Morning Must Reads: Falling State Support For Higher Ed, Rising Student Loan Debt & Tax Expenditures for What?

The third article in The Philadelphia Inquirer series Struggling for Work: Broken Dreams of a New Generation appeared Sunday. It takes a look at the rising student loan burden that college graduates face.

To get educated these days, most students have to go into debt.

And few places have higher student debt than Pennsylvania.

Average debt per student in the commonwealth is more than $28,000, fifth-highest in the country. In New Jersey, average debt is around $23,000.

And the Philadelphia region is home to schools with some of the highest student debt anywhere.

Nationally, the average student debt is about $25,000 per person, according to 2010 figures, the latest reported by the Institute for College Access & Success (TICAS). That's the highest level of student debt in American history, up nearly 43 percent since 1996, in today's dollars.

Seventy percent of Pennsylvania students have loans, compared with 66 percent nationwide. The New Jersey figure equals the U.S. average...

Among Pennsylvania public universities, high tuition often begets high debt. The commonwealth has 22 of the 30 most expensive state schools in America, most of them branches of Penn State, according to 2009-2010 figures, the most recent analyzed by the U.S. Department of Education

Penn State's main campus' tuition of $14,416 was the highest public university tuition in the country in 2010, federal figures show. That's more than twice the $6,397 national average. Current Penn State yearly tuition is more than $15,000...

The bulk of students in America attend public colleges and universities, where state funding nationwide has been cut 2.8 percent over the last two years.

The drop in Pennsylvania's support is more than double that figure, at 7.1 percent.

In the story above, Tim Eller, spokesman for the state's Department of Education, argued that "Even when Penn State received more taxpayer dollars, it still increased tuition." If you are interested in public policy instead of advanced public relations word games, the data makes clear rising tuition is being driven by falling state support. According to John Quinterno in the DEMOS report The Great Cost Shift (PDF), Funding Per Full-Time Equivalent Student in Pennsylvania fell 58% from $8,657 to $5,472 between 1990-1991 and 2010-2011.

While the state reduces support for higher education, a sector critical to the future of the state economy, tax expenditures aimed at business continue to expand despite the state having pretty much no idea whether these investments are effective.

A new report by the Pew Center on the States takes aim at how states use tax incentives to convince and cajole businesses to expand, relocate or just plain hire more people...

Officials in all 50 states spend billions of dollars annually on tax incentives, but half cannot say with any precision whether it’s money well-spent...

As for Pennsylvania and Delaware, both placed in a 12-state group seen as having “mixed results” in matching intent with reality...

Despite Pennsylvania’s not-horrible ranking, the Pew report, called “Evidence Counts,” didn’t have much good to say about the state’s review process. It focused on the state’s Keystone Opportunity Zone program, which was begun during the Ridge administration and provides up to 12 years of tax relief to companies that locate in often-blighted areas.

The state Department of Community and Economic Development (DCED) said in 2007 that the KOZ program had created “nearly 64,000 jobs” since 1999. A year later, the agency lowered that estimate to “less than 35,000,” the Pew report says, and quotes a legislative committee report that said neither figure was reliable...

A December 2010 report, called “Show Us the Subsidies” by the nonprofit Good Jobs First, also criticized the reporting by states on their economic development programs, noting that it often omits information that could help determine if they’re effective.

Finally, a 208-page report in June 2010 by Pennsylvania’s Legislative Budget and Finance Committee highlighted one Stone Age problem: The DCED still relies on paper files rather than a computer-based record-keeping system. Another hitch is that nearly all job creation and retention data is self-reported by companies, with no effort made by state officials to verify the information.

For more on ways to improve economic development accountability, see the Keystone Research Center's issue page.


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