The New Badger Partnership is Not About Affordability

Tuesday, April 26, 2011
According to the Badger Advocates' new television ad promoting the New Badger Partnership, the number one reason this new policy is needed is "To keep tuition affordable and provide more financial aid."

This claim is echoed in speeches by Chancellor Martin and her Administration, and maintaining or enhancing affordability is a central goal for the NBP articulated by student advocates.

Can the NBP achieved its primary policy objective? Will it?

The strong likelihood is no. Here, again, is why.

(1) The value of financial aid depends on cost of attendance. The real cost of college attendance for students and families is the "net price" they pay -- that is, the cost of attendance minus financial aid. Since some students do not respond well to loans, many argue that net price is actually the difference between cost of attendance and grant aid.

(2) The New Badger Partnership makes statements about the need to "keep tuition affordable" but it says nothing about tying increases in financial aid to increases in tuition. This is one of the biggest myths going around right now-- please, look at the legislation-- there is not a word about increasing aid in proportion to tuition in there. In other words, the NBP says nothing about maintaining or reducing net price. While advocates for the NBP rightly note that some higher education analysts support a "high tuition high aid" model, they neglect the clear statements made by those analysts that in order to work -- e.g. in order to maintain or enhance affordability--increases in aid must always accompany increases in tuition. Furthermore, those same analysts insist that since states and institutions rarely behave in such a predictable, responsible manner, it's important that they be required to do so. Yet the NBP does not mandate this.

(3) The New Badger Partnership talks about keeping tuition affordable but says nothing about keeping room and board, or student fees affordable. The cost of attendance, and thus the net price, includes all of those things. And those non-tuition costs have been rising faster than tuition for a long time.

(4) Only if "net price" decreases substantially will affordability may be improved. I see nothing in the NBP that suggests that grant aid will grow much more rapidly than tuition or that such growth will always be sustained over time-- so I think the chances of a substantial decrease in "net price" and increase in affordability are slim to none.

(5) If "net price" does not change, affordability is at best maintained. That would be the true meaning of "hold harmless" (as in the Madison Initiative for Undergraduates). But again, I say "at best" maintained because it is also plausible that sticker price has an effect on student decision-making, apart from net price. In other words, some students and families may be "scared off" by the higher tuition, perhaps because they misunderstand discounting. In that case, affordability is eroded.

(6) Misunderstanding of discounting is widespread among all kinds of people, including those in the lower and middle-income brackets. It's a bigger problem among low-income people. Not a single "sticker shock" program has been proven effective-- including those at private institutions-- where research shows the percent of low-income students has not increased despite such campaigns.

Given these facts, why is the NBP being promoted as an effort to maintain or even enhance affordability? At best, this seems disingenuous. Instead, Advocates could talk about the other aims of the policy-- e.g. improving excellence and/or quality--and make the case that increases in those things offset sacrifices to affordability. But they are not making this case, and I suspect it's because they know the argument will not fly with much of their constituency. Instead they have adopted the rhetoric of affordability that appeals to liberals, and used it to paper over a campaign that is ultimately focused on the needs of the elite.

Finally, let's talk about the great fear: "the status quo."

It is true that UW-Madison has grown less affordable over time, that institutional need-based aid did not increase until Chancellor Martin's regime, and that we stand to get higher tuition even absent the NBP. All that is true, and affordability could erode as a result.


Instead of the NBP we could maintain or enhance affordability by doing the following:

(1) Require all undergraduates to complete a FAFSA before enrolling at UW–Madison, although an “opt out” option can be added for personal and philosophical reasons.

(2) Seek a change to the rules governing the use of tuition dollars. Right now we can't use them for financial aid-- instead of asking for the right to set tuition, why not instead ask for the right to use some of the dollars for aid? This is what we did with MIU-- and MIU is different from NBP in that it explicitly tied aid to tuition increases.

(3) Continue to fundraise for institutional need-based aid. The growth in fundraising for that cause under Chancellor Martin's regime came from new leadership at Foundation-- the NBP was not needed. Ask for more support in promoting that campaign.

(4) Gradually shift institutional merit-based aid to institutional need-based aid. Make it a priority-- take a stand.

(5) Lead hard conversations about cost-savings measures to reduce room and board and student fees, to reign in the cost of attendance.

(6) Collect the kind of data needed to measure the impact of institutional need-based aid (right now we do not do this, and we easily could). Document effects and use them for fundraising purposes.

(7) Experiment with a sticker shock campaign. Find a model that works for UW Madison and use it to gain the support for additional tuition increases.

(8) Rethink admissions criteria and their relationship to family income. Consider putting a "thumb on the scale" for family background in order to increase diversity at Madison.

Before you accuse me of putting forth good ideas too late in the game, know this: these are not new proposals. We have made them many times over many years. They have been ignored.

Whatever you think about it, the NBP is not about increasing affordability. It will not achieve that policy objective. Vote for it on other grounds if you must-- but do not do so thinking it will make UW Madison more affordable.