A Must-Have for Pennsylvania Part II:

Investment in Higher Education for Growth and Opportunity
Date of Press Release: 
October 24, 2014

Read the full report

Pennsylvania’s reduced funding of higher education in recent years has led to steep tuition hikes at its public four-year colleges, hefty average student debt and a small share of residents with education beyond high school compared to other states, a new report released today by the Keystone Research Center and the Pennsylvania Budget and Policy Center found. To reverse these trends, Pennsylvania should restore $90 million in cuts to state-owned universities and $20 million to community colleges, and freeze their tuitions for four years, A Must-Have for Pennsylvania Part II: Investment in Higher Education for Growth and Opportunity recommends.                                                                                                                             

“Investment in higher education has a big payoff for states and their residents,” report co-author Stephen Herzenberg, an economist and executive director of the KRC, noted. “When we shortchange higher education, we shortchange ourselves.”

Sens. Vince Hughes, D-Philadelphia, and Jay Costa, D-Allegheny, joined Herzenberg in a conference call with media on the report’s findings. "Clearly, we need to invest more dollars into higher education. Every dollar we spend provides an economic and academic return that cannot be overstated. It is my hope that the future will bring greater commitment to this issue,” Hughes said.

Costa said, “This report demonstrates that the Corbett Administration has failed to prioritize higher education funding.  This lack of attention and focus has resulted in higher tuition bills for students and their families, and unease throughout the whole education community.  We need to reverse course and invest in our students and higher education system.  It makes economic and moral sense.”

Rep. David Millard, R-Columbia, said in a written statement that “while there are many needs in our commonwealth, public education and higher education represent our future.  Funding can be challenging in stressful economic environments.  I stand ready to work together to meet the challenge of providing a quality and affordable education.”

The report’s analysis of Pennsylvania’s funding of its 14 public community colleges and 14 State System of Higher Education universities showed that their tuition and fees are the third-highest at public four-year colleges of all states. Their cost is more than 50% above the national average. The study focuses on these schools because they are the most affordable and accessible to middle- and low-income Pennsylvania families. The report includes state-related higher education institutions (Pennsylvania State University, University of Pittsburgh, Temple University and Lincoln University) in many comparisons with other states.  

Pennsylvania also has the third highest average student debt ($31,675) among graduates of four-year colleges. Inadequate funding for higher education perpetuates Pennsylvania’s low ranking for share of adults, ages 25-64, with more than a high school education. The state ranked 41st on this measure in 2013. The report also gives an overview of insights from economic research about the powerful link between education levels, economic growth for regions, and economic opportunity for individuals, including higher wages. Among the new KRC/PBPC report’s main findings:

  • Since 2010-11, Pennsylvania has cut higher education funding 11.8%, the fifth-largest reduction among states.
  • In 2011-12, Pennsylvania slashed funding for state-owned universities by $90 million, and those cuts have remained in place since.
  • Pennsylvania ranks 48th among states for funding of public higher education per capita.
  • Due to funding reductions since 2010-11, tuition at state-owned universities has increased by 18%, and more than 95 programs have been cut or placed under a moratorium. More than 900 positions at state-owned schools have been eliminated or remain unfilled.
  • In the 1980s, state support accounted for two-thirds of the budgets of Pennsylvania’s four-year public universities. Today, state support has fallen to 25% of those universities’ budgets, which places a greater financial burden on students and their families.
  • Pennsylvania’s college-educated workers earn hourly wages more than three-quarters higher than workers with a high school degree.
  • The unemployment rate of college-educated workers in Pennsylvania is roughly half that of workers with lower levels of education. The state’s college-educated unemployment rate remained under 5% during the Great Recession and has since fallen to 3.6%.

According to Harvard economist Larry Katz, a leading expert on education and growth: “You can make the case for almost all of economic growth being the direct (25%) and indirect (through R&D and technology adoption) result of increased education.” Herzenberg added: “Higher education is a smart investment in our future.”

The Keystone Research Center is an independent, nonpartisan research organization that promotes a more prosperous and equitable Pennsylvania and U.S. economy. Learn more at http://keystoneresearch.org. The Pennsylvania Budget and Policy Center is a non-partisan research project of the KRC that provides independent, credible analysis on state tax, budget and related policy matters, with attention to the impact of current or proposed policies on working families. Learn more at http://pennbpc.org.