30 April 2012

More on Levelized Tuition

Writing in the Boulder Daily Camera, Bob Greenlee, a local columnist, finds the idea of a levelized tuition model appealing:
All state universities are proud icons representing the faith, hope, and future economic health of local taxpayers whose funds make state institutions possible. The level of state funding in Colorado has declined over the years to the extent that one can question whether or not CU is state supported or merely state named. The declining level of financial support may not be keeping pace with the growing needs of this important institution that is relying more on tuition hikes to keep the lights on and retain the talent required to maintain basic academic standards. For both parents and students the rising tuition costs are becoming a burden with studies indicating the amount of debt carried by students who mortgage their future exceeds the total amount of all credit card debt held by American consumers.

A number of intriguing observations about these issues have emerged from Roger Pielke, Jr., professor of environmental studies at CU-Boulder. Last year Pielke wrote an article in the Chronicle of Higher Education attempting to gain support for completely revamping how tuition is charged. Tuition for in-state CU students currently runs around $7,700 a year. Out-of-staters pay nearly four times as much. Pielke notes the financial viability of CU depends on "securing a large proportion of non-residents (that) creates incentives to favor their admission." He notes that two-thirds of all tuition income comes from a third of those attending the university and questions why there should be a distinction because the economic benefits that accrue for someone obtaining a college education are universal. Perhaps, he argues, a flat tuition of around $14,000 should apply to everyone and rather than state higher education funds going directly to the university he proposes Colorado should provide a direct subsidy to resident students.
I'm glad that he put that last bit in. The notion of a levelized tuition does not mean eliminating the state subsidy for in-state students. Nor is it about increasing tuition. It is about adopting a model for financing a state flagship university that aligns incentives with costs, and works to elevate quality of instruction, facilities, faculty and students.

For those wanting a bit more background, here is a link to my original essay in the Chronicle of Higher Education.   I also discussed this proposal on this blog here and here and here and here and here and here.

3 comments:

  1. Roger, do you know what has been driving up the cost of higher education beyond inflation? Are there not two issues at play here -- 1 being the decrease in state funding, and the other being that universities, for some reason, are just becoming more expensive to run. While adopting a model that makes state subsidy more apparent, this doesn't seem to address a fundamental issue that higher education is going up in cost beyond the decline in state subsidy.

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  2. -1-Jeff Kessler

    It is important to distinguish the difference between the price of higher education and the cost.

    It is the price that has grown faster than inflation here at Colorado, not the costs (which actually have been cut sharply), and I suspect that there are similar trends at other state universities. Over the past decade, much of the increase in tuition represents a burden shift from the state government to university attendees. See:

    http://rogerpielkejr.blogspot.com/2012/01/were-number-50.html

    Also, the published tuition is typically not the actual price in many instances, see the College Board for lots of good data:

    http://trends.collegeboard.org/downloads/College_Pricing_2011.pdf

    Thanks!

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  3. Roger, I'll check out the collegeboard.org pricing information.

    I did some back of the envelope analysis for UC Davis a few weeks ago, which, based on my assumptions, shows that the price of education is going up beyond the level that would be expected due to a lapse in state funding: http://thenextcase.blogspot.com/2012/04/diseconomies-of-scale-and-education.html

    The CU model seems to have shifted the decline in state funding over to out of state students, but that doesn't seem to be the case at UCD. Of course, I have simplified my analysis, as the increased cost could very well be contributing to an increase in student aid for low income students.

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