Paul J. Gessing
There are many paths to reform, but the path must be taken. Our higher education system is in need of more than just cosmetic reforms.
The Rio Grande Foundation has spent a lot of time recently discussing reform and transparency in New Mexico’s higher education system.
According to a recent audit, problems include nepotism, millions of dollars of unbudgeted spending, lack of control of cash deposits, untracked student loans, and material weaknesses and substantial deficiencies in internal financial records.
The Martinez Administration assigns blame to the prior administration, but higher education is a sprawling bureaucracy that spends nearly $3 billion annually. Even the most sincere efforts to reform the system face intractable challenges.
In FY08, about $17.39 per $1,000 of personal income was dedicated to higher education in New Mexico, while the national average was about $7.00. Our state is second highest in terms of state and local support per $1,000 of personal income.
What are taxpayers getting for their money?
What are the taxpayers of New Mexico getting for their money? Not much, according to CollegeMeasures.org. According to the site, the state’s institutions underperform relative to other states.
New Mexico is ranked 46th when it comes to student graduation rates, and its first-year retention rate is the worst in the nation. This points to issues both in student preparedness and whether we as taxpayers are spending too much on higher education relative to other priorities (possibly including improvements to our K-12 system that result in better-prepared students).
At this point, it is worth questioning the premises of massive state subsidies for higher education. The justification is usually that it is worth it for taxpayers at large to use government to promote education for the future leaders of our society and to promote the existence of an informed populace in general.
These sound great, but the primary beneficiaries of higher education are the students and families of those who actually obtain the degree. Currently, about 25 percent of New Mexicans have such degrees. While not universally true, it is generally accurate to note that these are the highest-earners in our society and come from families of higher-than-average wealth.
Unfair to lower-income taxpayers
This is by no means a knock against higher education, its benefits, or those who spend the time to attain it. We at the Rio Grande Foundation want New Mexicans to work hard and earn high salaries. The problem, of course, is that it is unfair for taxpayers of lower incomes to be subsidizing the educations of wealthier citizens. More importantly, at least in the area of cost-containment, asking students, not taxpayers, to pay a greater percentage of the bill for higher education could restrain the out-of-control cost of a diploma.
According to a report in Forbes, over the past quarter-century, the cost of higher education has grown 440 percent. That is nearly four times the rate of inflation and double the rate of health care cost increases.
Obviously, the rapid increase in the cost of higher education is unsustainable. The dustup over rapidly-growing student debt is one manifestation of the problem of out-of-control inflation in higher education. Once that financing tool plays itself out (and every indicator is that parents and students are no longer willing to pile up mounds of debt for school), the schools and state governments will have to do something to restrain spending.
The path must be taken
What specifically might be done to constrain costs in New Mexico higher education is an in-depth topic needing its own discussion, but there can be no doubt that room for improvement is both available and, as the audit discussed at the outset illustrates, essential.
Technology must be leveraged in ways that increase student access at lower costs. This could have the salutary effect in New Mexico of reducing the proliferation of branch campuses. Alternatively, subsidies might be targeted at students themselves as opposed to the institutes themselves or targeted at those areas in science, technology, engineering and math that are in greatest demand in today’s economy, but where talent is in short supply.
There are many paths to reform, but the path must be taken. Our higher education system is in need of more than just cosmetic reforms.
Paul J. Gessing is the president of New Mexico’s Rio Grande Foundation, an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.