Higher education systems and institutional development

¶ … Tuition in Higher Education on Graduation Rates

Introduction/General Description:

One of the problems that universities often face is the decision on whether or not to raise tuition rates. Rising costs of maintaining the university, lower private funding gifts, reduced public funding, and increased salaries due to rising costs of living can mean that simple budgetary costs are not enough. For this reason, many universities look towards increasing tuition for their students as a means of offsetting these increased costs and reduced incomes. However, there are consequences beyond the budget when tuition is raised. Increased tuition costs directly affects students and their ability to attend university. The question then becomes -- What are the effects of increasing tuition for higher education on graduation rates?

Major Research Question:

The problem that will be studied will be how tuition increases affects graduation rates in higher education. Specifically, this research will look at both incoming enrollment rates, which will directly affect future graduation rates, as well as continuing enrollment of students and graduation figures, once tuition rates are increased in comparison to historical figures. By comparing these figures, and the anticipated increase or decrease in these figures before tuition rates were increased, the study will be able to determine if the increase in tuition had an effect on student enrollment and graduation numbers.

Review of Relevant Literature:

Trombley (2003) highlights the fiscal problems that many universities are facing. Using data from the National Center for Public Policy and Higher Education, Trombley notes that state spending for public universities has been declining in recent years, across the United States. To make matters worse, many states also have reduced their student financial aid programs. The economic recession has negatively affected nearly every state and as is continued to grow worse as appropriations for higher education continue to be cut from state budgets and student financial assistance is reduced even further. Appropriations dropped in 2003, in 14 states, with the worst being an 11% drop in Oregon. Raising tuition has been a common response to these decreases in funding.

At four-year public universities tuition rose in 2003 in every state in the country. In Massachusetts, tuition increased by 24%. Texas, Missouri and Iowa all saw tuition increase by 20%. North Carolina had an increase in tuition of 19%, while Ohio saw an increase of 17%. In the end, 16 states had tuition and fee increases of more than 10% in that one year alone. According to Trombley (2003), New York's 2003-2004 State University budge was cut by $184 million, resulting in then Governor Pataki suggesting a 35% increase in undergraduate tuition for SUNY students. Community colleges too saw tuition raises and increases in mandatory fees in 48 of the 50 states. These increases in costs directly affect the students that have to pay them.

DeMoranville and O'Donnell (2001) investigated the effects of increases in per-credit-hour tuition on four-year graduation rates and how they are marketed to minimize enrollment effects. These authors too understood that increases in tuitions and fees directly has a negative impact on students. Their study examined whether or not a sliding scale tuition rate would increase the graduation rates. The researchers found that a sliding tuition rate scale does not positively affect four-year graduation rates when tuition increases are incurred.

DeMoranville and O'Donnell's (2001) research is important because it shows a history of negative effects incurred by increasing tuition. However, as times have changed such as the increased need for higher education in a competitive job market and the availability of online universities, this may no longer be the case. This new research will add to the discussion by determining if societal changes, as well as changes in the higher education system itself, have minimized the negative impact on enrollment and graduation that traditionally occurred with increases in tuition.

Statement of Objectives/Methods: