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Who is to blame for rising tuition prices at public colleges?


The Penn State University campus. (Rob Carr/Getty Images)

Complaints about rising college costs are nothing new, but for students and parents calculating the price of college these days, the exercise has become a much more complicated task compared to just a decade ago.

Tuition at four-year public colleges, which historically had always been well below the sticker price of private colleges, has risen more than 100 percent in real dollars since 2001, after taking inflation into account. Meanwhile, the discounts offered by private colleges on their prices are now above 50 percent on some campuses, bringing their “net-tuition prices” — that is, what students actually pay — closer to public schools. And the gap between in-state and out-of-state tuition prices charged by public campuses has grown significantly in many states as colleges see out-of-state students as a critical revenue source.

Then there is the news out of Pennsylvania this past week that a 4-month-old state budget impasse might lead the so-called state-related campuses — Penn State, Temple, Lincoln and the University of Pittsburgh — to eliminate lower tuition prices altogether for in-state students.

Leaders at those four Pennsylvania schools blame state lawmakers for bringing their institutions to the brink of what would be a hefty tuition increase — about $10,000 at Penn State alone. Since 2000, lawmakers have been chipping away at taxpayer appropriations to the Pennsylvania schools, which have seen their share decline by some $4,000 per student. Average tuition revenue increased by $5,880 per student over the same period.

The story is similar in other states: Appropriations to public colleges are cut, or at the best, remain flat, and then tuition prices go up. That has resulted in a narrative repeated among public university officials nationwide in recent years that as states get out of the business of higher education, students are shouldering more of the cost of their own education.

But the precise impact of state budget cuts on student tuition has never really been clear — a drop in one doesn’t usually lead to an equal increase in the other. “There’s this accepted narrative that is repeated everywhere from Capitol Hill to state legislatures with very little evidence,” Jason Delisle, a resident fellow at the American Enterprise Institute, told me. He found only three studies addressing this question over the last two decades. “Anywhere else in higher education, few people would make the assertions they are making with that little evidence,” he added.

The body of research on the topic is slowly growing, however, as two studies in recent months have attempted to answer the question about whether state budget cuts are to blame for higher tuition prices. One, by the right-learning American Enterprise Institute, found that tuition prices at public institutions rise by only $5 for every $100 cut from direct subsidies per student. The other, in the journal Economics of Education Review, found the pass-through rate is about $25 for every $100 cut.

Although the two studies landed on somewhat different numbers, Delisle said the spread between the two still shows that a majority of tuition increases aren’t tied to cuts in state budgets. “There’s something else going on with tuition that is out of the hands of state legislators,” he said.

The author of the second study, Douglas Webber, a Temple University economics professor, told me that calculating the cost of state budget cuts on students is difficult because multiple factors influence tuition prices. In some states, college leaders are limited by law in how much they can increase tuition; in other instances, they might decide to hold the line on tuition by trimming their own budgets first or raising more money through private sources.

While it might not be clear who is to blame for higher tuition prices, there is no doubt that students at public colleges are shouldering more of the burden of paying for their education, whatever the reason. It used to be that higher education was seen as a public good that taxpayers support. The renowned University of California system was tuition-free for state residents until the late 1960s. As late as 2001, when I covered the University of North Carolina system as a reporter, tuition and fees across the system were about $2,000 a year (today, tuition at the flagship Chapel Hill campus is about $8,900).

Nowadays, higher education is seen as a private good that individuals pay for. This massive shift in public policy largely happened without much debate. A while back when I asked a legislator in Oregon if it was appropriate for students at public colleges to pay $40,000 for four years of college, the response I got was this: “Sure, that’s the price of a new car.”

What’s notable is that increases in public college tuition have mostly come at the hands of state lawmakers and higher-education leaders who themselves benefited from low tuition rates at state universities when they earned degrees. In most states, tuition decisions have not only come without much debate, but without much of a long-range plan for the future of public higher education: Who should it serve? Who should pay for it?

Instead, colleges and lawmakers have limped along patching together short-term strategies, such as increases in out-of-state enrollment, to bring in more revenue. Tuition has too often turned into the balance-wheel of state finances, the go-to source for dollars when budgets for states or universities didn’t quite even out at the end of the day. It’s unclear how much longer both groups can use tuition as that lever they pull every year, and we might soon find out what the consequences of a lack of planning will be in Pennsylvania.


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