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Colleges see 'hostility' in Cuomo plan threatening grants

First came the governor's proposal for free tuition at the state's public colleges.

Then Gov. Andrew M. Cuomo said he intended to cut state grants at private colleges that he felt raised tuition too much.

And now his comments as he crisscrosses the state promoting his ideas about higher education have stung private college presidents.

"One of the things I don't understand in the whole set of proposals is what seems to be an increasing hostility towards the independent schools. It's mystifying," said John J. Hurley, president of Canisius College in Buffalo.

New York State's private colleges and universities are warning about the dire economic consequences for them and the communities where they are located if Cuomo's free tuition and other proposals for higher education become reality.

[PolitiFact: Is Cuomo correct that New York gives more aid to private college students than any other state?]

Private college and university leaders were among the earliest detractors of Cuomo's surprise free tuition idea when the governor announced it in January.

Cuomo's budget, released a few weeks later, heightened their concern. The governor proposed cutting off millions of dollars in state aid to private schools that he believes charge too much.

If adopted, the governor's proposals would siphon students from small private colleges and universities into the State University of New York system and starve independent schools of the money they need to survive, according to several presidents.

"What's distressing about this is the underlying suggestion that somehow the colleges are setting out to gouge students, and that's simply not true," said Gary A. Olson, president of Daemen College in Amherst. "I can't imagine the governor instituting a similar kind of threat to any other business in the state."


Seeking accountability

Cuomo's budget proposal aims to "make colleges accountable for exorbitant tuition rates" by offering the Tuition Assistance Program, or TAP, only to colleges that maintain increases in tuition below $500 or the annual increase in the Higher Education Price Index, whichever is greater.

Private colleges that don't abide by the tuition limits would lose access to hundreds of millions in financial aid dollars.

The governor also proposes cutting off unrestricted financial support, or Bundy Aid, to colleges that exceed the tuition increase threshold.

Olson and other private college presidents say the governor's plans would ruin a higher education delivery system in New York that has worked well for decades.

Cuomo pushes free tuition to drive new economy, but legislator pushes back

Cuomo has said he wants to limit student debt, while raising college graduation rates and growing the number of New York State residents who earn degrees. In January, he proposed a new Excelsior Scholarship that would allow students from families making up to $125,000 to receive free tuition at New York public colleges and universities. Cuomo promoted the free tuition plan in a recent visit to SUNY Buffalo State. He acknowledged objections that his plan did not apply to more than 100 private colleges and universities throughout the state, and then seemed to double down on why he proposed it that way.


Canisius College (2016-17 tuition): $33,948

Daemen College (2016-17): $26,400

Niagara University (2016-17): $29,500

St. Bonaventure University (2017-18): $32,336)

Note: Scholarships and financial aid lower the cost of attending college for most students. The average net tuition at private colleges in New York is about $12,700.


"Some people will say, well, you're not subsidizing private schools. You're right. We're not subsidizing private schools," Cuomo said. "By the way, we don't subsidize private high schools. We have public high schools. If you want to go to a private high school, you go to a private high school."

"We happen to subsidize colleges probably more than any other state, except maybe one," Cuomo said. "But an average tuition now at a private school is $34,000. Average tuition at a SUNY school is about $6,400. We cannot subsidize a $34,000 education. And to the extent this is going to make it more competitive and the private colleges bring their costs down, I say that's better for everyone."


'Devastating' impact

Cuomo received cheers for his remarks from a crowd of Buffalo State students, many of whom would stand to benefit from his free tuition plan.

But private college presidents, who already were bristling over the budget proposals and free tuition plan, say the governor left out some key facts.

"In the last 10 years, when TAP has flat-lined, the independent schools have actually tripled financial aid to students,"said Hurley, the Canisius president.

Tying state aid to a tuition-increase threshold amounted to price fixing at a time when most private colleges and universities in New York are bending over backward to make college affordable, Hurley said.

If adopted, the governor's plans "will be devastating" both to private colleges and universities and to the communities they serve, he said.

Some college presidents said they were puzzled by the governor's proposals because Cuomo has championed economic development in upstate New York, and private colleges and universities are a crucial element of the economies of so many upstate communities.

Olson called Cuomo's comments about state subsidies "a specious argument."

No one's asking the governor to subsidize private colleges, Olson said.

"The point is to give the support to the student," he said. "The state has an obligation to the students and families. All we're asking for in the private sector is an even playing field."

