DENVER -- Higher-education institutions across the nation are closely watching a radical new Colorado program that will fund universities and colleges through a voucher program.
''Since higher education is a discretionary line item, legislatures are hitting it hard during these tough fiscal times," said Christine Walton, education-policy associate for the National Conference of State Legislatures. ''All eyes are on Colorado, wondering if this program will work and if they could do the same."
Voucher systems, which began as a means for securing funding at the K-12 level, have never been tried at the college level.
The Colorado program, dubbed the College Opportunity Fund, was signed into law in April, and the first vouchers are scheduled to be issued in the fall of 2005. Colorado already pays about one-third of the cost of college for state residents, a bill that will total $592.4 million for 2004-05. Rather than state colleges and universities receiving funds from the state based on enrollment, each student will designate their set amount of state money to the school of their choice. Although subject to change, that amount has been set at $2,400 for public schools (any state college or university) and $1,200 for three participating private schools.
The controversial approach has both been criticized as an unconstitutional shell game to get around revenue caps and lauded as an incentive for families in a state that ranks among the lowest in the nation for sending high school seniors to college.
Although vouchers won't be issued until next fall, the University of Colorado has already put to use a part of the program, which releases higher-education institutions from revenue caps. Under the voucher program, schools that receive less than 10 percent of their revenue from the state are no longer technically state funded and can pursue enterprise status. The status frees a college or university from a wide variety of state regulations regarding hiring, firing, tuition, and contracts. Most notable, it gets schools out from under the constraints of the Taxpayer's Bill of Rights, or TABOR, which limits tuition to a formula that ties any increase to inflation.
Because of CU's new status, the Colorado Commission on Higher Education approved a 6.1 percent tuition increase for the school on June 4. Because they still fall under the revenue restrictions of TABOR, all other Colorado public colleges and universities were approved for a 1.1 percent increase.
CU officials say resident undergraduate tuition at the school has been held artificially low under TABOR. Current estimates put CU's tuition at $1,828-a-year below comparable universities.
''We've had to deal with the double whammy of low state funding and an inability to raise tuition," said Jack Burns, vice president of academic affairs and research for the CU system (which includes all four campuses). ''Enterprise designation allows us to take a more entrepreneurial approach to generate the resources this university needs to function.
CU, which relies heavily on grants and other private revenue streams, gets only 8.5 percent of its revenue from the state.
All of Colorado's other universities and community colleges are expected to apply for enterprise designation next year when the voucher program drops their state-funding level below 10 percent.
Critics say the program is a way for government to shirk the responsibility of paying for higher education.
''The big loser from this legislation is the student, because it allows the state to abdicate its responsibility to pay for higher education," said state Senator Ron Tupa of Boulder, whose district includes CU-Boulder. ''Schools are going to have to raise tuition to make up for the loss in revenue, and students will be shouldering the brunt of it."
Joseph Neguse, a student body president at CU, agrees.
''There's supposed to be a pie of money awarded to the institution, but this program cuts it up and sends it elsewhere," he said.
Under a complicated formula, the Legislature appropriates a lump sum for higher education that is divided among the colleges. CU gets $3,296 per student, which must pay for undergraduate, graduate, and remedial courses not covered by tuition funding. At the $2,400-per-student rate, the university would be losing money. Also under the program, public universities could lose students and money to private schools. Private institutions participating in the program cannot be predominantly religious.
''This just opens the door," Tupa said. ''Now private schools can take away money from public schools that are really hurting. This [program] just spreads what little we have even thinner."
Lawmakers cut spending for colleges and universities by $85 million in 2003, or 12 percent. The cuts are expected to go even deeper next year.
In 2002, only 17 percent of low-income Colorado high school graduates went to college.
''Giving a high school student a voucher for $2,400 lets them know that they aren't alone in paying for higher education, that they have help," said Rick O'Donnell, executive director of the Colorado Commission on Higher Education. ''Where a low-income family may have thought college was out of reach in the past, now they'll know they have help."