Tuition Increases in Public College

Tuition Increases in Public College

The 20th Century saw an increase in tuition at public colleges which outpaced the rate of inflation by roughly two to three percent. The mid-1980s were the first time that the cost of tuition moved beyond the reach of the median family income. Most college graduates are able to earn almost 2.5 times the income of high school graduates. It is more important than ever that post-secondary education remain affordable in public college. Why have tuition rates raised so dramatically? What are the effects of tuition increases on students? What are the effects on families? And what is the effect on the public institutions themselves?

In private institutions, there is a system of shared governance between trustees, administrators and faculty. Because of this, private institutions are able to react more slowly to cost pressures. Trustees at private college are often times able to assess financial investments on behalf of the school, effectively cut costs and meet budgetary needs. When the president of a private school comes to the board with monetary requests, especially for items or programs that attract students, the board is likely to support the president and approve the expenditure.

For public college, the board often is not responsible for tuition levels and educational appropriations. Administrators and trustees are at the mercy of politicians. In both the public and private setting, higher education continues to spend most of its budget on human resources. In order to attract the best students, colleges must have the best scientists and professors. Since appropriations for public college often do not keep pace with these costs, the schools must reduce costs or else increase tuition. The alternative would require a reduction in course content, reduction or elimination of departments and staffing cutbacks.

It is often difficult to know exactly what effect tuition increases have, both in the short- and long-term. While public college education prices increase, no long-term studies have been done to assess the effect tuition increases have on enrollment patterns. This may be because in general, increases in tuition have been implemented in an incremental fashion. A study done in Hawaii showed that from1986 to 1994, tuition at public institutions (university and community colleges) increased slowly but enrollment continued to grow1. The 1990s brought a rapidly slowing economy which in turn brought state budget cuts, resulting in tuition increases in some public colleges amounting to 90% over three years. The corresponding decrease in enrollment was only 7%, but it is interesting to note that student performance improved after tuition increases. Three indicators (grade point average, course completion and graduation rates) showed a significant improvement, but for this study there are several others that correlate an increase in tuition rates with negative student outcome. Financial aid is adjusted based on tuition increases. For this reason, lower-middle income students are the most likely to be affected by tuition increase and constitute the major demographic for enrollment decline.

Tuition increases generally result in higher education costs, which will be borne by students. This in turn makes education more difficult for lower middle income students to access, and by some is considered to be an issue tantamount to social injustice.

When tuition increases are mandated, it falls upon the school to be sure that there are more scholarships available, especially for those students from target demographics. Some students who do not easily qualify for programs and yet cannot easily bear the cost of education without them.

Since studies on the effect of tuition increases are few, it falls upon the public school to evaluate the impact of tuition increases on the student population. Schools are also tasked with periodic follow-up on the ongoing requirement for tuition increase, as well as maintaining a dialogue with students on the quality of education vice the increase in cost.

When public colleges are required to increase tuition, they also bear the burden of detailing how additional tuitions will be used. It is most effective when schools implement tuition increases that a portion of the increase be used to plan cost-cutting measures which in turn will reduce the need for future increases.

Many parents facing tuition increases are in precarious financial situations. Most families require that both parents work, and the loss of a job or the breakup of a marriage can reduce financial standing.

Unstable economies which drive up tuition costs also leave families with less income to commit to education costs. Many states now provide prepaid plans and state 529 plans, allowing parents to save in advance for student tuition costs. These plans protect parents against tuition increases for years in the future and allow the states to have money in the 529 reserve accounts. These programs are helpful for the parents, but may possibly place public colleges in a poor financial state should the future be unstable economically. The systems are also complex and now require that many schools employ professional organizations to assist with management.