy of economic forecasts.
Legislative Council Economist Mike Mauer warned that more bad news could easily eat into our SB-1 transfer to transportation and even our GF under the 6% limit.
When money comes into our general fund it first gets set aside in a reserve account. After that's filled, it goes into what we generally think of as the general fund, the money we spend running the state. That GF is capped by TABOR at 6% over the previous years GF. If enough money comes in to let the GF grow by 6%, any excess goes to transportation, what we call the SB-1 transfer. That transfer is capped at around $250 million.
What's next in line for money? We used to call it “excess general fund reserve.” It was a good name, because it implied that the money was just padding our savings account.
In 2002 the legislature passed HB-1310. That essentially spent any excess general fund reserve. It divides whatever money is there 1/3rd to capital construction and 2/3rds to highways.
It's that last pot of money we're losing now. But it wouldn't take much to drain money from SB-1 and the main GF account.
Monday, March 17, 2008
Higher Education Funding
State ContributionWe're adding $50 million to our budget for colleges and universities this year and another $20 million for financial aid. The money will help schools keep good faculty, maintain their labs, buildings and equipment and help hold down costs down for students. This year we're using a new way of distributing the money. About half of it goes to helping schools with the general increase in their costs; things like salaries, benefits and utilities. That means each schools General Fund revenue will go up by at least 2.2%
The rest of the money will help each college or university move closer to the state funding similar schools around the country get.
Tuition
Colorado's colleges and universities are still a bargain. They offer a top-notch education and low tuition. Here's an example. This chart compares the cost of going to CU-Boulder with the cost of going to comparable universities around the country:
It's the same situation for nearly all of our higher ed institutions. Their tuition is low compared to their peers in other states.
But our low tuition still buys good quality. Here's how CU stacks up in the U.S. News rankings:
| Rank | University |
| 44 | University of Texas -- Austin |
| 75 | Indiana University -- Bloomington |
| 79 | University of Colorado -- Boulder |
| 85 | University of Kansas |
| 85 | Iowa State University |
| 91 | University of Missouri -- Columbia |
| 91 | University of Nebraska -- Lincoln |
| 96 | University of Massachusetts -- Amherst |
| 112 | Florida State University |
The JBC authorized resident undergraduate tuition increases of 9.5% for research universities, 7.5% for state colleges and 5.5% for community colleges. Those are caps. The schools don't have to increase tuition.
For the research universities, CU, CSU, Mines & UNC, tuition can't go up more than 5% for in-state students with financial need.
A substantial portion of the tuition increases will go toward financial aid, helping to offset the expense for many students.
Financial Aid
We're adding more than $10 million in financial aid aimed at the students who need it the most. It includes a general increase in need-based aid, restoring work-study funding to it's pre-budget crisis level and doubling the size of our pre-collegiate grant program. It's a big increase, but we have a long way to go before we catch up to where we used to be.
Need-Based Aid
The JBC approved a $7,270,600 increase in need-based grants. This money goes to both graduate and undergraduate students attending public and some private schools Colorado. To get the grants, students have to prove that they need the financial help. In 2006, nearly 29,000 students got grants; the average amount of the grants was just over $1,500.
Studies show that students who work part-time on campus do better in school than students who don't.
Institutional Aid
Most colleges and universities offer a substantial amount of financial aid to students using money from their own budgets. They have to put more than 2% of the money get get from tuition increases into financial aid.
Special Programs
Two specialized schools -- CU's medical school and CSU's veterinary school -- have been especially hard hit by the state's tight budgets. They never got much funding and the budget cuts pushed them to the bottom ranks of med and vet schools in the country. This year we're trying to help help them a bit.
CU Health Sciences Center
We're adding $1.5 million to the HSC to make up for the lack of GF support and help ensure that we're training enough doctors and nurses for Colorado.
College of Veterinary Medicine and Biomedical Sciences
CSU serves as the main veterinary program for most of the Rocky Mountain West. It's consistently a national leader in ved med and biosciences despite getting far less state support than similar programs in other states.
Want more information on our Higher Ed budget? Click here.
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