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Study: College stipends a failure

The state’s five-year-old system of stipends for residents who attend state colleges has met only one of its original goals, according to a study by the Western Interstate Commission for Higher Education.

The study was released Tuesday to the Colorado Commission on Higher Education, which had the study done under terms of the law that created the stipend system, formally known as the College Opportunity Fund.

“In two of its three objectives it failed,” David Longanecker, president of WICHE.

Or, in the words of the report: “The evidence suggests that COF has not succeeded in reaching these aims, other than providing for higher education to be exempted from TABOR’s revenue and spending limitations.”

The program, implemented for the 2005-06 academic year, had three goals, according to the report:

  • Exemption of colleges and universities from the Taxpayer’s Bill of Rights
  • Making colleges more entrepreneurial
  • Improving college access for disadvantaged groups, particularly for low-income and minority students and for men

“What was achieved was an exemption from TABOR,” Longanecker said, but the program didn’t make colleges more entrepreneurial nor did it improve college access.

Brian Prescott, WICHE director of policy and research, presented statistics that show postsecondary enrollment by Colorado students actually has declined since the stipends were instituted, that almost all of the decline has come at community colleges and that declines have been steepest among disadvantaged students.

Why did the stipend system fail to meet its goals? Longanecker offered these reasons:

  • The program didn’t provide adequate incentives for colleges because enrollment growth wasn’t funded.
  • Fee for service payments, designed to “pay” colleges for their particular programs, weren’t well defined and didn’t have specified outcomes.
  • The legislative budgeting practice of shifting funds between stipends and fees for service meant neither program had any chance of influencing institutional behavior.
  • The system of performance contracts for individual institutions has no meaningful rewards or penalties.

What should be done?

Longanecker said maintaining the current system “is a fine idea if you are comfortable with what you have today.”

Returning to the old system of direct legislative appropriation also would merely maintain the status quo in higher education, he said, and it would create TABOR problems.

The report suggests increasing the amount of the stipends and financial aid, eliminating the requirement that individual students sign up for the stipend, eliminating the ceiling of 145 credit hours and better marketing of the stipend’s availability.

The study also recommends the fee for service system should have specific outcomes (like certain graduation rates for disadvantaged groups), and that the fee and stipend revenue streams should be kept separate.

College performance contracts should contain specific outcomes, the report suggested.

Disclosure: The study was funded by the Donnell-Kay Foundation, which also is a sponsor of Education News Colorado.