It is well known that Maine lags behind the rest of the country in terms of economic prosperity.

In 2000, Maine ranked 36th among the 50 states in per capita income; 14 percent below the national average, and 29 percent below the New England average.

Although many factors are behind Maine’s relative economic performance, one factor stands out: Maine lags behind the rest of the country in higher education attainment. In fact, Maine’s relative standing in per capita income mirrors almost exactly its relative standing in attainment of bachelor’s degrees. In 1998-2000, the proportion of Maine’s working-age population with at least a bachelor’s degree was 18 percent below the national average, and 29 percent below the New England average, placing Maine 40th among the 50 states in attainment of bachelor’s degrees. And while this single explanation oversimplifies a complex and multifaceted issue, there is little doubt that the relative lack of higher education attainment in Maine is a substantial factor in holding back the state’s prosperity growth.

Why is higher education attainment so low in Maine? There is a popular notion that Maine’s attainment of higher education is relatively low because of a lack of aspirations. That is, higher education is not valued as highly here as elsewhere in the country. However, this notion is dispelled by the fact that the proportion of young Maine high school graduates continuing on to college is only slightly below the national average. The major factor explaining the low attainment of higher education in Maine is that college attendance within the state is lower than the college attendance of young Mainers overall. This is because the state is a net exporter of college students. Indeed, Maine ranks 47th out of the 50 states in net migration of college students.

Why are so many students leaving Maine to pursue college? The problem is a lack of state financial support for higher education, which translates into higher tuition and fees at Maine’s public colleges and universities. From 1996-1999, Maine ranked 40th in per capita public spending on higher education, almost 8 percent below the national average. Similarly, Maine ranked 42nd in percentage of public spending devoted to higher education, more than 14 percent below the national average.

Given these relative disparities, it should surprise no one that from 1994- 2000, average in-state tuition and fees per full-time undergraduate student in Maine were 50 percent higher than the national average, and 10.5 percent higher than the New England average. Indeed, average in-state tuition and fees per full-time undergraduate student in Maine were the fourth highest in the country. As a proportion of average income, Maine’s in-state college students pay 72 percent more than in-state college students in the country as a whole, and 30 percent more than in-state college students in New England.

Moreover, these figures do not tell the whole story. From 1994-2000, even though average tuition and fees in Maine’s public four-year programs was the 14th highest in the nation (23.3 percent higher than the U.S. average), it was 13.5 percent lower than the New England average. But, in terms of average tuition and fees in public two-year programs, Maine had the fourth highest cost among the states, 97.1 percent higher than the U.S. average and 18.4 percent above the New England average. Not surprisingly, given its high relative cost, Maine has the ninth lowest proportion of students in higher education enrolled in two-year programs.

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The correlation between Maine’s low public support for higher education and Maine’s low enrollment in higher education is undeniable. The state’s relatively high tuition and fees probably has two effects: first, it most likely suppresses enrollment in the state’s public two-year programs; second, it most likely makes out-of-state four-year programs and private universities relatively more attractive to our best and brightest young students. Because these students are mobile in their higher education decisions, they are responsive to tuition differentials across states.

Still, many students and their families are willing to pay high tuition if the quality is high enough. Expensive Ivy League schools have no shortage of applicants. As with anything we buy, what really matters is the relative cost along with the relative quality. Hence, another possible explanation for the low enrollment in higher education in Maine is the quality of our institutions. Here, however, recent public opinion surveys have found that Maine citizens and business managers are not displeased with the quality of education in the state. Perhaps, when quality and cost are considered together, we would find that the quality of Maine’s institutions of higher education is not high enough relative to out-of-state alternatives to warrant the tuition differential.

The upshot of all of this is that many of Maine’s young with high aspirations are driven out of the state by our lack of commitment to providing them with the skills needed to compete in a modern world. Our current economic situation in Maine is largely the result of the choices we have made. In particular, we have chosen a relatively low amount of investment in higher education, and as a result we are poor relative to the rest of the country and, especially, relative to the rest of New England. The truly troubling part of this conclusion is that, at present, there is little sign that this trend will change without significant intervention.

Philip Trostel is an associate professor of economics and public policy at the University of Maine. This commentary was excerpted from an upcoming issue of the Maine Policy Review published by the Margaret Chase Smith Center for Public Policy at the University of Maine.

To view the entire article, visit www.umaine.edu/mcsc/mpr.htm.