University of Colorado. (Photo from Wikimedia Commons)

Colorado’s Public Colleges Face a Budget Crisis. It’s Been Decades in the Making.

In 1983, Nate Easley attended Colorado State University and received $900 federal grants each year that almost covered his annual cost of tuition.

CSU tuition has grown tenfold in nearly four decades, and state and federal support lag way behind, leaving Easley’s experience a distant memory.

“Higher ed is kind of out of reach for many kids now,” said Easley, who sits on the Colorado State system’s governing board and whose career has centered on college access. “One of the challenges of (this) generation is how to pay off college debt and get a start on life.”

For two decades, Colorado’s public colleges and universities have raised tuition repeatedly to keep schools afloat after the state cut higher education budgets following the 2001 and 2009 recessions. Each time, more of the institutions’ costs shifted to students and families.

Unlike K-12, the state’s colleges don’t have guaranteed support from the state. And cuts over the years have placed Colorado near the bottom of the nation in public support for colleges and universities.

Even the most modest state budgetary reductions due to the coronavirus-induced recession are expected to diminish the ability of colleges to teach students. Deeper cuts — especially while the pandemic simultaneously prompts fewer students to enroll — could lead to the state’s more vulnerable colleges facing a death spiral.

The decades of disinvestment have placed Colorado universities in a precarious financial position with little margin to maneuver through the coronavirus pandemic. Students are already considering whether to stay home next fall. Raising tuition could cause enrollment to dip further, putting in jeopardy colleges’ main revenue source.

Significantly hiking tuition once again might turn away families who already have absorbed years of increases.

“We’re concerned about what comes next,” said Henry Sobanet, Colorado State University System chief financial officer. “The state will have to take action to balance its budget; the federal stimulus money for the most part isn’t as flexible as it was during the Great Recession.”

He worries enrollment will erode, and that measures to control the pandemic will prevent in-person classes from convening — with more fiscal fallout. “How do you plan for that?” he asked.

A recession like no other

Lawmakers may find they can’t rely on previous tactics to help balance the state budget by pulling from higher education.

Tuition in Colorado already makes up on average 71% of total educational revenue at public colleges, leaving little room for increases. With university leaders worried about enrollment, tuition increases wouldn’t bring in as much money as they had in the past.

Many campuses are unsure if they’ll open to in-person classes this fall, and surveys find many high school seniors are reconsidering their college plans.

Students have already pushed back on paying the same rates for remote learning as they do for face-to-face instruction. Unless colleges can bring students back to campus, they could have a hard time making the case for increased rates.

Colorado charges some of the highest tuition in the nation for public colleges. For instance, Colorado residents pay about $23,000 to attend the state’s flagship University of Colorado at Boulder.

They would pay less in 38 other states. In 10 states — places like Texas, Indiana, and Wyoming — flagship universities would charge that same family less than $15,000.

Regionally oriented colleges, especially, may not have much more room to increase tuition without further jeopardizing enrollment that’s not grown as it has at the CU and CSU systems.

And while the Great Recession created a revenue problem for colleges, the pandemic is creating both a revenue problem and a cost problem. Colleges are issuing refunds on room and board, losing money from events, and spending more on technology.

Colorado’s diminished financial support of colleges

The Centennial State isn’t alone in pulling back support from its colleges, with nearly every state shifting costs to students in the last two decades, according to the Center on Budget and Policy Priorities.

During four years from the 2001 recession, Colorado’s higher education funding dropped 23.1%, or about $158.6 million, according to state budget documents.

Over the same time period, schools hiked tuition. Colorado State University, for instance, increased tuition by a cumulative 20%.

More dramatic increases occurred after the Great Recession. The state again cut about $135 million from higher education, from 2008-12, state budget documents show.

Tuition immediately increased and kept climbing, jumping by 68% over 10 years. By 2018, it reached an average of $10,797 for Colorado’s four-year public colleges and universities, according to the Center on Budget and Policy Priorities.Become a Chalkbeat sponsor

By 2012, higher education made up 8.8% of the state’s general fund spending. Now, after several years of reinvestment, it has nudged up to 9.1%.

As state lawmakers slashed higher-education funding, they expected universities would raise tuition to make up those losses, said Sobanet, who has worked under two governors.

That partly happened. As the economy gradually recovered from the Great Recession, schools across the state added more students — bringing in more tuition revenue — although enrollment now has plateaued at many of the state’s schools.

And after years of tuition hikes, Colorado’s public colleges are limited in their ability to ask families to pay more, without getting pushback.

“I also think the political pressure to not raise tuition will be real,” Sobanet said. “That’s probably appropriate.”

Colorado’s tax structure

Lawmakers also cut higher education for considerations other than the recession.

Collectively, K-12 schools and Medicaid consume 62% of the state’s general fund. Higher education has to compete with transportation, prisons, human services, and other needs for the remainder.

