Gov. Josh Shapiro proposes sweeping reform of Pa. state-funded higher education

Gov. Josh Shapiro on Friday announced a blueprint to overhaul how Pennsylvania funds its colleges and universities to make attending a state-run or community college significantly more affordable.

Shapiro’s pitch for sweeping changes to the higher education system is expected to be a signature part of the budget proposal he delivers to the General Assembly next month. The initiative received support Friday from Democrats, Republicans, and higher-education officials — all of whom are stakeholders he’ll need to get his pitch across the finish line and fix the state’s struggling system.

Pennsylvania spends less on higher education than every other state except New Hampshire. The long-term erosion of state support in Pennsylvania has increased the financial burden on students and institutions, resulting in tuition hikes, cuts in services, and the need to take on more debt, the governor’s office said.

Shapiro’s announcement Friday did not include how much these changes could cost the state, and many details of how it would be implemented were not immediately available. Full details of the plan will be released as part of his full budget pitch on Feb. 6. And as Pennsylvania approaches a fiscal cliff next year — with spending expected to outpace revenue — any major funding increases could be a sticking point in budget negotiations between Republicans, who control the state Senate, and the Democratic governor and Democratic-controlled House.

Part one of Shapiro’s three-part plan called for a cap of $1,000 per semester on tuition and fees at state-owned universities and community colleges for median-income Pennsylvanians making $70,000 or less. It would also increase Pennsylvania Higher Education Assistance Agency grants by $1,000 for all students attending state-related universities and independent colleges. PHEAA administers financial aid, and disbursed more than 103,000 grants to Pennsylvania college students in the 2021-22 academic year, according to the agency’s data.

For the fifth consecutive time, a tuition freeze was approved last year for in-state students at state-owned universities, keeping the tab at $7,716. But the annual cost for Pennsylvania residents, including room and board, exceeds $22,000.

The plan also called for the unification of the 10 Pennsylvania State System of Higher Education (PASSHE) universities and the 15 publicly run community colleges under a new governance system, which Shapiro argues would improve coordination between schools and improve affordability.

“The governor’s proposal is a real opportunity to build upon the strengths of PASSHE universities and the community colleges,” said PASSHE Chancellor Dan Greenstein in a statement. “Together, we can create a new, larger system with better collaboration that gives students more pathways to a degree or credential, rapidly adjusts to the changing knowledge and skills employers want, and provides the lowest-cost option for students throughout their lifetime.”

Over the last decade, enrollment has declined 30% across the PASSHE universities and 37% for the publicly run community colleges, the governor’s office said.

Some higher education officials previously blamed part of PASSHE’s slowing enrollment on Penn State’s opening of more branch campuses around the state, leading to overcrowding of higher education in the state and making schools compete for students. But even Penn State is cutting back on its branch campuses, which are slated to lose $54 million this year, Spotlight PA reported.

Shapiro also proposed creating a performance-based funding formula that rewards public and state-related colleges and universities for achieving outcomes that benefit Pennsylvania. As part of this, Shapiro would end the two-thirds vote requirement from both chambers to fund Pennsylvania’s four state-related schools — Temple and Lincoln Universities, Penn State, and the University of Pittsburgh — which have been tied up in political fights that delayed approval of their funding over the last few years.

The funding formula under Shapiro’s new proposal would weigh factors such as increasing enrollment, the number of first-generation college students who receive credentials, and the graduation rate.

Shapiro argued that his new higher-education funding formula would create incentives for institutions to recruit and support students to complete degrees and earn credentials in fields facing workforce shortages, such as nursing and teaching, and growing sectors, such as biotechnology and advanced manufacturing.

Lincoln University President Brenda Allen, who leads one of the state’s two historically Black universities, said Shapiro’s blueprint for higher education “would support us in our work by delivering additional funding to support our historic mission, while also giving state-related universities like Lincoln stability and a chance to plan for the future needs of our students.”

In his budget address next month, Shapiro will propose funding increases for state-owned universities, community colleges, and their students, the governor’s office said. This year, the state spent $585 million on its PASSHE schools, $262 million on its community colleges, and sent another $604 million to the four state-related schools.

The blueprint is based on the work of a group of higher-education leaders from across Pennsylvania appointed by Shapiro to develop a series of recommendations, the governor’s office said.

“Every Pennsylvanian deserves the freedom to chart their own course and the opportunity to succeed,” Shapiro said in a statement. “For some, that means going right into the workforce — but for those who want to go to college or get a credential, we need to rethink our system of higher education.”

“That’s exactly what my plan will deliver, and we’ll build a higher-education system that opens up doors of opportunity, prepares our workforce, and serves as the linchpin to Pennsylvania’s economic success,” Shapiro added.

Several Republicans said they wanted to see more details of Shapiro’s plan for fixing the state’s higher education system, but praised the governor’s early ideas.

Jason Gottesman, a spokesperson for House Republicans, said the caucus was “glad to see the Shapiro administration join with House Republicans in prioritizing students and families while balancing the financial needs of the Commonwealth.”

“I appreciate the perspective put forth by Gov. Shapiro within his proposal and believe his plan is well intended,” said Senate Majority Leader Joe Pittman (R., Indiana). “The types of changes being proposed are no small undertaking and notably absent from the announcement is the amount of funding required to effectuate the plan.”

“Two key considerations with any substantive changes must be the additional costs to taxpayers, as well as the impact on local communities where our state’s higher education institutions are located,” Pittman added.