News: State Policy & Advocacy

New Resources Highlight Complex Nature of States' College Costs

Tuesday, March 6, 2018  
Posted by: Jack Porter, Advocacy Associate
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Two reports from last month take a deep dive into the current state of higher education finance, each offering applicable insight for our members.

First, the Urban Institute examines the strength of the link between tuition increases and state divestment in higher education. Second, Demos’ “The Unaffordable Era: A 50-State Look at Rising College Prices and the New American Student” delivers readers an in-depth analysis of college costs in each state, and points out for whom the system is and is not working. Both of these pieces provide quality data for NCAN members when referencing the current state of college affordability and all that impacts their students.

There has long been debate within the higher education community about the extent to which there is a direct correlation between funding cuts in higher education at the state level, and tuition increases. The Urban Institute report concludes, “both evidence and logic suggest that declines in state funding are only one of a number of factors that may influence price increases.”

The writers hone in on alternative means by which college and universities have made up for the lost revenue from their state government, aside from increasing tuition. These include enrolling more out-of-state students (who pay a higher tuition rate than their in-state peers) and cutting expenditures within institutional budgets.

These practices are harmful to our students on two fronts: institutions enrolling increasing numbers of out-of-state students can “crowd out” students seeking admission into the most affordable, in-state options, and cutting supplemental services can deprive them of the support they need to reach graduation day.

Furthermore, the report points out that these reactionary decisions are made on a case-by-case basis, and there is no fair way to nationalize this conversation. Alternative and equal means to increasing revenue are not available to all institutions, even those in the same class and state. Rather, these choices largely are based upon an institution’s current position in the market.

While largely echoing the stance of the Urban Institute report with regard to the correlation between state appropriations and tuition rates and highlighting trends in cost, the Demos study opens with a compelling economic argument for public investment and identifies systemic inequities facing students and families.

Demos conveys the benefits felt at the local, state, and national level when a sufficient level of public funding is invested in higher education. Highlighted data from 2012 make this point: Individual states saw a return on investment of $3 to $4 for every dollar put toward public colleges and universities.

The report shows that in each state besides Wyoming, there has been an increase in the cost covered by students since 2001. Moreover, some states call upon students to cover a vast majority of the financial burden – for example, a potentially bank-breaking 86 percent in Vermont.

Additionally, Demos demonstrates that these costs are disproportionately affecting students of color. Examining the average net price of four-year colleges as a share of median income across the United States, the report finds this figure is 32.9 percent for black students, as opposed to 19.6 percent for white students. 

NCAN will soon release a brief that builds off our recent analysis providing a state-level overview of college affordability.