Archive for Tuesday, April 21, 2015

National reports show tuition rates rising as state funding for higher education declines

April 21, 2015

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— A pair of reports released this month document a national trend in higher education that is also visible in Kansas: declining levels of public support, resulting in higher tuition costs for students and their families.

The two reports came from the State Higher Education Executive Officers Association and the American Association of University Professors. Both suggest that declining state support for higher education is the primary reason for the rising cost of tuition.

“Net tuition revenue typically grows faster when state and local revenues fail to keep pace with enrollment growth and inflation, because more students pay tuition and some institutions may charge more to compensate for declining public revenue per student,” the report from the executive officers group stated.

The executive officers report looked at funding trends in higher education over a 25-year period, from 1989 to 2014 and found that state and local funding for higher education fell sharply during the Great Recession that began in 2008.

But while public funding has rebounded slightly as the economy recovered, it still has not reached pre-recession levels. The result has been that colleges and universities are now relying more heavily on tuition revenue, which has been fueled by higher rates as well as growth in enrollment.

From 2008 through 2014, the share of higher education expenditures coming from state appropriations fell from 62 percent to 51.1 percent. During that same period, the share coming from tuition revenue grew from 31.8 percent to 42.7 percent.

State Sen. Laura Kelly, of Topeka, the ranking Democrat on the Senate Ways and Means Committee, said that same pattern has occurred in Kansas as well.

“We know it has. If you just look back over — not just this administration; it’s been going on for 15-20 years — we’ve been lowering our state aid to Regents institutions; less so to community colleges and technical schools,” Kelly said. “It’s been a very clear pattern.”

In 2008, according to data from the Kansas Board of Regents, the state of Kansas provided $638.5 million in base support for higher education, or 56 percent of the total “general use” expenditures for state colleges and universities. By 2014, that amount had fallen 11.6 percent to $564.5 million, or about 44 percent of general use expenditures.

During that time, all state-funded institutions raised their tuition rates, and some saw significant enrollment growth, especially at the two-year community colleges and technical schools. The share of general use expenditures coming from tuition during that time rose from 41 percent in 2008 to 54 percent in 2014.

But Kansas Board of Regents member Fred Logan said declining state support has not been the only factor causing tuition rates to increase.

“I do think declining state investment is part of the equation,” Logan said. “If there’s an increase in base aid for higher education, there’s an opportunity to restrain tuition. We’ve been using tuition to cover basic cost increases and relatively modest compensation increases, which I think is perfectly appropriate. … It’s too complex to say declining state aid is the only factor, but it certainly is a factor.”

In a separate report, the American Association of University Professors tried to dispute the argument, often raised in statehouses around the country, that faculty salaries are to blame for rising tuition.

“The claim that faculty salaries are primarily to blame for tuition increases seems to be based on the assumption that, because tuition prices are increasing, expenditures must also be increasing,” the professors’ report stated. “Since many view colleges and universities as having large numbers of faculty, particularly tenured and tenure-track faculty, on their payroll, they often conclude that sharp increases in faculty salaries must be the reason for tuition increases.”

But the report cited statistics gathered from more than 4,000 institutions nationwide, including both public and private schools, showing that average faculty salaries have risen much more slowly than tuition costs.

At four-year public institutions that offer doctoral degrees, average salaries grew only about 5.6 percent from the 2008-2009 academic year to 2012-2013, the report said. Average net tuition costs — a figure that excludes the amount funded from student financial aid — rose more than 10 percent over that same period.

“Total state appropriations for higher education matter,” the professors’ report said. “For thirty-seven of fifty states, when total state appropriations decreased, average net price tuition increased. Conversely, for three states, when total state appropriations increased, average net price tuition decreased, resulting in savings to students.”

Kansas lawmakers are actively considering a budget proposal to stop that trend here, but it’s one that some higher education officials say could be even more harmful to institutions. It calls for holding state funding for higher education essentially flat while imposing a freeze on tuition rates for the next two years.

