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March 21, 2012 5:05 PM Why Tuition Keeps Increasing

By Daniel Luzer

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Despite the Obama administration’s very public efforts to control the cost of higher education, many institutions continue to hike tuition dramatically. Is this about indifference to the Obama plans or is this, perhaps, a way of addressing them?

According to an article by Kevin Kiley at Inside Higher Ed:

Princeton University’s 4.5 percent tuition increase for next year, bringing the price excluding room and board to $38,650, is the university’s largest price rise in six years. Similarly, Dartmouth College’s increase of 4.9 percent, to $43,782, is larger than its increases in recent years. Yale University’s comprehensive fee will also increase about 5 percent next year.
Public four-year universities raised tuition an average of 8.3 percent last year, compared to an average 4.5 percent increase in privates. Increases in the University of North Carolina system for next year will average close to 9 percent. Price hikes will be similarly large for the California State University System. But because they are starting from a lower baseline, the total dollar increase for these institutions is still less than the smaller percentage increases at privates.

It’s worth pointing out that increases in the sticker price of college don’t necessarily translate into increases in the real cost that many families have to pay. As Kiley points out, many private institutions posting those big rate increases have such a large endowment that middle-class, and even relatively affluent, students are effectively protected from these increases.

As Matt Krupnick at the San Jose Mercury News demonstrated earlier this month, a middle-income family would actually pay less money to send a child to Princeton or Williams than it would to send the same student to Cal State or UC Santa Barbara. That’s because elite colleges offer better financial aid.

Something else may be going on here, however. Under the plan for college tuition that Obama announced in January, institutions’ eligibility for federal student aid—Perkins loans, work-study money, and Pell grants—would be tied to their success in keeping costs down. Essentially, fewer, or lower, tuition hikes mean more federal money.

But the government hasn’t actually instituted any policy changes yet. This means that now is the perfect time to hike tuition.

If in the future colleges are going to be punished for increasing tuition, and rewarded for lowering it, a great way to prepare is to just raise the baseline. It’s a lot easier to avoid raising tuition if the institution is at $43,782 a year when the federal government starts paying attention than if the college starts at $35,000 a year. [Image via]

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

Comments

  • kenrufo on March 22, 2012 9:20 PM:

    This article is daft. Bad economy at a state level, plus Republican controlled or influenced legislatures, plus a conviction against new taxes, plus a need to balance state budgets means that education - specifically higher ed - is one of the things that gets the ax, right away, when they go to balance the state budget. In the last few years this ax has fallen every year, sometimes twice a year when revised budget numbers come in. With state funding shrinking to the tune of 10 of millions of dollars less each year, these institutions can't maintain departments and facilities without their own budgetary redress, which often comes in the form of tuition hikes.

    But sure, we could ignore all that and pretend that these schools aren't working hard to maintain their own budgetary balances, and that they're not calling emergency sessions of their various faculty senates to talk about which staff is to go, or which departments may have to be "re-organized" out of existence. Nope, we could instead believe in a sort of strategic conspiracy, in which the schools are scheming to make the most of this pre-tuition hike punishment window.

    Now maybe this argument applies to private institutions, but I doubt it there, too. More likely private institutions are seeing tuition hikes at public schools and upgrading their own tuition accordingly.

    Of course, since the entire post is based purely on speculation, we could also just pose alternate speculations, just for fun. Maybe they're doing it to squeeze out the 99%. Maybe they're doing it because they're greedy. Maybe they're really doing it because they are trying to buy gold, because after all, we've seen how gold has been appreciating lately and these schools likely figure gold is a better endowment source than money in the bank. Or maybe it's something to do with aliens.

    Yawn.

    I typically expect better of the Washington Monthly.

  • Snarki, child of Loki on March 22, 2012 10:05 PM:

    Daniel is talking about just the last bit of tuition increase, and why it may be shooting up and a higher rate than in the past. (So not the past 30 years, but the last 6 months).

    There was a very good in-depth article about the underlying causes of increased college tuitions, from back in September/October 2011. LINK, or click on the "college guide" header and look for "Administrators ate my tuition".