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College Costs 

A closer look at Arizona’s funding for higher education

On April 5, the Arizona Board of Regents announced the new 2018-2019 tuition rates for all three public universities. Arizona State University will charge its incoming freshman $10,882, which is a .3 percent increase from last school year. Northern Arizona University will charge $11,564, at a 4.6 percent increase. The University of Arizona has the most expensive tuition for incoming freshman at $12,447, a 1.8 percent increase from last year.

The universities have been doling out steady increases in tuition over the past ten years. Newly appointed regents chair Ron Shoopman recalled the year 2008, when Arizona suffered larger cuts to education than any other state, especially post-secondary education.

"It forced the universities to try to do everything they could to control the rise in tuition while still maintaining quality educational opportunities," he said.

In a news release announcing the new tuition rates, the Regents said that 10 years ago, "the state funded approximately 75 percent of the cost to educate resident students. Current state funding is about 34 percent."

The Regents have been working with the Arizona Legislature to try to get their cost-per-student funding back up to 50 percent. According to a Regents meeting news brief from December 13, 2017, current state support for Arizona resident students, including one-time funds, is approximately $5,630 per student. To meet their funding goals, they want state investment in resident students to increase to $7,898 per student.

According to the Regents and an independent third-party report conducted by Grant Thornton, ASU, NAU and UA are collectively 5 percent below the average cost-per-student when compared to similar universities across the country.

Shoopman pointed out that Arizona is one of the only states in the country that doesn't have a tuition assistance program for students, making it harder for the universities to provide financial aid and be accessible to all residents.

"The Board of Regents uses some of the resources from out-of-state and international students to help in-state students from lower socio-economic areas go to college," he said.

The Regents are also looking into expanding online education and creating partnerships with community colleges to streamline the transfer student process. Shoopman said that for some areas of study, students will have the option to take classes for three years at a community college and just one year at a university to receive their bachelor's degree.

Shoopman said a lot of courses have been dropped over the last 10 years, and that Arizona is 5 percent to 8 percent behind peer universities for teacher salaries. He said the Regents have to work hard to keep the top talent employed in the three universities, because they maintain the high-quality education and research projects that can bring in intellectual property to drive our economy in the future.

In the last 10 years, UA has seen a complete inverse in two of its major funding sources. In 2008, the school's revenue consisted of 15.9 percent from tuition and fees and almost 30 percent from state appropriations. In 2018, over 30 percent of the revenue now comes from tuition and fees, while state appropriations make up just 12.7 percent.

Kathy Whisman, the university's chief budget officer, said that many of the revenues that UA receives is highly restricted, meaning it can only be used for certain things. For example, 30 percent of the university's revenue comes from grants and contracts, which are often awarded to fund specific research projects. These funds can't be used for academic instruction, teacher endowments or other discretionary purposes.

Whisman added that one-time funding provided by the state is unpredictable. They can't hire someone with that money if they don't know if it's going to be there again the next year.

At first glance, the hikes in UA's tuition rates may seem like a direct result of the state's decrease in funding. However, Whisman said that tuition hikes are also related to an overall increase in student enrollment; as the university grows, so do the costs. The university has brought in a high number of non-resident students, who pay around three times more than residents. These non-resident tuitions help keep resident student tuition down, but have increased the overall rates noticeably.

The same goes for Arizona's community colleges. Similarly to UA, non-resident student tuition helps support Pima Community College's expenses and can make tuition more affordable for resident students as the budget continues to shrink.

David Bea, PCC's chief financial officer, said that in 2008, the college received about $23 million in appropriated state aid. That amount was comprised of $19 million for operating costs and more than $3 million for capital needs.

Over the next few years, the total state funding was decreased to $15 million, then $7 million, then in 2015, PCC lost all state funding. Bea said that a similar decline and eventual loss happened with Maricopa County's community colleges, but with slightly different numbers.

After cutting the two largest community colleges out of their budget, the state legislature was able to drop their funding for community colleges by over $17 million that year.

"While we were very careful not to put the burden on students in tuition increases that were equivalent to the fact that we lost so much revenue from the state, it did result in tuition increases over the years," Bea said, adding that the increases were done reluctantly.

In 2009, PCC's capital funding was eliminated completely. Bea said that funding was important because it gave the school a relatively predictable source of funding for equipment and technology replacements.

After losing it, the college was only able to replace equipment in the most critical shape, as opposed to being able to make updates on a more appropriate cycle. Bea said they have since resolved these issues, but it took a critical number years to do so.

Overtime, PCC has been able to learn to "do more with less" and the staff tries to be strategic in the reductions that they've implemented.

For example, PCC used to pay two expensive leases on learning centers for adult education programming and public safety. The college was able to make a deal with TUSD and consolidate the two centers into the vacant building of the former Roberts Elementary School at a cheaper cost. He said that downsizing was a win-win because it helped them save money and they also repurposed an empty building.

PCC's revenue comes primarily from three places: tuition, federal financial aid and property taxes. Bea said property taxes is the largest source by far, and the college also receives revenue from contractual services that are provided to companies for workforce training. Because of this, Bea believes it's important, even critical, for the college to be connected to community partners to be a resource for skills development.

Bea said that community colleges are counter-cyclical to the economy. Their enrollment will increase when the economy turns down because when jobs are readily available, people will choose to work rather than go to school. But when the economy is in a crisis and people lose their jobs, they often turn to community colleges as a training and skills opportunity.

Referencing the economic downturn of 2008, Bea said, "Our enrollment increased dramatically at the same time that the state was cutting our funding." He believes enrollment should be up for this fiscal year, as well as the next five.

According to a Regents meeting from Dec. 13, 2017 Arizona high school graduates are "increasingly coming from populations that traditionally have been less likely to attend college, such as Hispanic and first-generation students as well as students from lower socio-economic backgrounds."

Shoopman said that Arizona will be a majority minority state by 2030, so it's very important that the public universities are available to historically disadvantaged communities. He believes educating the young people of Arizona should not be a political issue, but a priority regardless of party or affiliation.

"Investing in [higher education] is critical to our businesses because right now there are thousands of jobs in Arizona that our residents are not qualified to take, so they are taking people from out-of-state. We have to do a better job of preparing Arizonans for the jobs that will be available in the future."

Bea said that PCC is doing their part by making sure the education they provide is relevant for the workforce. But, the state government has neglected their responsibility of making that relevant education affordable to students.

"What I'd like to see from the state or elsewhere is the understanding that education is critical to the success of any nation state or place," he said. "That's central to the future success of the state. That takes an investment."

More by Kathleen B. Kunz

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