“I’ve suggested that the Legislature revisit that issue. I think it’s not a good idea,” Logan said. “The Legislature very wisely, I think, gave that decision to the Regents about a decade ago, and I think that’s where it should reside.”

Rep. Ron Ryckman, Jr., R-Olathe, who chairs the House Appropriations Committee, said that proposal grew out of frustration that universities were raising tuition to make up for decreased state funding, leaving many students with higher debt when they graduate.

"When we have reductions to higher ed, the cost gets transferred onto students," he said. Conversations just led to that. It was a way to effect change in the universities. We’re all concerned with the amount of debt our students at universities leave with. That's something we all agree on."

The tuition language is in a compromise budget bill that House and Senate negotiators have tentatively agreed to, but which is still in a conference committee.

Lawmakers will finalize the state budget for the next two years when they return to Topeka on April 29. But Kelly said she does not think the proposed tuition freeze will be part of the final package.

“I won’t be surprised if it goes away,” she said. “There has been a tremendous amount of push-back on that.”

Comments

Richard Heckler 2 years, 2 months ago

THAT is only part of the reason for cost of increases to higher education. This problem has been around for about 10 years and it is sending student to the moon. It's the financing that encourages big student debt and most certainly it is the financing that inflates the cost of higher education.

Has anyone ever been curious as to how college became so expensive and how the college loan program also became so expensive and perhaps a little bit corrupt?

Yet no agencies are doing anything about it. No matter the loan industry is laughing all the way to the banks. While preventing zillions of college grads form being successful and destroying their credit histories.

The Scam Wall Street Learned From the Mafia :

http://www.motherjones.com/search/apachesolr_search/College%20loans

http://www.rollingstone.com/politics/news/ripping-off-young-america-the-college-loan-scandal-20130815

FRONTLINE - http://video.pbs.org/video/1485280975/

Andy Anderson 2 years, 2 months ago

Good post Mr. Heckler.

The greedy want money. Government schools are in on the greed scheme.

Social justice dictates, President Obama should command all government colleges be free.

To pay for the free government schooling, he should command the treasury to stamp the trillion dollar platinum coin.

Gerald Kerr 2 years, 2 months ago

The cost of educating students is rising and has been rising rapidly for several decades. Increased tuition costs are caused by reduced direct payments to colleges from the state, increased numbers of administrators and adjunct administrative personnel, increased costs of benefits for teachers and administrators and staffs, increased building and maintenance costs for ever more sophisticated and expensive data handling, library, gym and athletic venues.
The States are not going to increase their spending to support higher education as the citizens refuse to become permanent tax slaves for the benefit of upper echelon academics, bureaucrats, and politicians.

If college instructors are to maintain their present level of salary and benefits they must demand savings in capital building and maintenance costs as well as decrease in the number of Administrators and their ancillary minions. The additional money is not going to come from continued relentless tuition increases or increased direct payments from government and the tax base.

Andy Anderson 2 years, 2 months ago

Thanks for pointing out the ebb and flow of government greed.

Scott Quenette 2 years, 2 months ago

The average professor goes to school for 10 years to attain that position. How hard did you work to get your job?

Andy Anderson 2 years, 2 months ago

Heh...

One with any drive at all, never gives up working hard.

But, I am close with many government Prof's that have their teaching assistants do all the hard work. The Prof's are busy being 'experts' or 'distinguished' of this n that.

Jonathan Fox 2 years, 2 months ago

The article fails to point out that while state funding goes down, universities across the country are spending way more year after year, outpacing inflation 2-4+ times. The extra cost at universities insn't so much faculty, but ridiculous administrators, ammenities, and sports venues.

Steve Jacob 2 years, 2 months ago

Blame to go around. Federal government will loan money to everyone, kids dumb enough to take more of it then they need, bloated university spending, and more and more employers wanting degrees for jobs that don't need it.

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