A common complaint you hear these days by students and parents is the rising cost of college tuition, in some cases, a dramatic raise in tuitions and other fees. University administrators argue that the increase in tuition and fees is needed to maintain a quality education for their students. In order to maintain a quality education, universities have to attract top notch faculty, which translates into paying these professors high salaries.
Critics of colleges and universities argue that a college education is already overpriced. To add insult to injury, after students and their parents pay exorbitant costs for a college education, graduates can’t find work, as many of the undergraduate majors do not lead to good paying jobs immediately upon graduation.
Students and their parents are now questioning the value of a college education and evidence of this is the leveling of enrollments, or in some cases enrollment decreases, that we have seen recently in higher education institutions. College and university administrators have been heeding this concern and are instituting tuition freezes, tuition leveling and even tuition cutting. Tuition freeze is typically defined as tuition that is kept unchanged for a specified number of years; however, other fees and room and board charges are typically increased each year. Tuition leveling is where tuition is frozen for four or more years for each class, but college increases tuition for each successive incoming class. This is also known as a guaranteed tuition rate or tuition lock. As the name implies, tuition cuts are where the college reduces tuition by a certain percent, 10%, 20%, or more, and is invariably a one-time event. One side effect of tuition cuts is that the college will also cut financial aid at the same time, since financial need will be reduced for all students.
A survey by conducted FastWeb last year indicated that 21 colleges cut tuition by as little as 8% to as much as 50%. Some of these schools were very creative in cutting tuition, for example, cutting in only certain degree programs or only in-state tuition. One of the positive results of cutting tuition is an increase in student enrollments, which can make up for the lost revenue in tuition. One college in the survey cut tuition by 42% and saw an increase of 60% in freshmen students.
In the same survey, 64 colleges were reported to have frozen tuition. Tuition was held constant for a period of four years, but tuition was increased for each new freshman class entering the university in subsequent years. If a student dropped out and returned, they would have to pay the new tuition rate at the time of reentry, typically higher tuition.
Thirty-two colleges reported that they had instituted tuition leveling. This is becoming popular among college students and parents as costs are held constant, which allows them to better plan for the cost of college. Students are now viewing tuition leveling or tuition cutting as a contractual agreement between the college and the student. Tuition freezes are considered more common in community colleges and public four-year colleges and less common in private four-year schools.
However, students much be cautious not to assume that those colleges that have frozen tuition will keep it frozen throughout their entire college education. During times of a recession, as history has demonstrated, college and university administrators raise tuition to make up for the loss of state and/or federal funding. Moreover, the trend during the last several decades has been for states to decrease funding for their colleges and universities. If the trend continues, tuition freezes or cuts may not be possible.
As a former president, I can tell you that freezing or lowering tuition is a very difficult and tricky task. The costs of operating a college or university are typically fixed costs and rarely, if ever, do they decrease. If anything, operating costs like utilities, employee benefits, to name a few, usually raise at rates higher than the cost of living. Employee salaries are another major cost of operating a university and being able to give salary raises when you are freezing or cutting tuition, can be difficult, if not impossible. For most colleges and universities, tuition is the major source of revenue.
I commend the colleges and universities who have frozen or lowered tuition. I hope that other institutions of higher education follow the example set by these colleges. If colleges and universities do not become more cost effective, I fear that future students will begin to vote with their feet. The signs are already there.
