Colorado Now Sends Aid to Colleges Via Vouchers

Published July 1, 2004

Starting in the fall of 2005, state subsidies for Colorado’s public colleges and universities–totaling almost $600 million a year–will be distributed directly to students in the form of vouchers worth up to $2,400 a year.

Previously, the funds were distributed as block grants to the state’s higher education institutions, which then used the money to subsidize tuition. Colorado is the first state in the nation to allocate its college funding via the decisions of individual students.

Rep. Keith King (R-Colorado Springs), who sponsored the final bill, hopes changing the fund distribution to vouchers will encourage more low-income students to go to college. The $2,400 voucher would cover the full tuition cost at most community colleges, but students would need to come up with additional funds to pay the full tuition at four-year colleges.

Colorado lawmakers approved the higher education voucher plan at the end of April, after two years of discussions on the issue, and Governor Bill Owens (R) signed the bill into law on May 10.

“Under the old system, many Coloradans–particularly our minority and low-income residents–were unaware that the state stood ready and willing to help with their tuition,” explained Owens. “The new system enables parents, teachers, and others to show students the money: to tell them that there are funds earmarked just for them, waiting to be put toward a college education.”

Under a voucher system, the colleges must recruit students to get the state funds, which makes them more attuned to their customers. At the same time, students become more discriminating consumers of higher education when they have to decide where to spend their voucher, added the governor.

“If the state is going to invest in human capital, a sound investment by any measure, it should do so directly, by placing money straight into the hands of the beneficiaries,” said Owens.

The vouchers are available to all Colorado college students who are eligible for in-state tuition. A $2,400 voucher would go to eligible students attending a state institution and a $1,200 voucher would go to eligible low-income students enrolled at three private institutions: the University of Denver, Colorado College, and Regis University, which is a Catholic school. Vouchers may be applied to a maximum of 140 academic credits.

Other states are discussing higher education vouchers, too. In January, Utah State Rep. Ron Bigelow (R-Salt Lake City) began to investigate how college-level vouchers might be used in the Beehive State. In Washington state, Governor Gary Locke (D) and Sen. Don Carlson (R-Vancouver) were receptive to a recommendation from the Washington Competitiveness Council in January for the state to provide vouchers for students to make better use of private college capacity.

George A. Clowes is managing editor of School Reform News. His email address is [email protected].