Impacts of Budget Impasse on Illinois Public Education

• Ongoing Budget Crisis: Illinois public colleges have been functioning for over nine months without state funding due to a budget impasse initiated in early 2015 by Governor Bruce Rauner.

  • Consequences: Several colleges issued layoff notices, received credit downgrades, and even canceled spring breaks to manage finances.

• Financial Aid Freeze: State funding for the Monetary Award Program (MAP) is currently frozen, affecting approximately 150,000 low-income students who rely on grants of nearly $5,000 per year.

  • Institutional Responses: Colleges have resorted to finding alternative funding to maintain MAP grants, but as the impasse continues, the ability to do so diminishes.

Historical Context and Trends in Funding

• Historical Funding Cuts: The budget issues are not new; they are part of a trend that has shifted funding away from direct support for higher education towards pension obligations, leading to diminished operating support for institutions.

  • Funding Shift Example: In 2008, higher education funding distribution was 88% operational support vs. 12% pensions. By 2015, it had changed to 60% operational support vs. 39% pensions. The reduction amounts to a loss of $450 million annually for colleges.

• Tuition Increases: The reduced funding led to significant tuition hikes, averaging a 56% increase over the past decade, resulting in Illinois having the fourth-highest public tuition rates in the U.S.

• Impact on MAP Grants: The purchasing power of MAP grants has eroded as tuition has steadily increased without corresponding adjustments in grant amounts.

  • Statistical Decline: In 2002, MAP grants covered most tuition costs for eligible students. Currently, they only cover one-third, leaving half without sufficient aid.

Broader Implications of Budget Cuts

• National Trend: Illinois' situation exemplifies a nationwide trend of declining state support for higher education, correlating with rising tuition and increased student loan debt, particularly affecting low-income students and students of color.

  • Comparative Case of Louisiana: Louisiana has experienced the most severe cuts, resulting in increased public tuition and diminished college attendance rates, particularly among minority students.

• Educational Outcomes: The financial instability has led to increased dropout rates, and average debt for graduates has doubled from $15,000 in 2004 to $29,000 in 2014. The racial graduation gap has also widened,

  • Statistics: By 2012, graduation rates showed a gap of 30 percentage points between white students and black students.

Future Considerations

• Need for Legislative Action: Immediate action is necessary to restore funding and pass a budget to address the severe impacts on college affordability and accessibility.

  • Long-Term Solutions: Even if MAP and other funding were reinstated, it would take much more than that to restore previous affordability levels or provide adequate financial support to all needy students.

• Federal Involvement: The necessity for federal intervention is underscored, as states often lack accountability in maintaining adequate educational funding. Without such oversight, states may continue to undermine higher education systems, limiting opportunities for students.