U tuition deal: regrets all around

  • Article by: ROBERT KATZ
  • Updated: March 31, 2014 - 6:09 PM

Everyone loses in the agreement made with the Legislature last year — except, perhaps, out-of-state students.

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During last year’s legislative session, the University of Minnesota and the Legislature made a deal: The U agreed to freeze tuition for resident undergraduates in exchange for increased funding from the state. Given how events have unfolded since, we can see — with the benefit of hindsight and a modicum of foresight — that this was a bad deal. A bad deal for students. A bad deal for the Legislature. And, ultimately, a bad deal for the U.

Shortly after the deal was struck, the U announced that it was raising tuition for out-of-state students and graduate students, as well as increasing dorm fees — all in excess of the rate of inflation. If you happen to be a Minnesota resident undergrad not living in a dorm, you might well feel entitled to a sigh of relief. But nothing has been done to address the underlying cause of the escalation of tuition — the growth in spending at the U. This freeze is only a postponement, not a pardon.

There is another hidden consequence of this deal — “hidden” because it harms a group of students who are nowhere to be found on campus. If students are viewed solely as revenue generators, then the new tuition regime that has resulted from this deal has made Minnesota students relatively less valuable than out-of-state students. This way of seeing things is reflected in the U’s current admission decisions. Comparing this year’s undergraduate class with last year’s, we see that the U has admitted 400 fewer Minnesotans and has replaced them with 400 more out-of-state students.

Minnesota taxpayers will not be pleased to learn that the Legislature has committed them to giving the U more money so that it can educate fewer Minnesotans.

While the U appears to have bested everyone involved, this is a shortsighted assessment. The U regularly ranks in the top 10 among public colleges in the average amount of student loan debt of its graduates. Nationally, outstanding student loan debt now exceeds $1 trillion. Nearly 12 percent of these loans are delinquent or in default. Clearly, there is something wrong with the U’s business model. Any organization whose game plan involves the ruin of a large proportion of the population it is meant to serve is headed toward self-destruction.

“Everyone loses” is not the only option. In 2000, the U’s operating expenses were $1.8 billion. Today, they are $3.6 billion. After such a huge run-up in costs, the U could easily cut its operating budget by 5 percent and still provide students with the tools they need to get a good education.

Applying this savings to reducing tuition would yield a 20 percent reduction in the amount extracted from students. The Legislature should set this 20 percent reduction in tuition revenue as a target for the U, and for every dollar that this target is exceeded, the state appropriation should be reduced by $2.

It’s time for a new deal.

 

Robert Katz is an employee of the University of Minnesota libraries.

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