Why public colleges cost so much

Tuition at public colleges and universities has more than tripled in the past 30 years.

By Karen Datko Mar 14, 2013 12:42PM

Image: Graduation cap (© Stockdisc/SuperStock)There was a time when those who wanted a solid and exceptionally affordable education headed off to a state university. Now, many states have cut their funding, and tuition has been rising -- a lot.

 

In fact, the College Board says (.pdf file) in-state tuition at public schools has more than tripled in the past 30 years.

 

"Over the 30 years from 1982‑83 to 2012‑13 . . . the increase for in-state students at public four-year institutions was 257%, from $2,423 to $8,655" in 2012 dollars, it said. The increase in tuition at private schools was a relatively modest 167%, from $10,901 to $29,056.

 

The Wall Street Journal reported disturbing news from a new study by the State Higher Education Executive Officers Association:

"The average amount that students at public colleges paid in tuition, after state and institutional grants and scholarships, climbed 8.3% last year, the biggest jump on record. . . .  

 

"The average state (and local) funding per student, meanwhile, fell by more than 9%, the steepest drop since the group began collecting the data in 1980."

The average per-student funding is now $5,896, according to the SHEEO report.

 

The figures are troubling even if you remove California, where a voter-approved tax hike prevented yet another substantial tuition increase and allowed schools to refund or credit this year's tuition hike. Sans the Golden State, net tuition rose 6.3% and per-student funding dropped 8%, the Journal said.

 

In fact, state funding has dropped so low in recent years that NPR wondered whether some public universities still qualify as public. State funding  is less than 10% of the overall budgets of the University of Virginia and the University of Colorado, NPR said. 

 

Why is this significant? More than 70% of postsecondary students attend public colleges and universities, the State Higher Education Executive Officers Association report says. That's the equivalent of 11.5 million full-time students -- a number that has grown by 12.4% in five years -- so lots of students are paying more.

 

Expect public schools to work harder to attract not in-staters, but instead more lucrative students from out of state, foreign students and those who can afford to pay the full price, says an article in Inside Higher Ed. For example, tuition at the University of Colorado is $9,482 for in-state students and $31,559 for those from somewhere else.

Tuition as a larger share of public university revenue has been a long time coming. "Over the past 25 years, the percentage of educational revenue supported by tuition has climbed steadily from 23.3% in 1987 to 47.0 % in 2012," said an SHEEO news release about the report (.pdf file).

 

The Great Recession and its aftermath just made things worse for cash-strapped state governments. And in some states, you also get the impression that lawmakers no longer consider higher education a priority.

 

All but two states cut per-student funding between 2007 and 2012 -- 30 by more than 20%, the report said. Federal stimulus money helped initially, but that was pretty much spent by 2012.

 

This sounds mighty depressing, particularly if you were counting on an affordable public education to prepare you for the post-recession economy without burying yourself in student loan debt. So keep a few things in mind:

 

Few students pay full price. The College Board says:

"In 2012‑13, full-time undergraduates at public four‑year institutions receive an estimated average of $5,750 in grant aid from all sources and federal tax benefits to help them pay the average $8,665 published tuition and fees. The students pay an average net price of just over $2,900."

Many schools are still affordable. The Huffington Post identified the 10 cheapest public schools in the country once grants and other aid were factored in. Kiplinger produces an annual list of best values among public colleges based on academic performance and affordability.

 

You have options, like attending a nearby community college for your first two years and then transferring to a bigger school. Or you can graduate in three years.

 

Keep in mind that blame for higher costs for students extends beyond state lawmakers. Says another Wall Street Journal story about rising tuition at public schools:

"A number of factors have helped to fuel the soaring cost of public colleges. Administrative costs have soared nationwide, and many administrators have secured big pay increases .... Teaching loads have declined for tenured faculty at many schools, adding to costs. Between 2001 and 2011, the Department of Education says, the number of managers at U.S. colleges and universities grew 50% faster than the number of instructors. What's more, schools have spent liberally on fancier dorms, dining halls and gyms to compete for students."

Has a greater tuition burden caused you or someone in your family to rethink your college plans?

 

More from MSN Money:

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9Comments
Mar 15, 2013 11:08AM
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When a basketball coach makes three million a year, it's time to drop sports and make college about learning things like, greed, pay offs, fraud, money scamming, illegal recruiting, wife swapping, drug dealing, gang membership, and all the thinks that coaches do.  It's all about good old boys, making money for the team and their own bank accounts. Nothing to do with education or higher learning for these young money making machines. It's not about how smart you are it's about how much money can you make for the coach.         
Mar 17, 2013 9:08PM
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Just say no to paying these ridiculous prices, go to a trade school, and actually LEARN how to do something, instead of spending so much money to learn nothing.
Jul 15, 2013 11:02AM
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This whole frican country has gone down the toilet. Why is it Canada and Europe can provide their citizens with very low cost college education while in this country the cost grows exponentially year after year? Colleges and universities in this country pay zero in taxes. They are some of the richest institutions in the world. The people at the top in government and in the private sector are able to pass legislation in their favor to fill their bank accounts while we the people have to bend over and take it where the sun doesn't shine. There is no excuse for sacrificing the future of our country for the benefit of a wealthy few. Now I am by no means a socialist, but the greed and corruption has gotten so out of control that I don't know what the future holds. Our system of government is broken. It has failed because of lobbying and no term limits for career politicians who just cater to the corporations who contribute to their campaigns.History shows us that every empire falls, and just like the British empire in the 19th century,the Romans etc., America is going down fast. Mark my words, within a decade or two this will be a third world country. What a god damn disgrace.
Mar 15, 2013 12:11PM
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Has anyone really looked at the pension system that the universities provide. Not really talked about.... Some have  a system for 401-Ks that has matching that goes something like this. You put in a dollar and they - the university put in three or four.  While average teachers and workers in Michigan are getting lower wages, losing benefits, and lsoing defined benefit plans the universities which the state supports are being very generous, which is their choice, but are these cost controls...... 

Jul 15, 2013 6:03AM
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When I attended an out of state university the decision was  based on its academic reputation + what I could afford. Parents only kicked in room and board as in dorm living.

 

Based on the above info, colleges are now touting fancier facilities rather than top class academics and it appears that greed has also overtaken salaries and benefits. Funny how many rail against upper level corporate management pay yet have no problem with university pay structures and the effect it has on affordable education.

Jul 15, 2013 10:53AM
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Notice they never tell you exactly why tuition is outpacing inflation?  They blame the states giving less money to the schools, which des not account for the rapid cost hikes, not at all.  My sister is a Professor at a major NE University.  She is sickened by the robbery not only her institution is pulling, but all public Universities are doing.  Where tenured Professor's hardly ever teach, they try to get published, to hell with teaching students.  Universities and their ilk are raping today's youth big time.  Million dollar sports Coaches, absurd retirement packages for staff and teachers.  Notice the POTUS never holds "academics" responsible for a damn thing, he ALWAYS gives them a pass.  The biggest lie in this country is "we don't spend enough on education".  BS. 
Jul 15, 2013 8:33AM
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I work at a college and it is amazing what it costs students these days. When I went to college in the mid- to late-1970s, the tuition at a well-known state university, in-state, was $194 per semester for all the classes one wanted to take. That is basically $400/year and there were no fees tacked on.... That is not the case these days for the reasons stated in the article.

Jul 15, 2013 9:16AM
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We need to remind these people with their obscene pay and pension benefits that they are civil servants and should act and be paid as such. Most of these teachers would probably not be good enough to be hired by private universities. Even though the cost of a private institution is about 1/4 the cost of a private university, that is still too much for the average student to afford.
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