IU School of Education study looks at funding inequities in public higher ed

By Richard Doty

Edward St. John, former director of the center, is the principal author of a 98-page report prepared for the Indiana Higher Education Finance Work Group. The report’s title is “Trends in Higher Education Finance in Indiana Compared to Peer States and the U.S.: A Changing Context, Critical Issues and Strategic Goals.”

“Educational leaders are aware of some of the current inequities in state funding, but this study provides a more complete analysis than has been previously available,” St. John said.

The research team considered four sectors of public higher education: research universities, doctoral universities, comprehensive/baccalaureate colleges and associate colleges such as Ivy Tech and Vincennes University.

“One problem is that the research universities, such as IU and Purdue, have been under-funded for more than a decade. Students at research universities thus have to pay a larger share of the costs than at some other campuses because of inequities in the state budgeting process,” St. John said. He added that pending cuts in state funding and recent tuition increases could add to these inequities.

“While this funding problem receives some attention from the press when budgets are developed, the fact that Indiana spends more per student enrolled in the public system than other states has not received much coverage,” St. John said. “There are structural problems in the state system of finance that make it more difficult to fix the funding problem by simply making adjustments through incremental budgeting.”

St. John’s study proposes six goals to help rectify inequities affecting all four segments of the public system of higher education.

The goals seek to maintain resource revenue adequacy; to increase funding equity; to coordinate state appropriations and tuition; to provide adequate student aid; to develop a systematic approach for coordinating finance strategies; and to improve system efficiency through market incentives.

St. John said expansion of the associate colleges could improve the system efficiency, but “it would be difficult to increase efficiency of state tax dollars by redirecting enrollment to associate colleges without changing the pattern of higher education finance.”

“It’s time to undertake comprehensive reform in state finance strategies,” St. John said. “These imbalances will require adjustment, over the long term, to develop a more equitable approach to the public financing of higher education, in which students and taxpayers pay a similar share of educational costs across different types of institutions.”

For these changes to occur, institutional leaders, state legislators and the Commission for Higher Education would have to agree on a uniform set of funding principles, he said. “This involves gradually adjusting the funding and enrollment patterns to achieve greater equity for students, more stable funding for institutions and greater efficiency for taxpayers,” he said.

Copies of the report can be obtained online by clicking on “online publications,” then “higher education finance” at this Web site:
http://www.indiana.edu/~iepc/welcome.html

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