Revising How We Fund the Vital Community Colleges in Illinois
Community colleges serve and provide a range of educational opportunities to a diverse student body across the state of Illinois: university transfer credit for recent high school graduates; access to advanced agricultural innovations for small-acreage farmers; retraining programs for displaced workers, and English as a second language courses for the new immigrants. These multiple activities reflect a core value of the community college system: Regardless of background, age, or geographic location, an affordable opportunity to learn and grow is local. Through open-access pathways, community colleges in Illinois enroll 42% of the 974,000 postsecondary students with an average age of 27.
Maintaining quality and affordability is a key aspect of community colleges, as these institutions educate a disproportionate number of working adults and individuals from low-income families (Kahlenberg et al., 2018). Although attending a two-year institution remains an economically “affordable” decision for these students, recent trends suggest that student loan debt increases as education delivery costs outpace state funding support (Shaw et al., 2022). Research shows that from 2004 to 2023, there has been a 23% decline in state appropriations to Illinois community colleges, yet tuition and fees have increased by 65% over a similar period (Hu & Fernandez, 2024). The increasing financial burden on the individual and institution impacts a range of variables related to student success (Kahlenberg et al., 2018). For the individual, high costs impact credits taken per semester, balance in work-school-family responsibilities, and increased time-to-credential. For institutions, low resources affect the quality of instruction and student services – larger class sizes, fewer full-time faculty with industry expertise teaching, higher advisor-to-student ratios, and diluted delivery of social services crucial to providing holistic educational experiences.
A study supported by the nonprofit organization Partnership for College Completion (Hu & Fernandez, 2024) estimated that Illinois community colleges are underfunded by $637 million annually related to system formula calculations. The current funding model derives from the 1/3-1/3-1/3 funding principle, established during the creation of the community college system in the 1960s. This principle sought to balance state, local, and individual responsibilities for pursuing and accessing high-quality education by splitting costs equally across state appropriations, local tax revenue, and tuition paid by the individual (ICCB, 2024). Over the years, however, state appropriations have not kept pace in supporting their third of the formula. Additionally, local tax capacities vary widely by geographic region across the state – higher in more affluent communities and lower in under-resourced areas. The decline in state appropriations and variability in local tax revenue explains the inflation in tuition rates to support increasing costs of instruction related to high-demand fields (e.g., healthcare, manufacturing, cybersecurity), growing need for institutions to provide social services (e.g., food pantries, childcare for returning adult students, public transportation), and state-mandated programs that remain underfunded relative to costs (e.g., dual credit for high school students, non-credit workforce training). Suppose community colleges are indeed viewed as indispensable institutional anchors that stimulate local and state economic growth while ensuring that anyone, anytime, anywhere, can pursue both personal and financial growth through postsecondary education. In that case, a paradigm shift for funding is needed.
As a state, Illinois has an opportunity to serve as a national model for recalibrating funding models for more sustained support for community colleges. We could start by reevaluating the 1/3-1/3-1/3 funding model to determine its capacity for supporting institutional costs across operations, instruction, and student support. Considering the disparities in local taxing capacity and legislated tuition caps, the state may consider adding a baseline operational funding stream to ensure all colleges – particularly rural-serving and urban-serving – have a fair distribution of resources to address fixed costs related to everyday operations. Additionally, a three-year funding cycle for these grants would allow institutional leaders to maximize the efficiency and effectiveness of baseline funds through short--, mid-, and long-term planning around varied costs related to aging infrastructure and investment in emerging technologies for high-quality training. Delaney and Doyle (2011) suggest that, due to perceived access to alternative revenue streams when compared to other budget categories, higher education appropriations are susceptible to being a ‘balance wheel’ during the state budget cycles – adequately funded during strong economic times and disproportionately cut during lean periods. This perspective and actions uniquely impact community colleges as their alternative revenue streams are limited compared to their four-year counterparts.
