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More public colleges may freeze tuition rates in return for more taxpayer support - Kearney Hub: State

Private colleges urge more aid from state for all students More public colleges may freeze tuition rates in return for more taxpayer support

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Posted: Thursday, January 17, 2013 8:12 am

LINCOLN — A proposed college tuition freeze puts Nebraska in league with a growing number of public colleges and universities that have promised not to raise tuition if they can get more state taxpayer support.

Public university systems in Iowa, Minnesota, Montana, New Hampshire and Washington state are among those that have explicitly offered to freeze tuition rates next school year if their state legislatures will allocate more money in 2013-14 and beyond. Other public universities announcing tuition freezes include those in Arizona, California, Rhode Island, Maine and Texas.

It's a logical strategy, higher education experts say. Research shows tuition increases at public universities are driven primarily by state budget cuts.

Yet a tuition freeze alone isn't enough to solve the problems ailing higher education, said Joni Finney, a professor of higher education at the University of Pennsylvania. Though freezes are politically popular, they can lead to even bigger spikes in tuition after the freeze is lifted, if state government funding declines and the university hasn't taken steps to control spending.

“It (a freeze) may provide students and their families some relief,” she said, “but it doesn't deal with the long-term problem of developing a sustainable financial strategy. It puts off solving that problem.”

California, Washington and Virginia experimented with tuition freezes in the 1990s, with those states boosting higher education appropriations to “buy out” tuition hikes, Finney said. But when state revenues ran short, the freezes were lifted, and students endured higher-than-usual tuition increases.

“The biggest challenge for these agreements is that when times get tough and states have revenue declines, they pull back,” said Don Heller, dean of the College of Education at Michigan State University. “The thing about these agreements is that they're only as strong as the people who make them.”

When recessions bit into state tax revenues over the past decade, many lawmakers across the country adopted a philosophy of “disinvestment.” The reasoning was that universities have the ability to raise tuition and that students and their families, as the primary beneficiaries, ought to bear a bigger share of college costs.

The recent spate of tuition freezes may signal that the policy pendulum is beginning to swing in a new direction, Heller said.

“After the recession and the run-up in (college) prices, we're starting to see pushback,” he said. “Legislators are starting to realize that the burden is getting too large for some families.”

In Iowa, for example, the Board of Regents has promised not to raise tuition on undergraduates from Iowa next year, if the Legislature and Gov. Terry Branstad approve a 2.6 percent increase in state funding for the University of Iowa, Iowa State University and the University of Northern Iowa.

Craig Lang, president of the Iowa Board of Regents, said the proposal is structured so “Iowa tax dollars follow Iowa kids.”

The University of Minnesota promised not to raise tuition on undergraduates from Minnesota for two years if state government agrees to spend an additional $92 million on the university over that span, including a $43 million boost to the general operating budget.

Several other states have used variations on the freeze theme to accomplish somewhat different goals.

Since 2007, after students demanded more predictability, the University of Kansas has offered a four-year tuition “compact” to incoming freshmen.

Though it starts out higher than KU's standard tuition, the compact rate locks in for those students for four years. Illinois adopted a similar policy for its higher education institutions in 2003. Texas Gov. Rick Perry has called for a similar approach in his state.

Last fall, Indiana University announced a plan that would freeze tuition rates for students who have completed 60 credit hours by the end of their sophomore year. The proposal is intended to minimize debt loads by encouraging students to complete their bachelor's degrees within four years.

The University of Texas at Austin will launch a pilot program this fall to pay down the student loans of financially needy freshmen who are on track to graduate in four years, said Tom Melecki, student financial services director.

In Nebraska, Gov. Dave Heineman, University of Nebraska and state college leaders jointly announced what they called “a compact” to freeze resident tuition at NU and state colleges for two years.

The freeze, which would apply to undergraduates and graduate students from Nebraska, depends on the Legislature agreeing to Heineman's call to increase funding for NU and the state colleges, an increase over two years of about 9 percent.

NU President J.B. Milliken said he hopes the freeze will usher in a new state commitment to support for higher education. He also hopes it will help the University of Nebraska-Lincoln and the University of Nebraska at Omaha attract more Nebraska students and meet ambitious enrollment goals.

He described the proposed freeze as a part of NU's long-term strategic plan, implemented eight years ago, which emphasizes prudent fiscal management, adequate financial aid for students, stable levels of support from the state and “moderate and predictable” tuition increases.

Indeed, NU's tuition already compares well to the amounts charged by many of its counterparts. While Nebraska state government did not increase its general spending on higher education in recent years, neither did it make significant cuts. It even found extra money to help pay for new facilities like a cancer research center in Omaha, a research park in Lincoln and a new stadium for Peru State College.

By comparison, the University of Minnesota's state funding has been slashed by $140 million since 2008 and Iowa's universities lost $125 million in annual state funding from 2008-09 to 2010-11.

Those who study higher education agree with NU leaders that the ultimate solution involves settling on a stable amount of state funding and establishing predictable tuition increases. It requires higher ed institutions to manage costs and policymakers to develop financial aid strategies to help low-income students afford college.

Pennsylvania's Finney said she does not know how families with young children can reasonably plan for college, given the volatility in tuition rates.

“Ultimately, we've got to figure out what's a reasonable tuition policy, instead of raising it as high as the market can bear,” she said.


Private colleges urge more aid from state for all students

LINCOLN — Private colleges say providing more financial aid to all Nebraska college students would be a better use of state funds than Gov. Dave Heineman's proposed two-year tuition freeze for the state colleges and the University of Nebraska.

The tuition freeze would be offset by a $47 million increase in the state's contribution to the NU and state college budgets over the next two years. Heineman also proposes a $1 million increase in a state grant program that benefits financially needy college students in Nebraska.

The freeze proposal “does nothing for the 33,000 students who attend Nebraska private nonprofit colleges and universities,” said Tip O'Neill, president of the Association of Independent Colleges and Universities of Nebraska.

Nebraska ranks 40th among the states on the proportion of state higher education funds used for student financial aid, O'Neill said. Most of state higher education funds in Nebraska go to support institutional operations. Many states also provide more financial assistance to students who attend private institutions.

Nebraska private nonprofit colleges and universities awarded more than 41 percent of all bachelor's and advanced degrees in Nebraska during the 2010-11 academic year, O'Neill said. He also said private institutions enrolled a higher percentage of minority students and, in 2010-11, awarded twice as many degrees to African-American students than the NU and the state college system combined.

Though O'Neill thanked Heineman for the proposed increase to the Nebraska Opportunity Grant Program, he said private colleges believe the proposed increase is “far too little.”

In the short term, he said, private colleges are calling for a significant increase in the student financial aid program. In the long term, state lawmakers should consider productivity and degree completion when they allocate scarce state resources for higher education.

Heineman declined to respond Wednesday to the concerns raised by the private colleges. “It is surprising that any education leader would take issue with a strategy to make higher education more accessible for Nebraskans,” NU spokeswoman Melissa Lee said. “Our proposal would have a tremendous impact on students and families in the state, and from the feedback we've received, we believe Nebraskans agree.”

 

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