An acceptable increase

If you’re going to enroll for the fall of 2009, it looks like you are going to pay a bit more in actual dollars to go to school at Portland State.

But in another sense, you’re not going to pay anymore. This is why it is acceptable that the university raises tuition by the estimated 3.6 percent for the 2009–10 school year.

Likewise, it’s necessary to continue combating the subtle little lie that the public isn’t coughing up as much money as they used to—or the lie that budget “cuts” are the culprit for increased tuition.

In fact, tuition increases across the country have slowed relative to inflation. Last year’s inflation rate was 3.85 percent. So, in terms of dollar value, a tuition increase of anything less than that is a relative bargain.

You may notice Gov. Ted Kulongoski’s proposed funding increase for the Oregon University System in the 2009–11 biennium, if approved, would be 5 percent more. Shouldn’t this go to making tuition cheaper?

No. As quoted in the Vanguard earlier this month, PSU President Wim Wiewel said “to talk about affordability at all is pointless. If you can get in cheap but the school is terrible, what is the point?”

It’s not entirely clear that the governor’s budget will be approved; as Wiewel said in a recent speech, “No one was surprised to hear that the Oregon state Legislature has predicted 5 percent to 25 percent cut for the Oregon University System budget for the next two years.”

It may well be approved, though, if even sizeable portions related to the federal economic stimulus package, passed on to state governments, move through Congress.

Still, one must be careful with terms such as “budget cut.” The Legislature increased state support from the 2005–07 level of $706 million, a whopping 23 percent to $870.4 million. This doesn’t even include increases in federal and state funding for financial aid, such as the Oregon Opportunity Grant.

Funny—this has the effect of making the governor’s proposed 5.5 percent increase to $917 million look modest.

So even the most pessimistically forecasted cut of 25 percent wouldn’t even really be much of a cut at all. Meanwhile, media repeats the myth that state support has decreased.

“Time and again in the past, when faced with similar funding shortfalls, lawmakers have chosen to reduce public support for Oregon’s system of higher education, and instead leave the universities with little choice but to raise tuition,” says Rick Attig of The Oregonian.

And another: “Historically, when Oregon has had money troubles, higher education was the first place the Legislature looked to find some,” David Sarasohn wrote [“College students’ next lesson: bad economics,” Jan. 11, The Oregonian].

What certainly are dropping, at least for PSU, are private endowments—from $37 million in 2008 to only $26 million this year, due to marked value decreases.

Meanwhile, Oregon State University raised $126 million last year and University of Oregon’s 2001–08 successful campaign raised $853 million—an average of almost $122 million a year.

And this is why it’s good that Wiewel’s administration is going in the right direction. Seeking to “double external grants and contracts over the next six years and increase philanthropic support” is an important undertaking for the next year.

Examples of recent successful endowments and gifts range from the Harold Schnitzer Family Program in Judaic Studies (which includes a fully endowed chair by Lorry I. Lokey), the $8 million gift from the Massiah Foundation and the $25 million matching grant by the Miller Foundation.

Such gifts prove Portland State academics have the ability to attract outside donation and investment, and can someday rely less on public funding.

Granted these, and even the University of Oregon’s endowments, pale in comparison to what the University of Washington’s endowment last year was: $2.7 billion.

Still, UW’s large endowment is not for tuition (in-state tuition is still close to PSU’s). It is to fund quality programs, attracting yet more donations.

And a sizeable portion ($100 million), of UO’s endowment will go directly to student scholarships and grants. But this is not the purpose of its bulk. 

So don’t make the mistake, as pundits such as David Sarasohn do, of conflating tuition increases inseparably with declines in endowments—saying that our endowment value’s drop is what makes the margins here “especially narrow.”

The fact is that compromises are made. Wiewel said that cuts will be made, but not to the detriment of quality—and if tuition rises only 3.6 percent next fall, we ought to be glad. It could have been higher.