Steve Hicks, President of the Association of Pennsylvania State College and University
“PA Leading the Race to the Bottom in Higher Education.”
Music intro: (Chicago – “Look Away”)
[Rick Smith]: Yeah, well, “Look Away” – 1989 if I remember. Wow, it’s been that long, that long ago. I guess that’s where our governor wants to take our education funding back to. Back to the good old days, back to the…well, almost 90s, the 1890s if you will.
Again, I look at this budget and you want to talk about redistribution of wealth, you want to talk about theft from the working class…I don’t know what other words to use. The numbers are just…just staggering. A total cut of the higher education budget of over $265 million. Understand, that is money that is coming out of working people’s pockets to pay college tuition. That, to me, is a crime. That’s why I’ve asked Steve Hicks, president of APSCUF to come talk to us about what’s going on. The Association of Pennsylvania State College and University Faculties, correct?
[Steve Hicks]: Yes, well, you almost got it. The acronym gives everybody trouble. It’s great that you’re playing a 1989 song because that’s where the funding that the governor proposed would take us back to—to our 1989 level of dollars. ’89 was a great year, right?
[Rick Smith]: Well, yeah, it was a great year in that I was much younger, but things have gone up since then. How much was college tuition back in ’89?
[Steve Hicks]: About $2,000.
[Rick Smith]: And how much is it today?
[Steve Hicks]: A little over $6,000.
[Rick Smith]: So, we’re funding it at the $2,000 levels expecting people to pay the additional $4,000 out of their pocket. I take it as a shift in…a massive redistribution of wealth from workers and their families upward.
[Steve Hicks]: Well that’s exactly right. Every shift of state appropriation dollars is a shift to pulling money straight out of working families’ pockets. In this country, we used to think of public higher education as something that was free, but that’s no longer the case. You know the State System…our main audience is first generation college students and they’re not in a position to be paying exorbitant tuition. One of the outcomes…if it passes as it is…is that fewer young people are going to go to four-year institutions and get college degrees in a time when everyone claims that, economically, we need to be generating more degrees.
[Rick Smith]: You look at the President’s speech, you look at most of the discussion that’s been going on the last 20 years at least—high school not cutting it anymore. Your high school degree isn’t what it used to be, people need to have bachelor’s degrees, master’s degrees, or vocational training even. It looks like as a state and, to a degree, the federal level we’re kind of walking away from that saying, well if you want that better life, saddle yourself with massive debt, which I think is a huge problem. I saw a statistic the other day that said student loan debt that we’re creating is over $1 trillion.
[Steve Hicks]: Yeah, student loan debt is now the second largest type of debt in the country. It’s larger than credit card debt. Only mortgages are larger. There’s big business there and there’s probably money to be made in student debt. I know some people in higher ed financing who think that this is the next big financial bubble.
[Rick Smith]: Yeah, if that pops, it’s all over because you’ve got all these kids graduating from college with degrees…going to these private schools, online, and the University of Phoenix’s, the Waldrons and all these other places. They’re graduating and they’re getting these degrees and they’re not finding jobs.
[Steve Hicks]: No, and you know if you’ve looked into this, the percentage of people who start at the places you named…there’s a very low percentage that finish. So, you’ve invested a good number of dollars, a good number of federal dollars in grant and aid that you’re able to get and you come away without a degree and nobody’s satisfied then. We’ve not made any progress.
You know, the State System has a pretty good record of getting people through. I think we’re pretty proud of our graduation rate based on the kind of students we bring in.
[Rick Smith]: So, I’m looking at this, $265 million in over all higher ed cutting…what’s the number for the State System?
[Steve Hicks]: About $83 million, about a third of what you’re looking at. It’s not just that $83 million. If you’ve got the spreadsheet, the next line after the State System of Higher Education is the Higher Education Assistance Agency, which provides grants to students who can show that they need financial aid…and they cut them 5%. So, not only are you cutting the System itself, but you’re cutting the aid program on the other hand. You’re hitting the student’s wallet in two different ways.
[Rick Smith]: What should we be doing? I mean, there’s this frame that the Right has really pushed masterfully. The idea that somehow we’re broke. We just don’t have any more money we’re broke, we can afford education, we can’t afford health care, we can’t afford public services, we’re just flat broke, that’s it, game over. Suck it up or work at McDonald’s, I guess that’s the argument.
What should we have been doing differently?
[Steve Hicks]: Well, there’s several things we should be doing differently. I’ve seen your guest list for today and they’re all friends of mine from the CLEAR Coalition. We put out a report last week that showed that there are about $2 billion per year that the state has left on the table. Between the kinds of misuses we’ve had as well as the kind of taxes we’ve let fly by. I’m sure you recognize the irony of the fact that the last thing that was voted on before the governor got up and gave his budget speech in the Senate was the Marcellus Shale bill. So, right there we applied a tax to something that we know is going to happen at the lowest rate, actually, at the lowest rate in the country. We’ve left a lot of revenue on the table.
