Monday February 24th kicks off the last week of the Legislature’s public hearings into Governor Hochul’s proposed budget. One of the biggest issues under the microscope this week: the financing of higher education.
The title of the hearing should be “promises made, promises broken.”
For decades, New York offered the neediest public college students assistance that covered full tuition through the Tuition Assistance Program (TAP) at the State University of New York and the City University of New York. While the relationship between the two – SUNY tuition and the maximum TAP award – was unwritten, the promise was there for decades. However, that promise was broken in 2011.
Starting with the Cuomo Administration, the maximum TAP award was frozen as the state continually raised public college tuition. In the former governor’s first year, New York adopted a new approach that would annually raise public college tuition rates but keep the maximum TAP award “frozen.” The plan called on the public colleges to use their own resources to cover the difference between the maximum TAP award and the cost of public college tuition.
That “gap” swelled over time and became known as the “TAP gap.”
The policy of keeping the maximum TAP award frozen while increasing public college tuition destabilized some SUNY colleges. Over time, the “TAP gap” eroded public colleges’ finances as they were regularly being asked to cover rising tuition costs for their poorest students. For example, institutions like Buffalo State University were already cutting programs, freezing hiring, and offering voluntary separations to reduce costs. The devastating one-two punch of higher public college tuition and frozen TAP further strained institutional budgets, reducing tuition assistance revenue and deepening financial challenges.
Independent colleges were hit too. Students attending those institutions also are eligible for TAP. Since TAP awards were frozen, those campuses also had to figure out ways to cover the financial assistance that would normally have come from the state’s TAP.
Adding to that financial hit, New York State was cutting back its direct support of colleges in the independent sector as well.
Aid to certain non-public colleges and universities, popularly known as Bundy Aid, is a program that provides direct unrestricted financial support to independent postsecondary institutions located in New York State. The program was established in 1968 through a Select Committee charged with “how the State can help preserve the strength and vitality of our private and independent institutions of higher education and at the same time, keep them free.” The Committee’s report recommended that “the moderate but real level of need calls for direct assistance from New York to private colleges and universities.” Distribution of the assistance is based on a formula derived from the number of degrees an institution has granted.
Once a vital component of independent colleges’ finances, the program has been decimated by cuts over the past four decades. The peak state support occurred during the 1989-90 fiscal year, when nearly $114 million was appropriated. During the current fiscal year, that amount has been reduced to nearly $22 million. If New York had merely kept pace with inflation, the amount of Bundy Aid should be around $260 million – not $22 million.
Not surprisingly, many colleges – usually small ones – have seen their finances stretched to the limit – and beyond. New York has seen six colleges (a total of ten degree-granting institutions) shut their doors in only the last two years, throwing their students into educational uncertainty and potentially, entire communities into economic insecurity. One recent example was the closure of the College of St. Rose in Albany, N.Y.
Originally designed to uphold the strength and vitality of independent institutions of higher education, Bundy Aid once stood as a testament to the state’s promise to keep that sector alive. The devastating cuts over the past three decades have left too many teetering on the financial brink – another “promise” broken.
But you’re wondering, why should we care?
The answer is that colleges not only educate the adult leaders of the future, but they are also dynamic “economic engines.” These economic engines create jobs that stimulate and anchor local economies. They offer a stimulus to local economies that are virtually guaranteed to succeed. For example, SUNY’s economic impact in New York State is $28.6 billion. For every $1 invested in SUNY, New York State’s economy benefits the equivalent of $8.17 and is responsible for nearly 2% of the gross state product.
The benefits are generated by independent colleges too. In fiscal year 2022-23 independent colleges and universities in New York State contributed an estimated $97 billion to the state’s economy and supported more than 407,000 jobs.
Whether the state’s political leadership agrees that New York’s economic future hinges on a robust system of higher education – and therefore they decide to make good on their so far broken promises – only time will tell.