White Paper on Higher Education
This is the first report in PAR’s four-part white paper series to inform the issue debates of the 2003 gubernatorial and legislative campaigns. The white papers will address the topics of higher education, state finance, K-12 education, and governmental ethics/constitutional revisions
Executive Summary Higher education has the potential to become a more substantial driver of Louisiana’s economic development. First, however, bold political moves and tough policy choices must be made to break Louisianas legacy of unorthodox funding and enrollment structure. Compared to other southern states, Louisiana enrolls far more of its students in costlier four-year universities than in community and technical colleges. Louisiana has about 76% of its enrollments in four-year institutions compared to the southern average of about 56%. The result: greater cost, nearly the lowest college graduation rates in the South, a poor match with job opportunities and business needs, and a larger-than-necessary higher education funding deficit. Shifting enrollments from four-year institutions to community and technical colleges would lower the cost of fully funding higher education in the state, allowing for increases in the per-student funding levels at each institution. The shift can be accomplished by enforcing tougher admission standards at the states universities. This would help ensure student and institutional success by enrolling students in institutions that better match their academic preparedness. The resulting expansion of the community and technical college system would better prepare students to transfer to four-year programs or enter the job market. An expanded community and technical college system would also build the states capacity to develop a modern workforce capable of meeting the demands of an increasingly global marketplace. On average, Louisiana institutions receive only 72% of their formula funding targets; however, that funding is distributed inequitably ranging from as low as 59% to as high as 104%. Additionally, those funding targets are based on a formula that fails to account for much of the variation in instructional costs at different academic levels and in different subjects. Refining the funding formula would generate more accurate funding targets for use in estimating the states higher education funding gap. Achieving full funding for all institutions based on a refined funding formula would eliminate the funding inequities currently built into the states funding process. State tuition policy limits the ability of system boards to raise tuition in the absence of adequate state funding. Similarly, the authority of the Board of Regents is limited to the extent that few reforms survive the process of seeking consensus among each of the system boards. A nationally competitive research university has been a critical element of economic development success stories in other states. Nationally competitive research universities attract hundreds of millions in federal research grants; create high wage jobs through technology transfer that strengthens industry clusters; keep and attract the best high school graduates; provide research facilities attractive to sophisticated growth companies; and improve the image of their home states. Louisianas flagship university, Louisiana State University (LSU), is not a national leader and trails well behind the leading institutions in the South by most quality measures. Quality is strongly linked with funding, and LSU is only appropriated around 65% of its current funding target, which itself is set far below what would be necessary to propel the University to a nationally competitive level. Gradual funding increases and a commitment to quality could raise the University to a level of regional prominence within five to seven years and national competitiveness in 15 years. With optimum restructuring of enrollments, redesign of governance responsibilities and moderate increases in state funding phased in over 10 years, Louisiana could maximize the potential of higher education to promote the states economic development. The recommendations in this report are designed to more efficiently target Louisianas higher education spending, achieve full funding for each institution (based on refined funding targets and enrollment levels, as well as new state funding), and upgrade LSU to the level of a nationally competitive flagship university.
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