Enjoy Tuition Freezes While You Can. They Won’t Last.

Citing $53 million in additional state support for higher education this year, the boards of Virginia’s public colleges and universities have decided to keep tuition flat for in-state undergraduate students in the upcoming academic year — the first such freeze in nearly two decades, reports the Washington Post.

James Toscano, president of Partners for College Affordability and Public Trust, paints the freeze as a “significant victory for students and families in Virginia.” As state revenue flows have recovered in states across the country, legislatures are once again investing in higher education. Meanwhile, public institutions recognize that consumers “have reached a pain point that is greater than they can bear.”

Any moderation in higher-ed tuition increases is welcome, for whatever reason and from whatever source. But I am less sanguine than Toscano. I feel certain for two reasons that the cost of attendance will shortly resume its rise. First, the General Assembly is unlikely to sustain $50+ million increases in state support year after year. Between competing demands from other core state responsibilities and the inevitability of an economic downturn at some point in the not-so-distant future, the legislature will be hard-pressed to match this year’s generosity. Second, there is no sign that Virginia’s public institutions have done anything to quell the underlying inflationary forces driving up costs.

I interpret the decisions of Virginia’s governing boards as political, designed to reward the General Assembly for ponying up the extra funds this year and also to undercut those who would cap tuition increases or otherwise hamper the institutions’ autonomy.

The new-found moderation among all public institutions, which was surely a coordinated action, also occurs against a backdrop of declining college enrollments nationally. Nationally, overall enrollment at colleges and universities fell 1.7% this year, or by 300,000 students. Price competition between colleges and universities is heating up.

Community colleges, for-profit colleges and small private colleges have lost the most students, while elite institutions continue to maintain strong enrollments. State subsidies give public colleges and universities an enormous advantage in pricing their tuition and offering financial assistance.

As the Wall Street Journal noted yesterday, Virginia Tech was caught off-guard when far more students enrolled this fall than expected. The universities now is offering financial incentives — funding for community college, gap years, internships, and summer sessions — to some 1,500 freshmen to delay their enrollment and avoid overcrowding. The move comes after a “historic” yield rate that led to about 8,000 students accepting offers from the school, far above the target size of between 6,600 and 6,700 students, he said.

But I have seen no evidence that Virginia’s public colleges have done anything to alter their cost structures. Are they shrinking administrative staff? Are they curtailing sabbaticals or asking tenured faculty and star professors to teach more classes? Are they reducing their commitment to college athletics? Are they rolling back ambitious building programs? Are they trimming departments with declining enrollment? Are they systematically exploring ways to harness computer-aided education and distance learning to increase productivity and quality? If so, they’ve been tight-lipped about their accomplishments.

Ultimately, the cost problem in higher education is a productivity problem. Until they solve the productivity problem, tuition freezes will be short-lived.

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8 responses to “Enjoy Tuition Freezes While You Can. They Won’t Last.”

  1. Steve Haner Avatar
    Steve Haner

    Another county heard from. https://www.baconsrebellion.com/tuition-monster-tamed-dont-relax-just-yet/ At the time I wrote that I was somewhat unsure this would be accepted by all the schools, but it seems its done.

    The General Assembly has the authority to keep this pressure up, but the question is whether it will have the political will…For the time being, however, this is a pretty good political talking point for the House Republicans. It was in the budget and had bi-partisan support, but the House R’s have done a good job of grabbing the lion’s share of the credit. But what matters for all the candidates is – what will you do next? Will you repeat this? Simply put a cap in the law on increases? Or move on to something else and let this explode again? The problem with success is then you have to do it again.

  2. LarrytheG Avatar

    I’m not sure one can say that the GA can “keep the pressure up”, when basically they folded and threw more money at the problem – AND as GOP – boast that they did a fiscally conservative thing.. but of course these days – up is down and vice versa when it comes to politics and claiming Bona Fides.

    Heckfire, we cut taxes without cutting spending – balloon the deficit – and take credit for being fiscally responsible… so yes.. throwing money at the tuition problem and “threatening” more… geeze

  3. TooManyTaxes Avatar

    Higher education needs to clean house. Administrative staff needs to be cut just like it’s cut in corporations. Functions that can be outsourced for less need to be outsourced and in-house positions eliminated. Full-time faculty need to perform at levels imposed in the past. Both teaching and research requirements need to be increased. Faculty meeting requirements would be allowed to do outside consulting. Those who don’t meet standards should not be allowed to consult.

    1. LarrytheG Avatar

      I don’t think folks on the outside looking in – can determine what administrative staff or other positions are “needed” or not – any more for Universities than Walmart.

      We suspect featherbedding and there may actually be some but we don’t know _hit from shinola in terms of what positions are really needed and which ones can be cut.

      Ultimately that cannot be determined by folks outside the organization any more than a blind man swinging a machete.

