For-Profit Colleges Chew Up Ohio CARES Act Higher Ed Money

While much of the focus on the $2.3 trillion CARES Act has been on the K-12 funding provided in it, the $13.5 billion in higher ed money was also a large inevstment. However, according to data compiled by the University of Wisconsin, in Ohio, students in for-profit colleges have received more than double the amount of per student funding than students in Ohio's public and private, non-profit colleges and universities.

This is not the outcome that was needed.

Here is the average per student CARES Act funding by college type:

What's also interesting is private, non-profit colleges received more CARES Act, taxpayer funding than Ohio's public universities.

In fact, there is only 1 four-year public university of 14 (Central State) and 8 2-year public colleges (of 69) that received more CARES Act per student funding than the average for-profit college.

How for-profit colleges and private, non-profit colleges receive more per student CARES Act funding than public colleges and universities is shocking. One would think that public stimulus funding should benefit publicly funded institutions more than the non-taxpayer funded institutions.

But what do I know.

In 2002, 75% of Ohioans said college should cost $5,000 a year. For Fall 2019, 5 cost less than $5,000 ... A SEMESTER!

One of the highlights of my journalism career was a series of stories I wrote at the Akron Beacon Journal with colleagues Doug Oplinger and Dennis Willard during the 2002 gubernatorial campaign. It was the first real examination of how Ohio's rankings on various quality of life issues had changed since 1960. And we found that we had become poorer, less healthy and less educated compared with how we stacked up with other states in 1960.

One of the hallmarks of the series (called "Ohio: Look at the State We're In") was a poll the Akron Beacon Journal commissioned from Zogby that asked Ohioans where they thought we ranked on these data points and also where they thought we should head from a policy perspective.

One of those questions was about college tuition. Here's the result from the Day 3 story (which I was the lead writer on):

"According to a poll done by Zogby International for the Akron Beacon Journal, nearly 75 percent of Ohioans felt tuition at a public university should be less than $5,000. Almost 40 percent want the ceiling at $2,500." 

So I decided to look at the Fall 2019 tuition at Ohio's public colleges and universities. Only five four-year schools had tuition below $5,000 ... per semester!

Not a single Ohio four-year college or regional campus cost less than $5,000 a year.

Even adjusted for inflation, that $5,000 in 2002 ($7,619, according to the U.S. Bureau of Labor Statistics' Inflation Calculator) was more than all Ohio public four-year tuition at every public university except Central State.

As a state, we began to turn the corner on Higher Education investment during the 2019 budget, which I commended the state for doing. But wow do we have a ways to go before we can meet that modest expectation of Ohioans from 18 years ago. A ways to go indeed.

DeWine Higher Ed Budget: Where there's hope ...

As we move forward with what could be the most consequential Ohio biennial budget for higher education in a generation, I want everyone to keep in mind the graphic on the left, courtesy of the Education Trust. What it shows is quite simple: It is twice as expensive for Ohioans to attend college in Ohio than it is for Californians to attend college in California (Ohio is the yellow bar; California is the smallest bar on the right).

That's right. Even with California's cost of living being through the roof, it is still half the relative cost of attending college in Ohio.

Why do I bring this up? Because this budget has the potential to make a serious dent in our status at the 8th most expensive place to attend college in the United States. Gov. Mike DeWine and his Lt. Gov. Jon Husted have put a lot on their efforts to get more Ohioans with degrees and high-quality credentials.

But if their budget is any indication, there is still work to do for Higher Education Subcommittee Chairman Rick Carfagna. I'll go through some highlights.

Micro Degrees

Both DeWine and Husted touted their efforts to allow Ohioans to accumulate certificates in as little time as a few weeks (their words), calling these "microdegrees." It's a trendy new movement in education -- quickly attainable certificates that show employers you can do the job you're being considered for. See, here's the problem. What happens when the job leaves, or if the student doesn't end up liking the job? Do those with a microdegree in, say artificial intelligence now have to go for one in data science? How many of these microdegrees will students have to attain in order to succeed in a work environment where they may change jobs 15-20 times?

As I've always said, it's more efficient and effective to educate someone once than train them 20 times.

I'm not saying microdegrees won't be a key component in a state's higher education portfolio. But when investing in them is a state's big play in higher education, I'm not so sure.

Ohio College Copportunity Grants and State Share of Instruction

This is where Ohio could make the biggest dent in the cost issues outlined above. Currently, OCOG provides a pittance, relative to the cost of college --  the result, frankly, of the state cutting the program during the recession and not returning it to its pre-recession level.

But its greatest shortcoming isn't necessarily in the amount of money it provides students; it's how many students can receive these state-level Pell-like Grants. First of all, the expected family contribution limit is $2,190. The EFC for Pell recipients is more than double that. So simply increasing OCOG eligibility to that of Pell would increase the number of OCOG recipients by about 35,000 students.

Also, OCOG has so many limits on it that students end up receiving far less than they should, if any at all. Because it's a Pell-first program, all of a student's Pell award is counted against their OCOG award. And it's all based on tuition. So if a student's Pell award is big enough to cover tuition, their OCOG could be zero. In addition, because of this rule, no student at an Ohio community college or technical school qualifies for OCOG, even though students attending community colleges are the most economically challenged in the state. Finally, OCOG students can only spend the money on tuition and books. However, GI Bill recipients can spent their OCOG awards on more life costs. So there's already a recognition that OCOG could help balance a student's many life costs.

DeWine's budget increases the amount of an OCOG grant by $500 at a cost of about $60 million. But it appears there is no change in who qualifies or what it can be spent on. Instead of spending $50-60 million more on OCOG to give a limited number of students a few hundred dollars more, the state should instead use that additional revenue to bring more students into OCOG. Allow them to get their money, regardless of Pell. Let community college students qualify. And let OCOG be spent on more than just tuition and books.

As for SSI, this is the main source of revenue for Ohio's colleges and universities. DeWine boosts the amount by 1 percent a year in each year of the biennium, which is far short of inflation. Then he tells schools they have to freeze tuition for all incoming students as they progress through the school. So if you pay $10,000 your freshman year, that's what you pay for all four years. Here's the issue: most Ohio colleges and universities already do this, only under this budget they can't make up for these tuition guarantees with additional tuition or fee adjustments, forcing colleges and universities to cut costs somewhere.

Beefing up SSI and OCOG are the two best ways for Ohio leaders to see that yellow bar above slide to the right. As of right now, I fear this budget won't budge that line too much.

STEM Investment

The DeWine budget boosts the Choose Ohio First STEM scholarship from $16 million to $40 million. This is a program to try to get more Ohio students to choose STEM disciplines and only pays for freshman year. My understanding is even at $16 million, Ohio struggles to find enough students for the program. I'm still waiting to see the plans to engage more students for the more than doubling of the program.

Also, DeWine's budget flat funds medical education investment and gives a middling 1 percent increase to Nurse education grant programs. Again, nursing is perhaps the most in-demand STEM discipline in our state's largest employment sector -- health care. It makes sense to invest heavily in this profession.

Over the next few days and weeks, we'll hear testimony about ways to make post-secondary options more accessible and affordable for more Ohioans. I look forward to working with everyone to improve on these efforts. Because our students and economy are counting on us to get this right.