May 062004
Authors: Chris Kampfe, Kyle Endres

Colorado is about to drastically overhaul its higher-education

system with a voucher system, but CSU students likely won’t notice

a difference – at least at first.

Aside from providing students more options for higher-education

funding, the new system could also act as a mechanism for

universities to raise in-state student tuition.

Despite praise from CSU President Larry Penley and legislators,

who have called the bill Colorado public higher education’s

salvation, several questions remain about the program:

* Why vouchers?

* Will the money be put directly in students’ pockets?

* Will universities receive less money?

* Will more students be encouraged to attend college?

* Is it unconstitutional to give state money to private


* Will community colleges become the schools of choice for

Colorado high school grads?

* The future?

Gov. Bill Owens is about to sign the College Opportunity Fund,

the first program of its kind in the United States.

The bill would initiate a stipend program, also known as

vouchers, for incoming college students. It would also grant

universities enterprise status if they meet certain criteria.

Enterprises function like private businesses instead of state

entities. Any institution operating with less than 10 percent of

its budget coming from the state is eligible for enterprise


With stipends, the state would give money to students for use at

a university of their choice, rather than giving money directly to

universities as a percentage of the state higher-education


Associated Students of CSU President-elect Katie Clausen said

she worries that students will misunderstand the stipend program to

mean that the voucher’s cost is deducted from their current

tuition, which is not true.

The voucher program also puts a 145-credit cap on receiving the

stipend for undergraduate students, which Clausen believes is

unfair to some students.

“Because there’s several students who are going to go over that

don’t deserve to be labeled as a career student,” she said.

The College Opportunity Fund is set at $2,400 per student for

use at public universities and $1,200 for use at private

institutions per year. This program would not take effect until

fall 2005 at the earliest.

Why vouchers?

The stipend program’s main benefit, some supporters say, is it

would give universities more flexibility in raising tuition.

It is this freedom that Jim Martin, a member of the University

of Colorado Board of Regents, is worried about.

“Where is the difference going to come from?” Martin said. “I

predict tuition and fees will raise $10,000 dollars in the next 10


Because universities would be independent enterprises, tuition

would no longer be considered state revenue. This past legislative

session, a 1.1 percent tuition increase was all that the Taxpayer’s

Bill of Rights would allow. (see graphic)

With a voucher program, the governor and state legislature would

still review tuition increases, as they currently do. Despite this,

however, the freedom from TABOR gives the universities more to

bargain with in the tuition-increase negotiations, said Gerard

Bomotti, vice president for Administrative Services.

“(Owens) and the legislature would still have to agree upon the

tuition level increases for all of public higher education whether

we were enterprises or not. But I guess what my point is, the

technical restriction of TABOR and the refund at least would allow

us to engage in the discussion of a higher level of tuition than we

were this year,” Bomotti said.

Sen. Peggy Reeves, D-Larimer County, said she voted against the

College Opportunity Fund partly because the bill does not bring any

new money into higher education. She also said the fact that Owens

and the legislature have authority over tuition increases does not

give higher education more freedom.

“I did not see that higher education institutions gain increased

flexibility as a result of this legislation,” Reeves said.

Less money?

Right now, CSU receives about $3,200 per resident student from

the state, which includes undergraduate, graduate and post-doctoral

students. The $2,400 stipend only includes undergraduate


The rest of the money would be made up through fee-for-service

contracts negotiated by the Colorado Commission on Higher


The contracts would be for non-undergraduate programs such as

CSU’s graduate school, its veterinary programs and Cooperative


“If there’s enrollment growth at a community college versus

enrollment growth at research universities, I think the economics

of it say it’s harder for the research university to support that

growth at a $2,400 a head basis,” Bomotti said.

These contracts should give universities roughly the same base

funding that they currently have, Bomotti said.

Money in students’ pockets?

The $2,400 or $1,200 voucher would not go directly to


The state, through the Colorado Student Loan Program, would

divide the money out to universities after students enroll.

“The money won’t physically go to you or your parents. You will,

by your enrollment, direct this new state administrative entity

(the CSLP) to where it would direct (the money),” Bomotti said.

Rick O’Donnell, executive director of the Colorado Commission on

Higher Education, said the bill gives students more control and

responsibility in how they pay for college.

“When a student enrolls every semester at a qualifying

university, and the university certifies that the student’s there

and enrolled, then the Colorado Student Loan Program will forward

the funding directly to the university,” O’Donnell said.

Will more students attend college?

Another benefit of vouchers is that it will increase access to

higher education for high school graduates, supporters say. Bomotti

said Penley shares this view.

“I believe he has a philosophical support for it that you know

if a student and a parent in the state wants to take this money and

go to a private school or whatever that that’s a good public

policy,” Bomotti said.

But Martin does not believe the bill will increase access to

universities for different types of students.

“Republicans have been set (on vouchers) since the ’80s as a

model for higher education,” Martin said. “All we’ll see is less

diversity, less moderate, middle-class students.”

Bomotti said it remains to be seen whether a stipend program

will affect university enrollments.

“Some supporters of vouchers believe that with the passage of

this bill, it will encourage more students to attend public higher

education,” Bomotti said. “That’s a possibility, I think

everybody’s kind of waiting to see if that will translate into


Giving money to private universities?

Much debate about the bill deals with the constitutionality of

allowing vouchers to be directed toward three private institutions:

the University of Denver, Colorado College and Regis


Directing this money toward private higher education may also

take money away from public universities.

O’Donnell said private schools do already receive some funding

through financial aid to low-income students. He said the $1,200

dollars is also only for low-income students, it just comes in the

form of a partial stipend.

“It does take a slight sliver of money away from the current

public institutions,” O’Donnell said. “The forecast is it’s just a

couple million dollars and the amount of money going to the public

institutions is hundreds and hundreds of millions of dollars.”

The bill’s opponents have argued that this is not the time to

take money from public universities.

“No. 1, they cut money to institutions and students. They

already have a pot (of money) that isn’t big enough and then cut

$1,200 (per student) from it,” Martin said. “Boulder lost at least

$1,300 per student with the passage of the bill.”

Sen. Reeves agreed with Martin’s perspective.

“As a matter of fact, by providing vouchers to three private

higher education institutions, the net result was less money for

public higher education,” she said.

Martin also argued that the cuts will be felt more as losses for

public institutions than as significant gains for private


“The joke is that $1,200 dollars at Colorado College is like

watering a football field with a garden hose,” Martin said. “(At

roughly) $800 a credit-hour, that won’t even get you three


More students at community colleges?

Some people have said a voucher program would drive more

students to attend community colleges.

Enterprise status would allow higher tuition increases,

especially at four-year colleges. The belief is that the tuition

increases would eventually price out middle-class students, making

community colleges the only affordable option.

“Ultimately, moderate, middle-class families will be priced out

of prestigious state institutions,” Martin said. “All they’ve done

is create a feeder to community colleges.”

O’Donnell sees it as a matter of the universities getting the

right amount of money for the number of students they attract.

“The university wouldn’t get that money if the student didn’t

enroll, didn’t show up, chooses not to come back for the next

semester,” he said, “and if a bunch of students choose to go to one

institution over another, then one institution may have a lot less

funding than they were expecting…”

O’Donnell said Gov. Owens will likely sign the bill in the next

couple weeks and Colorado universities will probably start using a

stipend program starting in the fall of 2005.

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