WA Budget Roundup: Higher Education Gets a Much-Needed Boost with Tuition Cuts

Let's start with the good news

The Washington State Legislature just passed a historic budget that’s already making national headlines for cutting tuition at all of our state’s public institutions for the first time in decades.

Late Tuesday night, the Governor signed a compromise budget proposal which includes tuition decreases over two years of 15% at the research universities; 20% at the regional universities; and 5% at community and technical colleges. This reverses a decades-long trend of tuition increases year after year, with only limited relief in some years from tuition freezes.

Washington Tuition at Public Colleges and Universities (1998-2017)

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Source: WA LEAP and State of Working Washington

There were four major moving pieces at play in the higher education budget negotiations:

  • tuition levels, which have risen steadily over the last three decades, and steeply since the recession;
  • the State Need Grant (SNG), the state’s largest financial aid program for low-income students, which under current funding, serves only about 70% of the over 100,000 eligible students;
  • the College Bound Scholarship (CBS), a need- and merit-based financial aid program offered to low-income students in middle school; and
  • the Opportunity Scholarship (WSOS), a scholarship for low- and middle-income students to promote graduation in STEM and healthcare fields, state funding for which is matched by private donations of up to $50 million per year.

The final budget provides $113 million for tuition cuts and $41 million for the Opportunity Scholarship, with no increases for the State Need Grant or College Bound Scholarship. The two sides also battled over higher ed compensation increases, ultimately settling on a $110 million expenditure for that purpose.

The not-so-good news

The House originally proposed tuition freezes, in lieu of tuition cuts, in order to free up more money for the State Need Grant, but Senate budget negotiators won that battle – in the end actually succeeding in decreasing funding for financial aid, commensurate with lower tuition levels. Decreasing tuition is a good first step toward expanding access to college – and that’s the goal – but the importance of financial aid to low-income students can’t be overstated, and it will have to be addressed in future budgets.

Addressing the tuition crisis

It’s no secret that college costs have become an increasingly greater burden on Washington students and families for decades, especially since the recession. You’ve probably heard the statistics:  tuition in Washington has just about tripled over the last two decades; student debt has reached $1.2 trillion nationwide; and tuition at Washington’s research universities accounts for more than 20% of the median household income – all of which are reasons our Legislature has finally taken decisive action on tuition.

After months of back-and-forth, the Democrat-controlled House and the Republican-controlled Senate agreed on a compromise budget proposal that cuts tuition at our public colleges and universities. Now the Governor has signed the budget, just barely avoiding a government shutdown. Here’s how they got there.

Governor Inslee’s plan

Governor Inslee’s budget plan, introduced last December, included a tuition freeze for the 2015-2017 academic years for all public institutions, and increased funding for the College Bound Scholarship and Opportunity Scholarship.

Inslee’s plan proposed spending $125.5 million to freeze tuition; $125 million to fund over 5,500 more College Bound Scholarships; and $100 million to fund 12,000 more Opportunity Scholarships.

House Democrats’ proposals

The original House budget, proposed in March, allotted more than $200 million to higher education. It spent $106 million on freezing tuition at public institutions for the next two years; increased funding to the State Need Grant by $53 million (which would have closed the gap on unserved students by about 25%); and set aside $60 million to fund the Opportunity Scholarship.

Throughout the negotiating process, however, the House budget was pared down significantly. The last House plan before the budget deal designated significantly less money toward each of these goals, including completely zeroing out the increase in the State Need Grant, which would have gone to many of the over 34,000 unserved eligible low-income students currently going without aid. In addition, support for the Opportunity Scholarship dropped to $54 million, and funding to freeze tuition dropped to $88 million. 

To fund increases, House Democrats had originally proposed a capital gains tax which was rejected during the negotiating process. In the end, they settled for closure of some, but not all, of the tax loopholes they proposed to close in HB 2269, introduced with their last budget pitch.

House Budget Proposals

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Senate Republicans’ proposals

The centerpiece of the Senate Republicans’ higher education spending plan was, SB 5954, dubbed the College Affordability Program (CAP), which would tie tuition at public institutions to the average family income in Washington. If fully funded, it could have resulted in a tuition decrease of as much as 30% at some schools.

Under the original proposal, tuition would be capped at 14% of average family income for research universities (UW and WSU), 10% for regional universities (CWU, EWA, TESC, and WWU), and 6% for community and technical colleges. Although this would have drastically reduced tuition at some four-year institutions, tuition at community colleges would have seen only a slight decrease.

The Senate’s original budget proposal spent $146 million on CAP, and $21 million on the Opportunity Scholarship. It also reduced State Need Grant and College Bound spending to reflect the lower tuition levels. After improved revenue numbers came out in May, the Senate upped its proposal to $245 million toward CAP, and $28 million for the Opportunity Scholarship. None of its plans included increases to State Need Grant or College Bound Scholarship.

Senate Budget Proposals

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In the end:  a compromise

The budget negotiation ended as all good negotiations do:  with concessions from both sides. House budget negotiators dropped demands for increased funding to State Need Grant; agreed to increase funding for tuition reductions under CAP; and agreed to reduce funding to the Opportunity Scholarship. Senate budget negotiators gave up about half of proposed CAP spending, and agreed to increase Opportunity Scholarship spending.

The final budget spends $113 million on tuition cuts under CAP, as well as $41 million on a number of new slots in the Opportunity Scholarship. Tuition will decrease by 15% at the research universities; 20% at the regional universities; and 5% at community and technical colleges. All reductions will be phased in over two years, with a 5% reduction in the first year and the remaining reduction for research and regional universities in the second year. The Legislature did not fund any increases in State Need Grant or College Bound Scholarship, programs whose funding is intertwined.