With the state’s universities and colleges designated as an enterprise fund, they are deemed a self-sustaining business rather than a public good — meaning the schools must balance their budgets with however much lawmakers give them.

In recent years, Colorado began to reinvest state funds in higher education, said Tyler Jaeckel, policy and research director for the Bell Policy Center, a research and advocacy group.

State Sen. Dominick Moreno, a Commerce City Democrat and member of the Joint Budget Committee, said traditionally the state has dipped into higher education funds to balance the budget.

Constitutional provisions require Colorado to increase K-12 spending every year, but no similar provision protects higher education. The state also makes it hard to raise funds for public colleges. Its Taxpayer’s Bill of Rights requires voter approval on all tax increases and limits how much money the state can retain and spend even in good economic times.

“Higher ed unfortunately has always borne the brunt because you can reduce state funding, and [colleges] can theoretically make it up with tuition,” Moreno said. “The challenge for us is that is not the case with this recession.”

Jaeckel fears this recession will lead to decisions that again hurt students, especially the most at-risk of not attending.

“If we see cuts to higher education … we are really limiting the opportunities for many of the Coloradans that never had access to them in the first place,” Jaeckel said. “It could be putting us back decades on making progress on larger equity goals.”

Higher costs mean students need more scholarships — or take on more debt

Laura-Elena Porras, 21, never would have attended the University of Colorado Boulder without seeking out numerous scholarships. She’s the first in her family to go to college, and her parents can’t pay for her tuition. In fact, she works two jobs, moved back home to Commerce City to help her mom, and pays half her parents’ mortgage.

For in-state students such as Porras, Colorado pays $94 a credit hour per student to schools through its College Opportunity Fund. Federal Pell Grants also cover on average $4,200 a year for students.

She has battled with the school bursar’s office plenty to ensure she can continue her education.

Many of Porras’ friends aren’t as fortunate, or perhaps as tenacious. She’s seen friends walk away from school with tens of thousands of dollars in debt. According to a Bell Policy Center report last year, student loan debt in Colorado has grown 176% since 2007, reaching $26.4 billion. Colorado’s average debt is $26,530 per student.

“My biggest fear is if I am actually going to be able to fulfill my dream to go to law school,” Porras said. “Undergrad is only the beginning.”

A bleak financial picture

Colorado lawmakers face a budget hole of around $3 billion, with a clearer economic forecast due May 12. The state’s $144.5 million in CARES Act funds for higher education is not expected to cover much of the revenue losses, and about half the money must be used for student grants.

State budget analysts predict Adams State and Western Colorado universities might not be able to endure a 10% — let alone a massive potential 20% — cut in state support. Both schools are regional open-access institutions that are crucial to educating students in rural swaths of the state and use state dollars as a larger share of their budget than CU and CSU.

Angie Paccione, Colorado Department of Higher Education executive director, said Adams and Western are economic drivers for the regions they serve. She said there has to be special dispensation for those schools from cuts.

“If those schools fail, their communities fail,” Paccione said. “The state is not interested in having those communities fail.”

In recent years, enrollment at smaller schools like Western and Adams also hasn’t kept pace with steady increases seen by CU and CSU, leaving them more vulnerable to budget stress. And the state’s smaller schools don’t have the large endowments enjoyed by the state’s flagships.

The state’s community colleges also are at risk, with more of their funding coming from state dollars than some larger four-year institutions.

In 2009, community colleges received a little more than half of their budgets from the general fund. It’s now 41.7%, up from a low of 34.6% after the Great Recession.

They also rely heavily on tuition, and decreased enrollment and state investment creates a troubling scenario, said Joe Garcia, Colorado Community College System chancellor.

“It’s a double whammy,” Garcia said. “We would be way down on revenue.”

Rural community colleges in the most remote parts of the state, including Lamar Community College, Otero Junior College and Trinidad State Junior College, would be hit hardest, he said.

The schools were already experiencing enrollment drop-offs, although they benefited from renewed investment from the state in recent years, Garcia said.

“We will have to figure out a way to allow them to keep the doors open,” Garcia said. “And we will … but it’s going to be tough.”

Shoring up the state’s public institutions will probably require more help than the state alone can provide. Moreno and other lawmakers said they are hoping the next federal stimulus contains more money for colleges and universities.

Easley, who’s dedicated his work to getting scholarships in the hands of low-income students, said he hopes lawmakers can find a way to not cut higher education, because he’s seen the benefits.

As a poor kid from Denver’s Montbello neighborhood, low tuition at CSU meant Easley could see college as a viable option. The state and federal support he received allowed him to graduate with very little debt.

The same is not true for students today after the drop in state support that’s led to years of tuition increases. He hopes this recession will help decision-makers refocus on how to help students afford college and create new opportunities for those that have the least.

“When it comes to opportunity and education and the investment that we make in the future of the country,” he said, “we have to be a can-do society.”

Jason Gonzales covers higher education for Chalkbeat Colorado, in partnership with Open Campus.

You May Also Like