A scholar specializing in higher education policy offered insight based on decades of research and ripped the track record of Montana’s financial aid system Thursday during the Student Assistance Foundation’s Montana College Affordability Summit.
“I’m kicking shins a little bit right now,” said keynote speaker Thomas G. Mortenson to an audience of about 50 people gathered at the Great Northern Hotel for the summit. “You’ve been coasting along for at least 20 years in Montana. It’s about time you wake up.”
Mortenson, who describes himself as a “numbers guy,” is the senior scholar at The Pell Institute for the Study of Higher Education in Washington, D.C., and an independent higher education policy analyst living in Oskaloosa, Iowa.
“Shifting the cost of higher education from taxpayers to students when you know a growing share of your population is low-income and can’t afford even the first dollar of higher education …” Mortenson said, pausing for effect and hitting himself on the forehead. “I’d use stronger language, but I think that serves.”
In a global economy that puts a premium on those who are highly educated and have specialized skills, having a college education is critical not only for people’s individual success, but also for the country’s long-term economic growth, Mortenson said.
He said that data clearly shows that there is a growing divide in higher education attainment between those from high-income and low-income families — and that the number of low-income households is growing nationwide and in Montana.
“We have made terrific progress since 1970 in increasing baccalaureate attainment in the United States — almost entirely with kids from the top half of the income distribution,” Mortenson said. “We’ve done next to nothing for these kids from the bottom half.
“These poor kids have made terrific progress on high school graduation rates; they made terrific progress on entering college after high school; they have made no progress at all in 40 years in baccalaureate completion. None. None.”
Ninety-three percent of Montanans 25 or older have a high school diploma — the highest proportion of any state in the country, according to Mortenson.
Despite this fact, in Montana — and in virtually all other states — students seeking a college degree receive far less now than they did a few decades ago in the way of state-provided, need-based financial aid, Mortenson said.
In 2000, Montana ranked 10th in the country in low-income college participation rate. By 2010, Montana had dropped to 24th.
of low-income families
At the same time state funding for higher education has dropped, the number of low-income households in Montana is growing, Mortenson said.
The number of K-12 students in Montana approved for free and reduced lunches has gone from 29 percent in 1989 to 43 percent in 2011.
The families of these students do not have the financial ability to pay for their children’s college education.
“They are entirely dependent on the financial aid system,” Mortenson said. “There’s no excuse for saying, ‘I didn’t know this was happening.’ This data has been around for more than 20 years.”
Montana’s need-based financial aid track record
“This is where I’m really going to kick shins, I mean this,” Mortenson said. “We know how many low-income kids there are in college in Montana — they’re called Pell Grant recipients, and the question is how does the state aid these low-income students?”
In 2010, there were 23,425 Pell Grant recipients in Montana. The same year, the state provided only 2,564 need-based grants to college students.
“About 10 percent of the low-income population was aided by a state, need-based grant in 2010,” Mortenson said. “As an outsider, I ask the question, ‘If Montana only cares to assist 2,564 of its own low-income students, why should taxpayers in the rest of the country support the low-income students that you’ve chosen not to support?’”
The disparity between state and federal financial aid becomes even sharper when dollar amounts are compared.
In 2010, there was about $87.7 million in federal Pell Grant money going to low-income Montana college students. The state provided $4.3 million in need-based grants.
“In other words, for every dollar that Montana put into the program, federal taxpayers put $20 into helping their own kids,” Mortenson said. “(You’ve) got a growing low-income population that must be higher educated and this is, in my view, just a shameful record of Montana’s support for its own low-income kids.”
Higher household income and likeliness to earn college degree
In 2011, only about 10 percent of people nationwide coming out of families making $35,000 a year or less earned a college degree by age 24, according to Mortenson’s research.
That figure jumps to 15 percent for those from families with household incomes between $35,000 and $65,000; 30 percent for those coming from families making $65,000 to $100,000; and 71 percent of people from families with household incomes greater than $100,000.
“Really, we’re talking about a system that very unfairly tracks students, through no fault of the students themselves,” Mortenson said. “It just doesn’t support low-income students the way they move through the education system.”
Montana taxes and state-funded higher education
Citing data from the Tax Foundation in Washington, D.C., Mortenson said that compared to those in other states, Montanans are tight-fisted when it comes to paying taxes.
Since 1997, state and local taxes have made up 9 to 10 percent of personal income nationwide.Over the same timeframe in Montana, state and local taxes have always been below that national average.
From the 1960s to the 1980s, Montana allocated $10-$13 per $1,000 of personal income for higher education.
By 2012, that amount had dropped to $5.82 per $1,000 of personal income, Mortenson said.
In 2010, the state ranked 38th nationwide in state and local tax burden, according to the Tax Foundation’s numbers.
Need for revenue shifts public universities’ recruitment policies
In Montana, as in other states, many public universities have raised tuition and shifted the types of students they recruit to make up for decreasing state funding, Mortenson said.
He said public universities divide possible recruits into three categories:
“Nonresidents, because they pay the most in tuition — typically two-and-a-half-to-three times what state residents pay; then state residents who can afford to pay without financial aid, so they don’t cost the institution any money; and the lowest priority are the low-income students where the institution is clearly going to have to dig into its pocket to pay a part of the cost of attendance.”
This has led to a spike in the number of out-of-state students enrolling in Montana colleges and universities.
In 1986, 849 more Montana high school graduates left the state to go to college than out-of-state high school grads came to Montana seeking higher education, Mortenson said.
By 2010, that trend had shifted 180 degrees — 995 more freshmen came to Montana institutions of higher learning than left the state to go to college.
“Are these nonresidents displacing Montana kids in the university system?” he said. “I don’t know that, but that’s the threat.
“We’re in a death spiral — that is, our universities are turning away from the state, and the state is turning away from the universities,” Mortenson said. “It’s not in the interest of either the state or the universities to pursue this, but that’s the kind of consequence of this kind of practice.”