TCF senior fellow Jen Mishory submitted testimony to New York State Committee on Higher Education for a hearing on public higher education costs. Her testimony, a version of which is reproduced below, lightly edited for web publication and clarity, outlines to the committee research on national trends in affordability challenges across the country and how those trends relate to challenges in the state.

Thank you to Chairwoman Stavisky and members of the committee for inviting me to testify. My name is Jen Mishory, and I am a senior fellow at The Century Foundation, a national think tank focused on reducing inequality.

My education colleagues based here in New York, Yan Cao and Taela Dudley, work on a range of New York-specific education issues, but my work at The Century Foundation focuses more broadly on higher education finance and affordability. I plan to share our research on five relevant national trends at the federal and state level, and will touch on how those trends have played out here in New York. 

First, the cost of college has increased significantly for today’s students, in part due to state disinvestment: funding per student has fallen by about 11 percent in the past twenty years, with significant dips during recessions that most states never recovered from. At the same time, the cost of delivering education has risen significantly. Combined, those two factors mean that today, much of public education is privately funded: the individual student’s share of public college costs is about 46 percent. This change has occurred at a time when more low-income families are enrolling in college—a positive trend—but it means that costs have risen for people who can, on average, afford less. In fact, many families can afford far less: because wages for the lowest income earners have declined in the past three decades, it’s even more difficult for the families furthest down the income ladder than it would have been even if college costs had remained flat.

The good news is that in many ways, New York does better than many other states in its aggregate support for public colleges. But tuition has still increased for New York students at a time when New York schools as a whole are almost certainly mirroring national trends and serving a lower income population than ever before.

New York does better than many other states in its aggregate support for public colleges. But tuition has still increased for New York students at a time when New York schools as a whole are almost certainly mirroring national trends and serving a lower income population than ever before.

Second, most states fund their community colleges, which serve a far more racially diverse and a much lower income population, at lower levels than they do their four-year institutions. Some of those disparities relate to research or other costs that universities incur that two-year schools do not. But analysis by a task force convened by The Century Foundation on funding community colleges found that even when accounting for those differences, community colleges serve students who are far more likely to be low-income, yet receive on average fewer resources than four-year institutions: public research universities are able to spend 60 percent more per student on education and related services (which does not include their research activities) than can community colleges. Community colleges are also the first place workers turn to during an economic downturn if they lose their job and look to re-skill, meaning that enrollment skyrockets just as state budgets feel the squeeze and ask schools to do even more with even less.

Those differences are clear here in New York. While the state does better than many states at funding the operations of their four-year institutions, the state provides less funding per student at its community colleges, and is below average in state appropriations per student at community colleges. This disparity seems to be at least partially responsible for the fact that community colleges in the state charge some of the highest tuition in the country.

Third, the challenge of covering non-tuition costs is significant. At community colleges, it accounts for 70 percent of the total cost of going to school. Those challenges are particularly difficult in high-cost regions like New York City, and for today’s student—an adult with children of their own; a student who is the first in their generation to go to college, and may not have the background experience in their family about how to navigate the financial aid system; or someone from a low-income background who is one of 70 percent of students who work to cover these costs, but who may have no real cushion to rely on for the unexpectedly high textbook cost or rent hike. 

Fourth, financial aid, such as Pell grants or the Tuition Assistance Program (TAP), does help bring down the cost of college for many students, but too few people know, understand, and then apply for aid because the system is difficult and complex; eligibility criteria often leave out or limit aid to underserved and under-resourced students; and aid resources are often simply not enough to cover the scale of the need. 

Fifth, these trends mean that student debt is growing. Nationally, the average debt for a four-year graduate hovers just under $30,000 (though when it comes to repayment, public colleges nationally are also responsible for a disproportionately small share of defaults as compared to the for-profit sector). New Yorkers similarly struggle with debt: 59 percent of four-year public undergraduates carry an average of $31,000 in debt.

College completion also matters a lot, and repayment outcomes such as delinquency or default are worse when a student takes on debt and leaves without a degree. Beyond repayment success, however, student debt can also put a drag on other choices that may lead to longer term financial security. And high costs and the prospect of relying on debt deter students from enrolling at all, particularly those with a flimsier safety net, for whom debt may be a riskier endeavor.

Indeed, joint analysis between The Century Foundation, Demos, and the Roosevelt Institute shows that the burdens of student debt are held unequally and inequitably: in particular, black students need to borrow more because they have less family wealth, and black borrowers struggle more in repayment, with fewer family resources to rely on than white students and a discriminatory labor market that pays black workers less. Women also take on larger student loans and have less income to pay back those loans due to the gender pay gap. Taking on debt may be necessary to get ahead in an economy that still provides a significant wage premium for a degree, but a debt-financed system, rather than a public investment-financed system, can reinforce the racial wealth gap and other disparities.

Some states have started to take a more comprehensive approach to tackling affordability challenges. For example, Century is participating in a multi-stakeholder effort in California to develop a plan to reform the state’s Cal Grant program, removing eligibility barriers and covering enough non-tuition costs to account for financial need, or at least get close. The proposed framework creates an “affordability guarantee” to students, or a clear commitment to them on what they will be expected to pay. These efforts rest on research that having a clear and effective message about college costs can make a difference, and that it also brings state policymakers to the table to make good on that guarantee. Similarly, Washington State passed a bill last year requiring that their local large employers help fund training for their workforce, and has made a large-scale investment in their financial aid system that created a free college guarantee for low and moderate-income families, as well as fully funding their existing need-based grant aid program.

The federal debate has also shifted. The House Higher Education Act proposal released last week [the week of October 14th] would fund free community college for states willing to cover one-quarter of the cost. That proposed investment was actually a part of a broader federal–state partnership framework that would, if funded, create debt-free options for states to buy into. And the 2020 debate is full of large-scale proposals to make college free, debt-free, or far more affordable. 

These new federal proposals primarily center on an affordability guarantee to students, and universally rely on a continued and expanded role for states in supporting their public higher education system. They invite states like New York to be a willing partner on behalf of their students and their own future economy.