Cash for College

Posted on March 14, 2006 | Type: Press Release
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Phoenix--With rising tuition and enrollment at Arizona's public universities and colleges expected to grow by 60 percent in the next 15 years, policymakers are looking for new ways to finance higher education. A new Goldwater Institute policy report, Cash for College: Bringing Free-market Reform to Higher Education, takes a close look and finds many current proposals will only make the public higher education system bigger, not better.

Currently, state and local appropriations are made directly to Arizona public universities and colleges. In 2003, appropriations for operating expenses alone, which exclude capital and construction costs, amounted to over $1 billion. Cash for College suggests giving students a portion of state funding directly in the form of grants. Like Pell Grants, these grants would be redeemable at any public or private college or university in Arizona.

Former Arizona Board of Regents Member John F. Munger says, This report presents us with a new perspective on how to make our institutions of higher learning more efficient and responsive to student needs and demands. This vision for higher education funding merits careful consideration by policymakers.

Cash for College outlines how a student grant program could be implemented, building upon Colorado's College Opportunity Fund and the proven track record of Arizona's Private Postsecondary Education Student Financial Assistance Program (PFAP).

The proposed grant program would expand PFAP to give 100 percent of Arizona high school graduates projected to enroll at in-state colleges and universities an annual $5,000 grant to attend a two year institution and $8,000 to attend a four year institution. This amount is roughly equivalent to the subsidy public colleges and universities receive per student today, excluding funding for capital, construction, or other non-operating budgets. By tying appropriations for operating expenses to inflation, the program could save taxpayers an estimated $768 million annually.

Competing for students on a level playing field will give Arizona's public and private institutions of higher learning powerful incentives to keep costs down and improve performance or risk losing students and their education dollars.

Download Cash for College: Bringing Free-market Reform to Higher Education.

Contact:
Starlee Rhoades, Director of Communications, Goldwater Institute, (602) 462-5000 x 226, srhoades@goldwaterinstitute.org

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