February 4, 2008
Federal Mandate on State Higher Education Spending Would Hurt Most-Needy Students
Legislation to be decided this week targets money assisting low-income students
The National Conference of State Legislatures released the following statement regarding the College Opportunity and Affordability Act of 2007:
WASHINGTON -- Students, faculty and the general public will have to turn to Congress instead of their state legislatures under a little-known provision, Section 108 of the College Opportunity and Affordability Act of 2007 (HR 4137), that would strip states of their higher education appropriations authority. Called a Maintenance of Effort provision or MOE, if not met this federal mandate would punish states that fail to maintain or increase their higher education funding to a level set by the U.S. Secretary of Education.
"State legislators keenly understand balanced budgets and making difficult choices among numerous competing priorities, be it health, transportation, kindergarten, education, law enforcement, homeland security and higher education," said William T. Pound, executive director of the National Conference of State Legislatures. "They do not need federal 'guidance' on how to do this, especially given Washington, D.C.s penchant for debt accumulation and unbalanced budgets. This could actually result in an overall reduction of funding for higher education."
The nation’s state legislatures have taken the lead in comprehensive higher education reforms. NCSL recognizes the need to expand access to affordable postsecondary education, but restricting state budgets is the wrong way to reach this goal. Ironically, the federal government is preparing to reduce its higher education funding by more than 8 percent in fiscal year 2008, but the MOE does not apply to Congressional funding. As it's written now, Section 108 mandates that states' higher education appropriations must remain at or above the average rolling rate of the previous five years. The penalty for states violating this provision would be the loss of Federal Leveraging Educational Assistance Partnership (LEAP) money-- funds that go directly to helping low-income students. Thus, the federal government is attempting to limit college tuition increases by coercing states into making budget increases and placing the neediest students at risk.
Not only would this set a dangerous precedent of federal intrusion into state budgeting decisions, but it also may have the unintended consequence of lowering state appropriations to higher education in the long-run. In some years states have budget surpluses, and in other years states face considerable budget shortfalls. The incentive to increase higher education spending during the surplus years will diminish under Section 108 because states would be forced to maintain that higher rate in tough budget years.
Last month, NCSL sent an Action Alert to state legislators across the country encouraging them to urge their Congressional delegates to remove the MOE provision from the College Opportunity and Affordability Act. The measure could reach the House floor as early as the week of February 4.
State legislators and NCSL staff members are available to speak on this issue.
Rep. Rae Ann Kelsch (R- North Dakota), Chair, NCSL Education Standing Committee.
Sen. Robert H. Plymale (D- West Virginia), member of the NCSL Blue Ribbon Commission on Higher Education and NCSL Education Standing Committee.
David Shreve, NCSL Federal Affairs Counsel
Robert Strange, NCSL Legislative Analyst
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