2016 presents financial challenges and potential policy changes for higher education institutions across the nation

higher-educationStudents who applied early to the University of New Hampshire will know by the end of the month if they were accepted. Then many would-be Wildcats will start biting their nails, waiting for their financial aid letter. Four years’ tuition and fees at UNH can put families back over $67,000 — roughly what the typical New Hampshire household earns in a year.

The university’s high prices are an extreme example of rising college costs that have affected students in every state. Paying for college has become a financial strain on middle-class families across the country, and a source of anxiety for recent graduates saddled with student debt.

This election year, Democrats, in particular, want to rally voters behind their plans to make college more affordable. UNH — a flagship university in a state that votes early in the presidential primaries — has become a key stop on the campaign trail. “No student should have to borrow to pay tuition at a public college or university,” Hillary Clinton said at an event there in the fall.

But while the presidential candidates debate major new investments in public higher education, states will spend 2016 pursuing a more modest agenda. States only have limited funds to work with, even as many lawmakers say they want college to be more affordable and states aim to increase the share of residents who hold a postsecondary degree or certificate.

“The pressure on higher ed budgets is going to continue. So the question is, how do states navigate that?” said Andrew Kelly, director of the Center on Higher Education Reform at the American Enterprise Institute (AEI), a right-leaning think tank in Washington, D.C.

Rather than blockbuster new investments, expect 2016 to bring tuition freezes, tweaks to scholarship programs, and policies that push institutions to do more with existing funding. Even ambitious-sounding changes, such as eliminating tuition for community college students, likely will be targeted to limit state spending.

Boost State Spending

One way for states to bring down tuition is simply to spend more money on colleges and universities.

Public colleges are still a bargain compared to private alternatives, thanks to state subsidies. In-state tuition and fees at four-year publics averaged $9,139 in 2014, according to the nonprofit College Board. Combined tuition, fees, room and board charges were less than half the price of the average private nonprofit college. And students who receive federal, state or institution grants pay less.

Next page: What are states doing?

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