Public higher education keeps defying the laws of supply and demand, relentlessly raising prices without depressing enrollment.
How? By shifting costs once borne by taxpayers onto students, who then shift the costs back onto taxpayers by taking out federally guaranteed student loans: $1.2 trillion in student debt at last count — a tripling over the last decade and now exceeded only by credit-card debt.
Forty million educational borrowers owe an average $29,400 each. In Kentucky, where 62 percent leave college in debt, the average owed is lower — $22,384 — but so are per capita income and earning prospects.
In 2001, about two-thirds of higher-ed costs in Kentucky were borne by the state and a third by students. That ratio has flipped. Since 2008, Kentucky has cut inflation-adjusted per-student funding to colleges and universities by a third.
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Also, 2008 was the last time that the Kentucky Community and Technical College System received any state funding for construction.
So, KCTCS is proposing a new way to shift costs: a mandatory fee on students to help repay a $145 million bond issue to construct academic buildings, traditionally a state responsibility. Gov. Steve Beshear and the House have endorsed the fee, which awaits only Senate approval.
The fee would pay about 75 percent of each project; the colleges would raise the remaining $49 million from their respective communities.
Kentucky's community college tuition and fees already exceed that of our border states and 12 others tracked by the Southern Regional Education Board. Increasing KCTCS's $4,200 yearly cost, even by the proposed average $72 a semester, should not be undertaken lightly.
At the same time, a system that has more than doubled in size, reaching 108,301 students in 2011, has building needs.
KCTCS enrollment has since dropped to 92,365. More jobs in an improving economy account for part of the decline. But it's also possible that prospective students have been deterred by the steep financial threshold on what is supposed to be higher ed's open door.
In another worrisome metric, the six-year graduation rate for low-income Kentuckians has fallen from 46.2 percent in 2009 to 34.5 percent in 2012, while graduation rates for underrepresented minorities have improved and overall rates ticked up slightly.
Although Beshear and the House propose $520 million in debt for campus construction, they would keep cutting operating funds and divert $76 million in lottery proceeds from student financial aid to the General Fund. Meanwhile, other states are reinvesting in higher education.
So where does all this leave KCTCS? In other states, local tax support for community colleges helps keep costs low, one reason Kentucky's two-year schools must charge so much more.
While some Kentucky communities have raised money for community college branches and other improvements, there are no dedicated local taxes for Kentucky's community colleges, leaving them to rely on the state, which is dropping the ball.
KCTCS's proposed mandatory fee is not so much a solution as a symptom of the real problem, which is an outdated tax system that does not meet Kentucky's needs. Even if the economy rocketed, our antiquated tax structure could not capture the growth.
And, yet, again, the legislature plans to go home without tackling tax reform.