Everybody I’ve talked to who’s been involved in the shale business, and practically every lobbyist in town has a piece of shale business, will tell you that all these shale people were willing to pay higher taxes. They just wanted the bill done so they knew what to pay. They were coming to Pennsylvania, they were putting down wells and they were going to draw the stuff out of the ground, they just wanted to know what they had to pay so they could put it in their cost structure. We let them get away with the cheapest rate in the country…and we’re sitting here and he [governor] gets up a few minutes later and says we don’t have any money.
[Rick Smith]: It’s mind-blowing. And, it’s mind-blowing especially when you look at the fact that West Virginia has a much higher rate, actually pretty rational. I thought that’s where we should have gone.
The governor, last year, said he wanted to be like Texas…it’d be a good way to go, how they deal with their natural gas. But there is something seriously wrong, as I’ve been saying, when we’re pulling a state like West Virginia down, when we’re leading the race to the bottom.
[Steve Hicks]: Right, well and you know we lead the race to the bottom in higher education too. We’ve been 45th for years in per capita investment in public higher education in this country. The governor…I don’t really think he sits down and says I want to race to number 50, but, you know, cutting 20% out of our budget and 30% out of the state-relateds, and 6 or 7% out of the community colleges. You can’t move up from 45th doing that.
[Rick Smith]: Right. Now this isn’t like basic education, K-12, where the burden is going to be shifted downward to the local school taxes. This is going to directly hit the students and their families which could lead to a larger student loan bubble in my opinion, or just fewer kids going to college and more unemployed people, more folks who have less opportunity, less earning potential, which I think comes back and bites us when you’re looking at long-term taxation and revenue coming in.
[Steve Hicks]: You hit a lot of great talking points there. I think one of the things to look at is how much education do we need here in the Commonwealth to compete with those around us. We produce fewer degrees than all of our neighbors on a percentage basis and the number is going down. If we want to compete in the long-term, we need an educated populace. As you said, you can’t keep taking it out of the working class’s pocket. Right now, our average student out of a PASSHE institution is graduating with $23,000 of debt. There’s a quick transference of almost one-to-one between the cut in the state appropriation and how much tuition is going up. It probably means that people will be borrowing more next year or they won’t be going because they’ve reached the end of their borrowing, as much as they want to borrow. You know, most of our students are working a job part-time to make it through. And you know, those extra hundreds that this will add to their tuition bill…when you’re making $8 or $10 an hour, it takes a lot of those hours in a part-time job to make up that money.
[Rick Smith]: It sure does. Let me ask you a last line of questioning. I’ve got a friend who graduated from college back in the late ’60s. She went all the way through the University of Michigan, all the way through to get her law degree, walked out debt free, worked a minimum wage job, lived in her own apartment, walked out with any debt whatsoever. Student loans just weren’t an option then, because the state, as I understand it and the way she explains it, the state and the federal government…they funded these things heavily. Is the rise in tuition…does that have more to do with the fact that every time we turn around the state is pulling money out of these institutions and the federal government is turning their back on higher education? Or, is it the “greedy teachers” who just want more and more and their appetite for more never ends?
[Steve Hicks]: No, I’m not going to go with the “greedy teachers” thing. Our numbers show that our pay scale has just barely kept up with inflation over the last decade. And, to go back to your point, when we started as a system in 1982, 67% of the funding came from the state, 33% came from tuition. With these numbers, we’re pushing more like 75% from tuition, and 25% from the state. So, right there it tells you the redistribution. I mean, you started off by saying it’s a cost shift from the state to the student. That’s why the expense has gone up as much as it has. We’ve more and more put the burden on the student to pay for it. It’s not a public good the way it used to be on the ’60s and ’70s. It’s become—and governor Corbett is big on saying so—if you want a service, you have to pay for it. We don’t care how much it might benefit the state of Pennsylvania for you to have it. The state’s not going to contribute. It’s an ugly trend line.
[Rick Smith]: It’s the idea of the Commons that they have destroyed. The things that are ours, commonly, and the common good…a sad, sad day.
[Steve Hicks]: You know, when the governor sits around the country club with the people he hangs out with, they don’t have any trouble writing college tuition checks. I don’t think he is in quite as in tune with the people who are trying to go to the 14 state-owned institutions.
[Rick Smith]: Excellent point. Steve Hicks, I appreciate the time. President of APSCUF, the Association of Pennsylvania State College and University Faculties. Thanks so much. I appreciate the time.
[Steve Hicks]: Great Rick, thanks for the show.