States Tackle Rising Tuition Rates

By Sarah Pingel
Postsecondary education is expensive and students are paying more and more for college each year. Amid concerns about rising tuition, state legislatures have become increasingly active in tuition policy even though there’s only one state legislature—Florida’s—that has the authority to set tuition in the four-year sector and two legislatures—Florida’s and California’s—that havethe authority to do so for two-year institutions. In most states, legislatures have adopted statutes that grant the authority to set tuition to campus- or system-level boards.

“Our legislative tracking indicates that states aren’t trying to gain or regain the responsibility to set tuition rates—but that doesn’t mean we aren’t seeing an increase in concern about rising tuition among our commissioners,” said Jeremy Anderson, president of the Education Commission of the States. “Instead, recent state sessions have produced a new set of policy ideas that take indirect aim at controlling tuition rates.”

Anderson highlighted bills from California, Illinois, Louisiana, Minnesota and Virginia, which proposed ideas ranging from setting variable tuition rates by areas of study, to a rebate of state appropriations directly applied to student bills, to controlling non-resident tuition revenue streams. 

Capping or freezing tuition, the most common solution surfacing in statehouses, is also losingpromise as a viable option for tuition control. Research from Illinois, where state law requires that public, four-year institutions set the same tuition price for a student for four consecutive years, demonstrates possible shortcomings of the approach.

Under the policy, growth in both tuition and student fees have outpaced the growth among peer institutions in other states, negatively impacting affordability for all students. Perhaps counterintuitively, it seems that the freeze is making college more expensive, quite possibly because institutions raise tuition and fees more for each incoming class than they might have otherwise. The breadth of policy ideas when it comes to tuition-setting seems to be wide; however, the possibility of enacting meaningful tuition reform is much narrower.

Recognition that increases in tuition are happening against a backdrop of decreasing state appropriations to higher education coupled with relatively flat investments in state financial aid programs nationwide is lacking. As with any state system, higher education requires resources. The prevailing preference across the country has been to seek these resources from tuition revenue in place of robust state appropriations and targeted financial aid. A promising strategy to reverse the trend is to restore public support for higher education.

The state of Washington provides a useful example. After freezing tuition in 2013, the state made it possible for institutions to not just freeze but reduce tuition through an increase in direct appropriations in 2015. The 2017 budget redirected the funds enabling lower tuition to fulfill a court order to fully fund K-12 education, leading to an anticipated tuition increase for students enrolling next fall. While short-lived, this example illustrates that state support to postsecondary institutions can in fact have a direct impact on the tuition costs students face.

Policy leaders’ concerns about rising tuition are well-placed; however, as with many areas of policy, proven solutions cost money.

“Balancing whether the resources for public higher education come from higher education institutions in the form of losses in instruction and services, from students paying higher tuition, or from legislatures providing increased appropriations will certainly play out differently in jurisdictions across the country,” Anderson said. “At the same time, all states can benefit from an increased understanding of how their policy architecture and funding decisions ultimately impact the tuition prices that students pay. Education Commission of the States is committed to supporting states in advancing effective college affordability policy, both through our research and reports, and through convenings and personalized counsel.”

About the Author

Sarah Pingel joined the Education Commission of the States in February 2014. Pingel supports states by providing analysis tailored to student financial aid and college affordability policies. A data wonk at heart, she also prepares research, authors reports and organizes convenings designed to help policy leaders learn from one another. Prior to working at Education Commission of the States, Pingel held various positions within three institutional financial aid offices. She holds a bachelor’s degree from the University of Colorado, Boulder, a master’s degree from Bryn Mawr College and a doctorate in higher education from the University of Denver.