Research report: Public university tuition is up because state support is down

President Obama has announced initiatives to try to make higher education “affordable” by reducing federal financial aid for students at colleges that raise tuition rates.  However, what colleges can do about rising tuition isn’t clear.

A 2002 research report by Mark Kantrowitz, publisher of FinAid,  gives a discussion of economic models of college tuition that includes such drivers as increased grants of financial aid.  Some key findings:

  • Volatility in tuition rates depends on the percentage of total revenues derived from tuition and fees. For each 1% decline in non-tuition revenue, gross tuition revenue must increase by 1.3% at private colleges and 4.3% at public colleges. Public college tuition changes are much more volatile because it depends on non-tuition sources of revenue to a greater extent than private colleges.
  • Increases in public college tuition are strongly correlated with the declines in state support of higher education.

Note that this is a report from 2002 — long before the current round of severe state budget cuts and public university tuition hikes.  However, there’s little reason to believe that the dynamic is very different today;  other reports such as the 2009 Delta Cost Project report (covered here by US News and World Report) tend to confirm Kantrowitz’ model for public higher education.

 

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One Response to “Research report: Public university tuition is up because state support is down”

  1. College presidents think you want high tuition. Really. | Dr. StrangeCollege or, How I Learned to Stop Worrying and Love the Journey Says:

    […] Research report: Public university tuition is up because state support is down (joshuadotedu.wordpress.com) […]

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