Higher education trendspotters are seeing signs that America’s high tuition/high aid college pricing model is reaching its limits. Tuition rollbacks for the sake of attracting more students have been ordered by a number of college governing boards this fall, as the gap between sticker prices and the average prices students actually pay has become indefensibly wide at many institutions.
It cannot be said that in this regard, University of Minnesota President Eric Kaler is a trendsetter. On the contrary: Kaler is back at the Board of Regents for the third straight year with a proposal for a double-digit increase in the tuition and fees charged nonresident, nonreciprocity students (that is, those not from Minnesota, Wisconsin, North Dakota, South Dakota or Manitoba).
His proposal for two back-to-back years of 15 percent increases for those students would bring their tuition and fees to nearly $35,000 by 2018-19, putting those charges in the middle among its Big Ten peers. It ranked 11th out of 14 in 2007 when then-President Robert Bruininks convinced the regents that reducing tuition for nonresident, nonreciprocity students was a smart and timely move, both for the university and for a state with a declining 18- to 24-year-old population and a looming skilled-worker shortage.
The claims for the change Bruininks made have largely been realized. Enrollment of nonresident, nonreciprocity students — both international and domestic — is at 6,564 this fall, up from 2,106 in 2007-08. The quality of students from other states and nations has helped drive up student retention and graduation rates, boosting the U’s academic standing. It also has burnished the U’s reputation as a national rather than a regional university, putting it in better position to attract top research dollars and faculty.
That’s happened without shrinking the enrollment of undergrads from Minnesota, which is up by nearly 400 since 2007. Recruiting more students from outside this region has come largely at the expense of less-qualified students from reciprocity states — students who were a drag on the institution’s bottom line. Bringing in more nonresident undergrads has been a financial winner. Annual net revenue from non-Minnesota students is $100 million more this year than it was 10 years ago.
Contrary to critics’ claims, at no time was nonresident tuition set so low that it did not cover the full cost of instruction. This year’s tuition and fees total $14,488 for residents and reciprocity students, and $26,674 for nonresidents; the cost of instruction at the U’s various colleges this year ranges between $16,000 and $20,000.
Those are facts that university officials could have cited to resist pressure from a few vocal Republican legislators for higher nonresident tuition. Instead, the regents have yielded to those voices, adopting a 7 percent nonresident, nonreciprocity increase in 2015 (down from Kaler’s requested 15 percent) and a 12.5 percent increase last year.
Kaler characterizes another boost as a signal to the market of the quality of a University of Minnesota education. He also calls it an “experiment” that would be closely monitored “to see what the market will bear.” Already, the market has been responding. In 2016-17, nonresident enrollment dropped. When nonresident applications for 2017-18 fell, the university responded with additional financial aid, erasing some of the intended revenue gain.
Another big tuition hike could produce more unintended consequences. If the university were to enroll more Minnesotans to take the place of lost nonresident students, those students might come at the expense of the Minnesota State system, which is already suffering from enrollment declines. If it were to look to students from Wisconsin and the Dakotas to fill those seats, it would be looking at states where the number of high school graduates is forecast to be at a low ebb until the second half of the next decade — as is true in Minnesota itself.
It’s worth noting that the business-backed regional boosters at Greater MSP are working hard to attract young college-educated workers and to lure back native Minnesotans who left the state to study and stayed away. Others — including the U — are striving to ramp up the educational attainment of traditionally underserved homegrown populations.
Those worthy efforts should be combined with a move to attract able college students from other states and keep them in Minnesota after graduation. A smart human capital strategy for the next several decades needs all of those components. The regents should make sure their tuition policy works in concert with that strategy.