The Disconnect

A troubling lack of state funding is shifting the burden of higher education costs onto students—and the real victim might be Colorado’s future economy.
January 2014

According to the Colorado Commission on Higher Education, by 2018 about 70 percent of the jobs in Colorado are expected to require at least some postsecondary education. The demand for college-educated adults in Colorado is the fifth highest in the nation, whereas the demand for high school graduates is the second lowest. To remain competitive and earn a decent income and a secure future, our young people need college degrees. Until voters approve more higher education funding, loans will remain most students’ best option.

In the meantime, rising tuition costs and residual effects from the Great Recession mean loan debt, and defaults, are rising. (As of fiscal 2009, Colorado had the 10th-highest student loan default rate in the nation.) Nearly 37 million Americans collectively owe more than $1 trillion in student loans. The average Coloradan leaves college with debts between $20,000 and $30,000. That’s on par with the national average per student of $26,500, which the National Association of Student Financial Aid Administrators considers “manageable.” It may well be manageable for future lawyers or businesspeople. But because of the debt student loans create, our future chemists, anthropologists, journalists, fitness trainers, and dental technicians—all of which ranked among the employment search website’s worst jobs in terms of their physical demands, work environment, income, stress, and job outlook—have yet another reason to consider different professions.

Even so, a student’s major matters far less than simply obtaining a degree, and that’s where Colorado really needs to improve. While the state produces many graduates and has, for the moment, a robust jobs outlook, the students who make up the fastest-growing segments of our population—low-income families and minorities, primarily Hispanics—are the ones we’re serving the least: Whites along the Front Range between 25 and 64 years old have a 53 percent degree-attainment rate, while Hispanics hover around 18 percent. It’s disparities like these that have left Colorado with the second-highest degree attainment gap in the country between whites and minorities.

Those with postsecondary degrees or certificates earn higher incomes, have lower unemployment rates, and rely on fewer social programs. But even supporting these noble goals can be an area of contention around the state. Lieutenant Governor Joe Garcia, who’s also the executive director of the Colorado Department of Higher Education, says, “Some people think [higher education] is a private benefit, and if you want to make more money by getting a college degree, you ought to be the one paying for that.”

That mindset reflects a widespread myopia about how states can benefit from an educated workforce. As a group, college graduates fuel a vibrant economy and live healthier lives. Having educated workers means there are more jobs, higher salaries, and less crime. If current trends don’t change, jobs that require postsecondary degrees will be harder to fill with Coloradans. Instead, plum positions will go to transplants, which could create a permanent underclass among natives. “That will impact all of us,” Garcia says. “People will earn less money. They’ll be less likely to be tax contributors and more likely to be a net drain on the economy because they’ll require taxpayer-provided services.” Or, as Dennis Jones, president of the National Center for Higher Education Management Systems, puts it: “Students will pay more. The state’s going to pay less. More and more students are going to get shut out, and Colorado will become an increasingly less appealing place to live and work.”

Reversing the trends can only happen by popular vote, but recent polls suggest there’s no appetite for raising taxes to fund higher education. (As the November drubbing of Amendment 66 showed, there’s not much enthusiasm for funding public elementary and secondary education, either.) Jacobs believes it will require a more nuanced approach, such as increasing vocational training or using MOOCs (Massive Open Online Courses), the latest online education trend. But his pessimism is implicit in the advice he offers to parents: If you want to send your child to college, Jacobs says, “Start putting your money away now.”

There is some hope. Governor John Hickenlooper’s 2014 budget proposal includes a $100 million bump for higher education thanks to new discretionary spending dollars. About 60 percent of that will help colleges control their tuition increases. The other $40 million would be the largest increase ever in Colorado for need-based financial aid, and it includes a change to the financial aid model. Historically, institutions received funding based on enrollment, not graduation rates, which has de-emphasized student retention and graduation practices. “We’re changing our financial aid model so that when we give you financial aid dollars, we’ll give you a certain amount for every freshman,” Garcia says, “but we’ll give you more for every sophomore and more again for every junior, so that you, as an institution, have an incentive to keep those
students around.”

But even with the increase, Colorado still has $50 million less in higher ed funding than it had as recently as 2008. “We’re still pretty far behind our competitor states,” Garcia says, “but at least we’re now ticking up instead of ticking down.”

And as for Darian, Jessica insists she will find a way to get her daughter to college. “If I have to get five jobs,” Jessica says, “I’ll get five jobs.”