Public colleges and universities are bracing for yet another cut to their budgets when legislators meet Friday to figure out how to close a $304 million gap in funding.
The one bright spot, says Higher Education Commissioner Joe Rallo, is that the actual dollars lost won’t be that much — $22 million to $60 million — because the state has so often reduced its support over the past eight years.
Of greater concern is that the withdrawal of support has shifted the bulk of a college education’s cost from state government to individual students. The change endangers higher education’s traditional mission of helping lower and middle income students to move up the economic ladder.
Higher education leaders have long stressed the importance of providing an avenue for upward mobility in a state with such high poverty and low incomes. Now, they have a recently released national analysis, which they plan to use with legislators, that shows Louisiana’s public colleges have a better rate of helping students move into higher income brackets than the elite Ivy League schools.
"That’s the whole role of higher education," said Rallo, who was the first in his Italian immigrant family born in the United States. “The mobility factor is still there, but you have to able to get into college and stay in, and that’s oftentimes challenged by the financial piece.”
In an era where more than half the nation’s states are rolling back support for higher education, only Illinois and Arizona have cut their contributions to university budgets more than Louisiana.
Higher education budgets in Louisiana have stayed at about $2.5 billion for the past decade. But the state’s contribution has declined significantly from $1.2 billion in the Fiscal Year 2006-2007 fiscal year to $919 million for this Fiscal Year 2016-2017.
Though colleges and universities received a modest increase in their appropriations last year, they were cut a few weeks ago to balance last year’s state budget and expect to be cut again Friday to realign spending with available dollars for this year’s state operating budget.
“Every time you face a state budget reduction, you have to resort to tuition and fee increases to offset what the state doesn’t give you. That has a detrimental impact on the social mobility of our students,” Alexander said. “They’re forcing more public institutions to become more private in how they function.”
That means some of the leading public universities around the country are relying on out-of-state students, who pay higher tuitions, rather than high school graduates from their own state, he said.
“Horatio Alger still exists in this country,” Alexander said, referring to the 19th century novelist who wrote rags-to-riches stories. “The difference now is Horatio Alger has to go to college. That’s our message to the Legislature. Without the higher education institutions, like LSU, you put a serious halt to and a tremendous detrimental impact on the social mobility of this country.”
Southern states appropriated 43 percent of the cost of a college education in 2014, the last comparative survey, said Jim Henderson, head of the University of Louisiana System. At the time, Louisiana paid for 35 percent, leaving individual students with about 65 percent of the costs.
“But that was a couple years ago. Our students now are paying 72 percent,” Henderson said.
Alexander, Henderson, Rallo and other higher education executives will be pointing legislators to a national study released last week that documents how midlevel universities, like those in Louisiana, do a better job of lifting students into higher income brackets — a mission they argue is made more difficult by budget cuts.
“Mobility Report Cards: The Role of Colleges in Intergenerational Mobility” was written by a team of economists from Stanford University, Brown University, the University of California at Berkeley and the U.S. Treasury that cross-referenced tax returns, administrative records, student loans and other databases to track the enrollments and outcomes of 30 million students from 1999 to 2013.
The survey documented, by institution, how many lower and middle income students were admitted — 69 percent of Tulane University’s student body came from families making more than $110,000 annually, the highest percentage in Louisiana. About 24 percent of Southern University’s student body came from families in the bottom 20 percent, or less than $20,000 per year.
The study also showed how much money the students made at the age of 34. Xavier University was the highest, with a median income of $48,400. LSU was second with a $44,000 median income for 34-year-olds.
Most importantly to Louisiana college leaders, the analysis measured the likelihood of a student moving up two or more income brackets. At 37 percent, Southern’s “mobility index” was among the highest in the nation. Harvard University was at 11 percent. Mid-tier public universities around the state scored well on that matrix.
“The study validates the notion that our education is a pathway to improved livelihoods, and it makes policy sense to provide that opportunity to as many people as possible,” said Joseph Savoie, president of the University of Louisiana at Lafayette. “Budget cuts result in a higher cost, which diminishes access. It’s a pretty straightforward disinvestment in out future.”
Students from top 20 percent of income category
Share of student bodies whose families who made $110,000 or more per year.
Tulane University: 69 percent.
LSU: 49 percent.
University of Louisiana at Lafayette: 34 percent.
Southeastern Louisiana University: 28 percent.
UNO: 25 percent.
Xavier University: 17 percent
Southern University: 9 percent
Dillard University: 7.2 percent.
University of Alabama: 59 percent.
Harvard University: 67 percent.
Students who come from bottom 20 percent income level
Share of student bodies whose families who made $20,000 or less per year.
Dillard University*: 27 percent
Southern University: 24 percent
Xavier University*: 16 percent
UNO: 12 percent.
Southeastern Louisiana University: 10 percent.
University of Louisiana at Lafayette: 8.2 percent.
LSU: 6.7 percent.
Tulane University*: 3.9 percent.
University of Alabama: 4.1 percent as is Arkansas and Kentucky.
Harvard University*: 4.5 percent.
Median income of students at age 34
Xavier University*: $48,400
University of Louisiana at Lafayette: $39,200
Dillard University*: $36,700
Southern University: $34,200
Southeastern Louisiana University: $34,000
No data available for Tulane*
University of Alabama: $44,300
Harvard University*: $81,500
Overall mobility index
This measure reflects both access and outcomes, representing the likelihood that a student would move up two or more income brackets.
Dillard University*: 38 percent
Southern University: 37 percent
XavierUniversity*: 34 percent
UNO: 25 percent.
University of Louisiana at Lafayette: 22 percent.
Southeastern Louisiana University: 20 percent.
LSU: 17 percent.
No data available for Tulane University*
University of Alabama: 15 percent.
Harvard University*: 11 percent.
* privately financed universities
Source: “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility”
Comparison of higher education budgets over the past decade
Fiscal Year 2016-2017
Higher Ed total budget: $2,590,753,222
State General Fund contribution: $919,280,212
Cost of Instruction: $852,496,254
Cost of Research: $183,070,013
Cost of Salaries: $1,075,024,199
Fiscal Year 2006-2007
Higher Ed total budget: $2,566,385,441
State General Fund contribution: $1,161,442,991
Cost of Instruction: $882,520,275
Cost of Research: $181,925,845
Cost of Salaries: $1,259,110,613
Source: Board of Regents