Sense grows that there's a limit to high tuition/high aid pricing.
Two signs that the long-running American higher-education tuition escalator is slowing and may be coming to a halt appeared in Minnesota in recent days, at two very different institutions.
• Concordia University of St. Paul announced that it is rolling back annual tuition and fees for full-time undergraduate students by $10,000 -- 33.7 percent -- beginning in the 2013-14 academic year. The change will reduce the institution's outlays for financial aid, and make the $19,700 sticker price come closer to what many students actually pay.
• University of Minnesota President Eric Kaler proposed a two-year base undergraduate tuition freeze if the Legislature commits to increasing state support $14.2 million per year in each of the next two state fiscal years. He hinted that the freeze could continue beyond that if the state continued to restore funding that it cut during recurring state budget crises in the past decade -- cuts that have left state support for the university today at its 1999 level.
Both of these moves reflect growing doubt about whether the "high tuition/high financial aid" postsecondary pricing model that has prevailed for decades can be widely sustained much longer.
Asking students and families with incomes just out of the reach of financial aid limits to shoulder an ever-greater share of college costs is looking increasingly unrealistic at many institutions of higher learning. It has resulted in soaring student debt and uncomfortable questions like the one on the Sept. 17 cover of Newsweek magazine, "Is College a Lousy Investment?" (The clear answer to that question is "No!" A recent Georgetown University analysis said that on average a bachelor's degree adds $2.8 million to an American's lifetime earnings.)
The two disparate Minnesota institutions that made tuition news recently came at the issue from understandably different perspectives. One is a private, church-related liberal arts university with 1,200 full-time undergraduates; the other a world-class, state-supported research institution serving 35,000 undergraduates on its Twin Cities campus alone.
Concordia's move came in recognition that so many of its students receive financial aid that almost no one pays this year's $29,700 tuition. Yet that advertised price keeps some students and families from even considering Concordia.
"It's harder and harder to market ourselves in a way that justifies high tuition costs, when they aren't really legitimate," said Eric LaMott, the school's senior vice president and chief of operations. Similarly situated liberal arts colleges around the country are taking note, he added, suggesting that Concordia's assessment of its market is not unique.
Kaler's tuition proposal to the University of Minnesota Board of Regents, and ultimately to the Legislature, springs in part from the same concern about serving middle-income students and families.
But it also speaks directly to the biggest single cause of rising tuition at the state's flagship university in the past 10 years: repeated reductions in state funding. State higher-education spending per student dropped 35 percent in Minnesota between 2000 and 2010 -- one of the largest such declines in the nation. It's no coincidence that the state also recorded one of the nation's biggest spikes in net per-student tuition revenue at its state-supported colleges and universities between 2006 and 2011.
It cannot be said that the University of Minnesota has failed to implement cost-saving changes during the same time. The university has frozen salaries twice in the past four years, has implemented energy saving strategies, has taken little-used physical plant space offline and has streamlined back-office operations. Kaler says the per-student cost of instruction at the university is 13 percent lower, adjusted for inflation, than it was 15 years ago.
But the university also served 14.5 percent more students in 2011 than in 2001. And its work is more crucial than ever to the state's economy. Discoveries at the university led to the creation of 12 new private-sector companies in Minnesota in just the past year. Minnesotans should not want to starve this golden goose.
Kaler's tuition freeze proposal for the next two years includes a promise to cut institutional spending by an additional $28 million. It suggests a number of tax incentives for students who enroll at any nonprofit Minnesota college or university, public or private, as well as for donors who support student scholarships at those schools. And it asks the Legislature to spend $18 million in the next two years on research that promises to spur job creation in fields such as robotics, food supply security, brain science and environmentally safe mining.
It adds up to a strategic, straightforward message to legislators and to the voters who elect them: The University of Minnesota can do great things for this state and freeze tuition, too -- but only if state taxpayers stop cutting and start investing again in higher education.
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