Proposed law could ease departure from PASSHE
Today in Harrisburg, legislation is to be introduced that could lead to the break-up of the Pennsylvania State System of Higher Education — a 120,000-student, 14-campus network that is entirely worth saving.
Angelo Armenti Jr. saw this day coming. The former 20-year president of California University of Pennsylvania contends the move toward privatization is driven by bad management and bad policy at the highest levels of state government and education. It’s been ongoing, Armenti says, ever since the state system was founded in the early 1980s.
The state system was established on the twin objectives of a high-quality college education and the lowest possible cost to the student. But the member universities — Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock and West Chester — find themselves under mounting financial pressure: rising costs, steadily declining state funding, flat or falling enrollment and a mandate to keep tuition increases at a minimum.
In Armenti’s new book, “Privatization Without a Plan: A Failure of Leadership in Pennsylvania Public Education,” he says the privatization of schools like Slippery Rock, Clarion and Edinboro universities is counter to the PASSHE mission.
Armenti points out that PASSHE’S 20-member Board of Governors consists entirely of individuals appointed by the governor and leaders of the state Legislature, who tend to represent the interests of government and politics over those of PASSHE students, parents, alumni, faculty or private financial supporters. That seems counterproductive to shaping good policy.
It’s also an oddity that the governor sets the maximum annual tuition rate after the Legislature determines its share of the PASSHE operating budget. This is a convention of the past 30 years, practiced by governors of both political parties — and they are reluctant to impose politically unpopular tuition increases. Shouldn’t setting tuition be the job of the Board of Governors?
State-affiliated schools that are not part of PASSHE, such as the University of Pittsburgh and Temple, receive state funding while relying on other funding for most of their operations. They retain some independence and set their own tuition rates, which are considerably higher than tuition at PASSHE schools — around $17,000 a year at Pitt, for example, compared with about $7,000 at Clarion, Edinboro and Slippery Rock. At least in part, this is because their boards are not dominated by political appointees; they can set a higher tuition rate and expect students to pay it.
Under the proposed legislation, any university considering a break with PASSHE would have to buy its state-owned campus, buildings and other properties from the state. They would, presumably, use their multimillion-dollar endowments and cash reserves, or put up their endowments as collateral to finance a purchase. The result would be dramatically increased tuitions — prohibitively high for many.
While such a scanario seems rash, it’s perhaps no less so than the existing one: universities spending down their endowments to cover a steadily widening gap between income and expenses to stave off bankruptcy. On Dec. 24, Slippery Rock University became the fifth PASSHE university to declare financial distress, with a projected $10 million deficit for 2014-15, growing to $29 million the following year.
SRU was prudent not to wait longer to declare financial distress; as of fiscal 2011, it had the second largest fund balance of the 14 PASSHE universities $44.6 million, according to Armenti’s research.
While the issue of underfunded PASSHE schools could play out in any of several scenarios, privatization is not a good option. Privatization detracts from the primary and noble objective of Act 188 — to provide high quality education at the lowest possible cost to the student.
It might be prudent to act promptly on Armenti’s observations, broaden the representation of PASSHE’s Board of Governors, increase state funding while also exploring other strategies to assure the universities’ financial sustainability.
Failure to do something would be failure to look out for our state’s future.
