Tuition Strategy Lacking

(Information excerpted from Inside Higher Ed)

Setting tuition at public colleges and universities is no simple task.

Governors and lawmakers approve different levels of state funding to subsidize higher education from year to year. Those same politicians are frequently unhappy with rising college costs, and they sometimes move to freeze tuition or cap its rate of increase.

tuition strategy

But flat tuition, if not accompanied by an increase in appropriations, can result in fewer sections and longer times to graduation, which is expensive for students and families. And because of the way many state aid programs are structured, public tuition rates can directly affect the amount of financial aid students receive.

In other words, setting public tuition is an exceedingly complex process involving numerous power centers. It’s a process with numerous possible unintended consequences for students’ ability to pay for college. Yet it’s a process that’s not even close to being standardized from state to state.

Most states don’t even have a single strategy for addressing affordability, according to a new report ( from the State Higher Education Executive Officers Association. SHEEO found that 68 percent of higher education agencies it surveyed had no unified affordability strategy taking tuition, fees and financial aid into account.

That lack of strategy comes even as four out of five states have put in place attainment goals for increasing the percentage of their residents with postsecondary credentials. As a result, SHEEO is calling for states to bring together governors, lawmakers, higher ed governing boards and college presidents in order to set tuition and fees in ways that line up with attainment goals.

Although SHEEO is pushing broadly for a balance to be found between the cost students pay and colleges’ revenue needs, it didn’t issue its new report to examine actual tuition costs in depth. Instead, it looked at the different ways states set tuition, fees and student aid by conducting a survey that received responses from 54 higher education agencies in 49 states.

Specifically, SHEEO is calling for policy makers to incorporate tuition policy into broader affordability and attainment strategies. Institutional revenue sources like state appropriations, financial aid and tuition should be coordinated, and more transparency should be established around institutional expenditures, the organization says. It also called for a multiyear approach to tuition policy – one that would not necessarily lock in specific tuition rates over a set number of years but would create a range of allowable increases over three to five years, allowing institutions, students and families to plan better.

There are still skeptics about the effectiveness of those strategies. Andrew Gillen, an independent higher education analyst, said increased coordination between policy makers could be worthwhile for some reasons. But he doesn’t think it will lead to a lower cost of delivering education or encourage third parties to shoulder more of the cost.

“The bottom line is that increased coordination doesn’t have much potential to reduce or reallocate costs,” he said. “And even if it did, it is unlikely students would see any of the benefit.”

There is also no guarantee that bringing different parties together would result in better coordination. Many players with power would be hesitant to give up the ability to set tuition, said Joseph Rallo, Louisiana’s commissioner of higher education. Different institutions also face vastly different situations.

Colleges and Costs: We’ve Got a Problem

While students at all levels strive for "A" grades, that letter comes into particular play in higher education with a big focus on concepts including access, achievement, accountability and affordability.

Several of those rise to the top for the Indianapolis-based Lumina Foundation for Education, which has a goal to increase the percentage of Americans who hold high-quality degrees and credentials to 60% by 2025. Last week, Lumina announced additional grants for seven states, including Indiana, that are seeking to enhance college and university productivity.

Wednesday, the latest (86-page) edition of The Fiscal Survey of States was released. Jamie Merisotis, president and CEO of Lumina, offered the following insightful comment in regard to expenditures and higher education:

"The report released today by the National Association of State Budget Officers and National Governors Association underscores the urgent need for states to reexamine the cost structure of American higher education. We cannot continue to spend twice as much per student as other developed countries and meet the nation’s needs for additional college graduates while also reducing our public investment. States challenged by falling revenue must find ways to finance public colleges and universities that encourage these institutions to graduate more students at lower expense with the same or higher quality.

Lumina is investing in potential productivity-enhancing solutions in seven states that are stepping forward to commit to change even amid dire fiscal circumstances. Governors, state legislators and business and higher education leaders all have roles to play. They need to be engaged in making sure every dollar is spent as wisely as possible to meet the challenge of increasing college access and student academic success, especially for underserved groups such as minorities, students from low-income families, first-generation college-going students and working-age adults."