Varsity vouchers: Colorado has come up with a novel way to fund higher education. Send the money with the students.

• Author: Russo, Alexander

Pinched between budget cuts, mandatory increases in K-12 spending and constitutional limits on raising revenue, the Colorado legislature has passed what may be one of the most unique--and controversial--higher education funding plans in the nation: "vouchers" for college undergraduates at both public and private state institutions.

Under the provisions of Senate Bill 189, universities will no longer be state funded. Instead, $2,400 vouchers will be available each year to every state resident with a high school diploma or a GED for up to four years of education. Low-income students who want to attend one of three private institutions will be eligible for half that much.

The voucher replaces state funding to higher education. It takes nothing off the cost of tuition, but merely distributes the money to the student rather than the institution. Students will still have to pay the full cost of tuition, which may increase because the voucher doesn't equal the state appropriation. With universities having the same expenses, more revenue is going to have to be generated from other sources.

FIRST IN THE NATION

If, as expected, the Colorado bill is signed into law, the state will become the first in the nation to fund undergraduate education primarily through individual students. At the same time colleges and universities are freed from the state's constitutional limits on tuition increases.

According to proponents like Senator Norma Anderson, the new law has two major benefits: "It will create better access for low-income and minority students. And it removes the higher education system from the [state constitutional] limitations that we have, giving them the flexibility to run like a business." Schools can pursue enterprise status--allowing them more freedom in hiring, firing, increasing tuition and more.

Others such as Senator Ron Tupa raise questions about the law's constitutionality, its overall effect on state support for higher education and the burden it places on students. He calls the law "a very big gamble." And says it could end up "mortally wounding higher education."

In either case, the Colorado plan is the only one of its kind. "It's innovative and unique," says Donald Heller of the Center for the Study of Higher Education at Penn State. "It's taking the idea of a higher education voucher farther than anyone else has."

Traditionally, states support colleges and universities through direct appropriations, in addition to providing...