"One of the things I don't understand in the whole set of proposals is what seems to be an increasing hostility towards the independent schools. It's mystifying," said John J. Hurley, president of Canisius College in Buffalo.


Few pay full tuition

Getting more students to graduate on time and with less debt are worthy goals, but the governor's approach fails to account for complexities inherent in calculating college costs, said several presidents.

Using tuition sticker prices is misleading, because very few students actually pay those prices.

Although the average private school tuition in New York is around $34,000, the average net price is $12,700, according to the Commission on Independent Colleges and Universities. And that is much closer to what SUNY campuses charge,.

"Every school discounts," said Kenneth Macur, president of Medaille College. "To use the sticker price as a number to figure out how our private colleges manage tuition is sort of an irrelevant number."

A 2015 Buffalo News analysis of federal education data also found that while local private residential colleges had raised tuition and room-and-board rates by an average of 15 percent, their collective average net prices over a five-year period had climbed just 2.5 percent.

"The market is speaking loud and clear to us," Hurley said.

[Related: Grants, financial aid soften college sticker shock]

But the TAP is important for the students and driving down the sticker price.

In 2015-16, TAP paid out $210 million on behalf of income-eligible students who attended private colleges and universities in New York. Many of those schools have raised tuition above the thresholds included in Cuomo's proposal.

Medaille had 922 students who received $2.5 million in TAP awards to help pay their tuition bills. The college's current sticker price is $27,276, up about 20 percent, from 2011-12. But its average net price has actually gone down, by an average of $300 per year, because of the growing amount of financial aid its students received.

"We would be at risk of losing state funding, even though we're doing better than what the governor wants," Macur said.

Canisius will spend roughly $50 million in institutional funds – almost all of it from tuition dollars – this year on financial aid. Private colleges could end up in a catch-22, losing students if they can't offer TAP or enough institutional aid.

"It's hard for us to replace that TAP piece with institutional aid, because we just don't have it," said Hurley.


Comparing track records

Most private colleges across the state rely heavily on tuition revenue to stay in business. Tuition and fees account for more than 80 percent of the core operating budgets of Canisius, Daemen and Medaille. At Niagara University, it's about three quarters.

The Rev. James Maher, Niagara president, said Cuomo's proposals would hamstring private colleges and universities and ultimately could end up stifling economic development, especially in Western New York, where higher education is a key economic driver.

"What unfortunately it does is it limits flexibility for us to provide support and services to students and for people who work at the university," said Maher.

At nearly $1 billion, TAP is one of the most generous state financial aid programs in the country. The Cuomo administration estimates that offering free tuition at public colleges and universities would cost the state an additional $163 million, by paying the difference in SUNY, CUNY or community college tuition that's not covered by TAP and the federal Pell grant program.

[Related: Free SUNY college tuition? That raises lots of questions]

Private colleges argue that the governor would accomplish his goals of less student debt and more graduates simply by raising the maximum TAP grant from the current $5,165 to $6,500 and by adjusting the income scale to allow for more awards. The cost to educate a student is roughly the same at public and private colleges in New York, said Mary Beth Labate, president of CICU.

"What differs is who's paying for the cost of that education," she said.

Labate also said the private sector has a better track record of getting students to complete their degrees within four years – one of the governor's focuses.

It makes little sense for the state to give students incentives to attend only SUNY and CUNY schools, when those institutions on average don't do as well as privates in getting students to complete, Macur said.

"We're in a competitive market, and we don't have the privilege of charging anything we want if we don't have something to back it up," Macur said. "The tuition we charge comes with value."


Student choice

Petrina Sciandra likes the idea of free tuition. But she said it would be a shame if it came at the expense of a private institution like Medaille, where she studies business administration.

Sciandra enrolled at the small Buffalo campus after graduating in 2013 from Williamsville North High School. A year later, she transferred to the University at Buffalo to get the experience of being at a major public university. But Sciandra learned quickly that UB wasn't the right fit for her. She struggled in the large lecture classes of 400 students, and had trouble connecting with professors for help. Her grades plummeted.

"I just couldn't focus," she said. "It just wasn't for me."

Sciandra transferred back Medaille after a semester at UB. She found success again in the classroom, and credited small class sizes and a close relationship with many of her professors.

"It's great for students that can't learn in a bigger setting," said Sciandra, who's on track to graduate in May. "This is very important for some students."

Sciandra said it was only fair for students to have the option of using financial aid from the state at either a public or a private college. Otherwise, she added, "these private colleges are going to go out of business."

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