Why state school tuition continues to soar

Tuition Ignition: A week-long series looking at the soaring cost of college at public and private institutions

Things are bleak for students at the University of Washington, where tuition ratcheted up 16% this year and is poised to go up another 14% in the fall -- raising the price tag by more than a fourth in all.

The university cut 800 jobs last year, and student leaders are bracing for cuts that would halve the university's budget by 2012 compared to 2009. That could mean another 1,500 layoffs, and no one is willing to say what will happen to tuition.

"What's going to happen if we take another 20% cut to our budget, when we've already trimmed out all the fat?" says Jake Faleschini, a UW graduate student and president of the Graduate and Professional Student Senate.

Sound bad? It's hardly unique at the nation's public universities these days.

In-state tuition that once looked affordable, even downright cheap for a bachelor's degree, is now something to balk at for many students. Tack on a sudden $1,000-per-year increase, and it's that much harder to swallow.

The cost of going to public institutions has been climbing steadily for the last 30 years, federal data show. Without counting the most recent hikes, average in-state tuition went up 864% between 1976 and 2008. Adjust for inflation, and tuition bills tripled in that time -- and that doesn't even count housing, meal plans and other expenses.

In many cases, what students pay far surpasses the national average. For example, in-state undergraduate tuition at UW will be $7,700 this year. Add in room, board and other costs, and new undergrads can expect to shell out more than $21,000 for their freshman year.

"In every recession since 1982, you'll see that tuition went up more rapidly than they had previously," says David Longanecker, the president of the Western Interstate Commission for Higher Education, a nonpartisan think tank. "The trouble is, when times got good and state appropriations increased, tuition continued to go up."

State schools, eager to improve their stature and compete with private institutions, added advanced degrees, new colleges, research institutes, even entire new campuses. At the University of California Merced, enrollment lags well behind projections since opening in 2005 -- but administrators are now pushing to add a medical school. They argue the new programs will draw students who wouldn't otherwise look at the school, in California's rural Central Valley. But does such reasoning -- and spending -- hold up in light of the school's lagging enrollment overall?

Factors such as these have pushed up tuition at public institutions, Longanecker says, along with the realization that most students and parents will continue to pay as tuition rises.

"We got to a point where we could charge more, and so we did charge more," he says.

Stephen Jordan, the president of Metropolitan State College of Denver, points out that many public universities have had a hard time keeping their costs in line because there have always been ways to bring in more money.

"Higher education has done this so successfully," he says. "In the past, they always thought they could ride out these things."

Metro State is taking a different approach, one that Longenecker credits with being more proactive and reform-oriented.

Rather than using federal stimulus money to make up for a $10 million loss in state funding last year, as many universities have done, Metro State went ahead with a hiring freeze, eliminated a controversial faculty bonus pay program and laid off some staff, Jordan says.

The stimulus money went toward 35 new technology-related projects: scanning in every transcript and piece of paperwork in the registrar's office, for example, and converting admissions to a completely online and paperless system.

The university even found a novel way to rein in the costs of keeping longtime faculty on board, by offering them two years of funding to do capstone projects in their fields if they agree to surrender their tenure at the end of that time. While tenure can be cushy for many professors, they wouldn't otherwise have the funding to do these special projects, which give outgoing professors a way to leave a more tangible legacy at Metro State, Jordan says. That lets the school hire junior professors to fill those spots and bank the rest of the money that it saves.

For now, tuition increases at Metro State are capped under state law, but Jordan and other administrators are looking to change that. At $3,000 per year for Colorado residents, Metro State is inexpensive, and Jordan knows it.

"We have the capacity to raise tuition, there's no question about that," he says. Doing it without pushing away low-income and minority students is the trick.

It's a question that hangs over many public institutions, which pride themselves on staying within reach for low-income residents.

Back at UW, the Husky Promise program, which covers all college costs for low-income students, has escaped budget cuts so far.

"The low-income kids are going to be fine," Faleschini says. "It's your middle-income kids that are going to have a really hard time, with tuition rising and no help really being offered for the middle class."

Here's a crude analogy: Just as many middle-income families will continue to pay more for gasoline or a gallon of milk -- on top of tuition at top-flight private elementary and high schools -- many of those families will swallow rising college tuition bills, and the schools know it. Compounded with credit card debts, mortgages, and even second mortgages, college tuition is exacerbating the financial drain on middle-class families.

For low-income families, state-funded programs that make college tuition manageable at some schools are becoming that much more crucial. Most of the programs combine state grants with a student's Pell Grants to cover tuition; the idea is to do it without foisting loans on poor students.

But not all states have such strong programs, and in some, money is running out for poor students. When the money vanishes, students will too, Longanecker says.

"Then you'll find states like California, Nevada, Arizona, that are just in a world of hurt," he says. Soon, students in those states could be, too.

Coming Wednesday: Tuition at a growing number of private institutions now tops $40,000 per year; add in room, board and other expenses and that number is close to or above $50,000. Money College examines the role that faculty salaries, building projects and administrator pay all play. Send us your tuition stories to MoneyCollege@WalletPop.com.
Read Full Story