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South Dakota Higher Education Suffers Decade of Budget Neglect

South Dakota likes to brag to entrepreneurs about its low costs and low taxes. But that bargain apparently dos not extend to young people seeking higher education to build their own business dreams.

Bob Mercer casts a harsh light on the cost of higher education in South Dakota, finding that undergrads in South Dakota face the third-highest costs in an eight-state region. The most damning passage lays blame at the state government's feet:

In 2002, state general fund support from the Legislature provided 57 percent of the educational and general funds for the university system, while students paid the other 43 percent. By 2012 that ratio had flipped, with the Legislature giving only 38 percent and students paying 62 percent [Bob Mercer, "SD Students Pay High Price for College, Technical Classes," Rapid City Journal, 2013.12.20].

Nationally, the percent of higher education paid by tuition has risen from 30.2% in 2002 to 47.0% in 2012. South Dakota's reduction in per-student higher ed spending of 19.2% since 2007 is actually less than the national recession-era average of 23.1%. So the Rounds-Daugaard legacy of shifting higher education costs to students and families is not unique to South Dakota. But the burden our governors and legislators have placed on students seeking higher education is the seventh highest in the nation and the highest in our region.

Governor Daugaard is on the right track to propose a tuition freeze and boost general fund appropriations to our universities. But we need to do more to reverse a decade of neglect. As we scrutinize the state's proper role in economic development, perhaps it is time to pull back on our handouts to big businesses and return to our support for the aspiring people who will build the next big businesses in South Dakota.


  1. John Tsitrian 2013.12.21

    As alums of the UC system (LA for me, Berkeley for Emily) my daughter and I keep loose tabs on finances there and have found a similar shift away from state support, with Cal, per its chancellor when I met him a couple of years ago, getting only 18% of its funding from the State of California. What the UCs are finding, though, are ways go goosing up revenues from outside sources, including alums, grants, cash on the barrelhead from foreign students, and other methods. UCLA is even considering spinning off its Anderson School of Management and letting it turn into a private entity with use of campus facilities, much like Rand Corp. of Santa Monica has done for decades. (Disclaimer: SD Regent Kathryn Johnson is my sister-in-law) I think a similar entrepeneurial direction might be the way to go for SD's university system. I like that Brookings will have a big football facility to stir up alumni interest--like it or not, that's where some of the serious money is. I think a task force could be created by the Regents, who can use other public university systems as models for bringing money into their institutions.

  2. Mike Verchio 2013.12.21

    Look at all the monuments , I'm sorry , new facilities built and commitments to sports - no wonder the rates skyrocketed .

  3. interested party 2013.12.21

    66 county seats, why?

  4. caheidelberger Post author | 2013.12.21

    But Rep. Verchio, how much of those sports shrines is built with alumni donor dollars, and how much actually drives increased student costs? I'm no fan of big sports, but are they driving up the costs on which Mercer reports?

  5. Donald Pay 2013.12.21

    It's not just that this is a shift from state funds to student tuition. Neither students nor their families, certainly not middle class families, can pay much of the tuition increase out-of-pocket. As a result, there has been a huge increase in student debt with loans taken out in the partially privatized student loan market. This market has been highly adverse to students. Really, the banks are screwing our young'uns up every possible orifice, because they lobbied it that way. Meanwhile South Dakota and, really, most every other state, let's the banks get by with a teeny weeny tax while they impoverish the next generation. They're screwing everybody.

    Think of what that does. Even if the next generation was graduating into a go-go job market, they would still be starting life out with far larger obligations than any other generation. That neat car or condo or starter house is likely 5-10 years further down the road than it would have been. That means there is less juice in the economy, and we all suffer. All the juice is siphoned off to the banksters, and they pay themselves big bonuses and ship that money overseas.

    Want to change that? You gotta get off the idiocy of "no new taxes." You gotta start taxing where the money is. Anyone taking a no new taxes pledge is just going to ship the money to the banks and from there to China.

  6. grudznick 2013.12.21

    There should be 3 colleges and 30 county seats. I am with Mr. Kurtz on this.

  7. rollin potter 2013.12.21

    MR.TSITRIAN, You must remember this is south dakota not new york!!!!!!!! Even if south dakota went to the eastern sea board to get MR.warner and all his east coast ideas about how we should run our schools in south dakota we are still middle to low income people in south dakota!!! only mr.warner and a few others are in the $180,000 [plus category arond here!! Check the difference in salaries between south dakota and new york for the laboring class of people!!
    Can any one tell me what part of a student's tuition fees go to athletics? Whether they attend any athletic games or not?
    The hi rollers will have enclosed seating at the football games while hillbillies will have to sit out in snow and and rain if they should scrape up enough to attend a game!!!

  8. Jaka 2013.12.22

    Face it--SoDak political powers all took of the 'no new taxes' pledge koolaid years ago ("we'll just call 'em fees). Anyone else recall the thunderous speeches of "Don't tax the rich 'cuz they create the jobs" of years past?? With all these tax breaks they've had our economy should be better than China's!

  9. Wayne B. 2013.12.23

    With the debt load our current students are taking on, it's no wonder they're all leaving for better paying states.

    The challenge is there's still no mechanism to control costs at our universities. There's no way costs should be increasing 7-9% with rock bottom inflation.

    We really ought not levy high interest rates on student loans because they are essentially secured - they're almost impossible to discharge in bankruptcy court. The interest rate ought to be the same as what a bank's savings account returns.

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