      We cannot and should not determine what research should be done or not nor what academic courses should be offered or not – as much as we think we can.

      I keep saying – state aid should go to students in the form of vouchers and let the students pick and that will engender competition for price and quality.

      Lay people really don’t understand higher education any more than they understand health care or Transportation. It’s frustrating but there’s a reason why those things are called professions.

      It would be like a lay person telling TMT how to do his work when they have no clue what the actual work entails.

      1. TooManyTaxes Avatar

        Why would anyone think that employees of an institution would conclude that they are unnecessary, the functions performed are ineffective or redundant, or too expensive?

        Fairfax County’s latest lines of business review conducted largely by county employees not only concluded that every service, function and employee was necessary but also that more service, functions and employees should be added. Of course, input from current employees is needed to make right-sizing decisions but the impetus to cut must come from top management/elected officials or other outsiders like taxpayers.

        We need to downsize government jobs and force more efficiency and effectiveness.

  4. Jim,

    Thanks for your continuing coverage of college affordability.

    According to SHEEO between 2012 and 2017 Virginia spent (adjusting for cpi) almost $1,300 more per student. So, while the state was spending more money, the institutions continued jacking up the prices – a true ‘have their cake and eat it too’ scenario. And to cloud reality, insiders managed to create a dominating narrative that “disinvestment” was the lone culprit for rising prices.

    As I point out, additional state spending on higher education was already happening for a prolonged period, but for various reasons most people didn’t notice and weren’t talking about it. In my opinion, additional state spending for higher education in Virginia and across the country is likely to continue unless we experience a significant downturn in the economy.

    To me, the tuition freeze in Virginia is significant for 2 big reasons: 1) this is $50M in real money Virginians won’t pay out of pocket they otherwise would have owed in the form of tuition and fees and 2) the state policy conversation has shifted.

    In the last two years, I heard a thousand reasons from insiders why the price curve couldn’t possibly be bent after years of poor trendlines. Well, this year political leaders were properly motivated and prioritized consumers over all else and found a way to quell the institutions’ biggest objections. And here we are.

    I agree with you, Jim – this action does almost nothing to solve the underlying problem of rising institutional costs. I would have preferred it.

    And as I said in the Virginia Mercury earlier this week, that should be next. Requiring price constraint for additional funds (the institutions were getting anyway) is a logical – and pro-consumer – condition and a good first step to making college more affordable. But as I said in the article, there should be other conditions, such as how institutions spend that money and efficiency measures.

  5. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Money is a big problem, but it pales besides the poison taught to our students in our colleges and universities. This is more amazing than the passive acceptance of Americans and their leaders of unjustified sky rocketing costs of a college education that do no more than line the pockets of college administrators and professors who do not teach. It is incrediable that Americans and their leaders have no idea what their students are being taught or not taught in Colleges and universities. You would think that Americans and their leaders could care less about what is really happening in higher education. And if you thought that, you would probably be right. Meanwhile, most all Americans who have any interest at all in higher education at our colleges and universities, are interested only in scores of favorite college football and basketball teams.

  6. LarrytheG Avatar

    re: ” To me, the tuition freeze in Virginia is significant for 2 big reasons: 1) this is $50M in real money Virginians won’t pay out of pocket they otherwise would have owed in the form of tuition and fees ”

    Well geeze, it IS coming out of TAXPAYERS pockets INSTEAD!

    If our choice is higher prices for tuition or higher taxes for taxpayers but in the end – the cost still goes up – why is the taxpayer funding “better” and more important -is that what we expect to do in the future?

    In a real market, people decide how much they want to pay for a product and when we substitute govt subsidies for that product – we basically relieve Higher Ed from having to trim costs themselves and when govt steps in to pay – what we’ve actually done is buy a “pause” that will cease in the follow on years unless taxpayers continue and increase the subsidies.

    This is not a sustainable path. This will not cause the Universities to manage costs – it will encourage them to operate as if they actually don’t have to do that.

    To give an example. The govt ALSO subsidizes health care but they do NOT pay the MSRP – they pay less – they reimburse less that the actual “charge” on a per item basis.

    What we’re doing with the Universities is we’re giving them an unrestricted pot of money, no strings attached, essentially a bribe from taxpayers to “keep prices low”.

    The only thing worse than that would be the idea that the Govt should try to dictate prices arbitrarily (which I realize is sorta what they do with health care reimbursements).

    What really surprises me is that this whole approach either subsidies or price controls is supposed to be an anathema to those who claim to be fiscal conservatives and who say they believe that demand will drop when prices go too high, and these same guys turn around and give taxpayer subsidies for a “pause” in the increases. Lord!

    You’d think that in Virginia – with GOP control of the GA that this approach would be frowned on but these days it’s more virtue signaling about fiscal conservatism than actual.

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