PSU Deserves Funding that works for Oregon's Workers

Among Oregon’s seven higher education institutions, only one holds court in the state’s largest city: the financially troubled Portland State University.

PSU’s mission differs from those of its six peers, and so does its student body. Nearly half of PSU students transfer from community colleges. Fully 40 percent are the first in their families to attend college. Many are working adults or caregivers juggling jobs and classes.

The university educates the people who power Oregon’s workforce: teachers, counselors, social workers, engineers, planners, and public administrators. When PSU struggles, so does the pipeline of skilled, community-rooted workers who keep the state running.

Investing in PSU means investing in an opportunity for Oregon’s first-generation and diverse students. The university is on track to become a federally recognized Hispanic-Serving Institution, with nearly a quarter of new undergraduates identifying as Latino or Latina. It already serves the most diverse student body in the state—students whose success strengthens families, communities, and Oregon’s economy.

Lawmakers have noticed PSU’s unique role. In 2021, the Legislature recognized it as Oregon’s only public university located in a major urban area. Earlier this year, House Bill 2556 went further by designating PSU as Oregon’s Urban Research University. The designation is important, but without funding to match, it’s just a title.

Elsewhere in Oregon, at the four smallest schools and at the two flagships, Oregon State University and the University of Oregon, funding also lags.  The large flagships, however, are able to attract thousands of out-of-state students and hundreds of millions of dollars in research grants. Those revenues help cushion them from declining state support.

PSU cannot do this, however. Its funding depends largely on in-state tuition and the Public University Support Fund, distributed through a formula that awards headcount rather than mission. That leaves little flexibility to invest in what matters most: faculty stability, student success programs, and community-based learning that connects education to work and civic life.

Why should policymakers care?  Each year, PSU contributes $1.8 billion to Oregon’s economy, supports more than 11,000 jobs, and generates $714 million in labor income, according to a 2024 study by the Northwest Economic Research Center. In contrast to the flagships, more than 80 percent of PSU graduates remain in Oregon, working in the public and private sectors that sustain local communities. Few universities have such a direct and lasting impact on the state’s workforce.

National research supports this. Studies show that regional public universities like PSU deliver the strongest return on investment for working families and local economies. Yet Oregon’s funding model rewards research dollars and residential capacity—criteria that privilege flagship universities and penalize access-driven campuses like PSU.

If Oregon wants a higher education system that truly serves working people, it needs to fund universities in line with their missions. For PSU, that means recognizing it as the state’s leading regional-serving institution, with enhanced per-student funding and dedicated workforce partnership grants in education, healthcare, sustainability, and public service.

Flagship universities will continue to pursue out-of-state tuition and research dollars. That is their role. PSU’s role is different: to educate the people who stay, work, and build this state.

Oregon needs both kinds of universities, but it needs to fund them fairly. Supporting Portland State is not charity. It is an investment in Oregon’s future workforce.

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Ramin Farahmandpur is a professor of education at Portland State and former vice president for legislative action for the PSU local of the American Association of University Professors.