A second consideration for shifting community college funding is the expanding enrollment in mandated programs such as dual credit for high school students and non-credit instruction for displaced working adults. While both deliverables are critical for supporting educational and workforce pathways, there is a debate on whether the current "special purpose" funding fully covers related costs for institutions. Community colleges with more stable revenue streams – like substantial local tax revenue - are better positioned to mitigate increasing costs. However, they may still feel the strains in resource allocation to other areas. For community colleges with less stable revenue streams, quality delivery of mandates may be compromised, leading to uneven program access across their district. For example, a study on dual credit in Idaho found that students in suburban school districts represent 25% of the public high school population; they accumulated 37% of dual credit awarded (Bransberger et al., 2021). In contrast, students from rural areas, 32% of the total high school population, earned 24% of the credits awarded, and 24% of students in urban locales earned 17% of the credits awarded. Similarly, isolating non-credit workforce development programs from baseline budget allocation processes impacts equitable delivery.
A third consideration is to facilitate a thorough exploration of alternative budget models that could complement funding processes, such as evidence-based funding and adequacy-based funding (Romano & Palmer, 2023). Acknowledging that no complex model can be flawlessly brilliant or entirely free of potential pitfalls, each supports a measure of recalibration. Evidence-based funding encourages accountability by aligning funding with improvement and success across targeted outcome measures. It also drives institutions to achieve funding benchmarks through data-driven decision-making. Colleges with fewer resources, however, may struggle to meet standards or improve performances, further extending cycles of underfunding and lower outcomes. Further, combined with annual budget cycles, evidence-based funding may prioritize short-term outcomes and easier-to-achieve outcomes to boost metrics, limiting long-term planning and further disadvantaging student populations most underserved. Equity-based funding models address limitations by providing targeted resources for colleges serving underrepresented or disadvantaged student populations. For example, community colleges with higher proportions of low-income, first-generation, or students of color receive unique funding to support wraparound services to complement academic experiences. Equity-based funding also holds promise in encouraging investment further to address systemic inequalities in student and academic services, driving continuous improvement for equity. The most significant limitation of the equity-based funding allocation process is challenges in defining equity across 45 community colleges and identifying achievable performance measures that appropriately address the complex intersectionality of demography and geography within our diverse state.
In conclusion, Illinois community colleges are vital educational and economic drivers that provide diverse opportunities for students of all ages and backgrounds. However, the increasing financial strain on institutions and students underscores the urgent need for a paradigm shift in funding. Revisiting the 1/3-1/3-1/3 model and introducing baseline operational funding could address resource disparities and improve institutional stability, particularly for rural and urban-serving colleges. Additionally, fully funding state-mandated programs and exploring alternative budget models, such as equity-based or evidence-based funding, could better align resources with student needs and institutional goals. By prioritizing sustainable and equitable funding solutions, Illinois has the opportunity to lead the nation in demonstrating how community colleges can continue to serve as indispensable anchors of opportunity, ensuring that anyone, anywhere, can access affordable, high-quality education and workforce training.
References
Bransberger, P., Taylor, J., Lane, P., & Falkenstern, C. (2021). Evaluation of Idaho's Dual Credit Funding through Advanced Opportunities. Western Interstate Commission for Higher Education.
Delaney, J. A., & Doyle, W. R. (2011). State spending on higher education: Testing the balance wheel over time. Journal of Education Finance, 343–368.
Hu, X., & Fernandez, F. (2024). (rep.). Advancing Adequacy-Based Funding for Community Colleges in Illinois. Chicago, Illinois: Partnership for College Completion: Advancing Equity in Higher Education.
Illinois Community College Board. (2024). (rep.). Illinois Community College Funding White Paper: Trends in Funding Principles, Mechanisms, and Measures.
Kahlenberg, R. D., Shireman, R., Quick, K., & Habash, T. (2018). Policy strategies for pursuing adequate funding of community colleges.
Romano, R. M., & Palmer, J. C. (2023). Funding adequacy and the community college. New Directions for Community Colleges, 2023(203), 165-172.
Shaw, K., Asher, L., & Murphy, S. (2022). Mapping community college finance systems to develop equitable and effective finance policy.