Rising Health Care Costs Limiting Middle-Class Edu. Opportunities, says Governor

by Mike Morrow on June 18, 2011

Middle-income families are the ones facing the most pressure on tuition increases at state colleges and universities, Tennessee Gov. Bill Haslam said Friday. And he reiterated a theme he’s been hitting on a lot lately — that health care costs are the reason higher education is getting financially squeezed in Tennessee.

Haslam was commenting on news this week that the University of Tennessee’s Knoxville campus is seeking a 12-percent increase in tuition when the UT Board of Trustees meets next week. Tennessee Board of Regents schools, meanwhile, are looking at potential increases of 8.8 percent to 11 percent for the coming school year.

Haslam, who as governor is chairman of both systems, will attend meetings of the two organizations next week where tuition will be addressed. The UT Board of Trustees meets Wednesday and Thursday. The Board of Regents meets Thursday and Friday.

“We have a major issue around keeping college affordable for middle-class families in Tennessee,” Haslam told reporters Friday after a speech to a state convention of veterans in Nashville. “I think the TBR schools and the UT schools need to make sure they’re doing everything to keep costs down.

“But we also have to be realistic. Part of their problem is we’re giving them less funding as a percentage of their budget than we used to, and it’s quite a bit less. If you look at our budget now compared to 30 years ago, so much more of the state’s budget is taken up with health care costs. That had to come out of somewhere, and where it’s come out of, frankly, is higher ed.”

Haslam had already put a 2-percent cut to higher education in the state budget this year. He has repeatedly talked about health care expenses when discussing a lack of funding for higher education.

The state recently approved applying Hope scholarships to students taking summer classes, but even with that move the state had to impose an overall cap of 120 hours for the scholarships because of limited funds from the lottery.

The governor put a finer point on the issue Friday when he talked about how tuition affects students and their families.

He said the state had maintained its funding well on basic K-12 education in the last 30 years but that government has slowly trimmed funding for its universities at the same time.

“That’s a discussion I want to have: How can we make certain we’re running both systems — and each campus — as inexpensively as possible?” he said. “We have to do that.”

Haslam said that when meeting tuition costs, middle-income families have a tougher time obviously than higher-income families, but often also even than lower-income families.

“Most of our lower-income families through scholarships and grants can have tuition,” Haslam said. “They’re not totally taken care of, but they’re not in horrible shape.

“Families of more upper means are obviously OK. The middle-income families are the ones where their kids are working and taking on loans, and we’re about to price them out of it — right when we need to increase the percentage of students with degrees. So it’s a major challenge. It’s a long-term trend that the state has been involved with.”

Haslam made a speech in Memphis on Wednesday where he emphasized the need to produce more college graduates in Tennessee to meet the demands of a modern workforce. He has cast that issue as one of the keys for the state to compete for jobs, which factor into the state’s overall economic future.

“The challenge for us is to try to figure out how to keep funding higher education,” Haslam said Friday. “And their challenge is to take out as much cost as they can out of the system.”

The University of Tennessee Board of Trustees oversees campuses at Chattanooga, Martin and the Health Sciences Center in Memphis as well as the flagship campus in Knoxville.

The Tennessee Board of Regents is comprised of 46 schools and is the sixth largest system of public higher education in the nation. Its universities include Austin Peay State University in Clarksville, East Tennessee State University in Johnson City, Middle Tennessee State University in Murfreesboro, Tennessee State University in Nashville, Tennessee Tech University in Cookeville and the University of Memphis.

The Board of Regents also oversees 13 community colleges and 27 technology centers.

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