SADOW: If You Want To Help Higher Ed, You’ve Got To Raise Tuition

As debate launches about the appropriate funding mix for Louisiana higher education and discussion occurs about reforming free taxpayer-funded rides for its students prior to the upcoming regular session of the Legislature, usually lost in it all is the fact that Louisiana undercharges these users both in relative and absolute terms, with deleterious effects.

Over the past several years, with legislative countenance to make the process easier, rising tuition (and the addition of a small amount of fees or their increases) by the state’s higher education institutions have changed significantly the role that user charges have played in funding this enterprise. In the fiscal year that encompassed the first six months of Gov. Bobby Jindal’s initial term in office, tuition and self-generated fees paid for 26.3 percent of the $2.814 billion spent. In this fiscal year, it’s budgeted to pay for 48.7 percent of $2.629 billion. By way of example, this means over this period that resident tuition and fees at my institution have gone up for a full 12+-hour load per semester from $1,667.40 to $2,471.64, a hike of almost 50 percent.

Critics of Jindal’s budgeting and legislative acquiescence of it claim this presents an unacceptable barrier to access for cash-strapped households, and decry that the state’s contribution, directly or indirectly, has gone down hundreds of millions of dollars as a result. But such a view fails to understand that reductions seem so stark only because the state has historically so generously subsidized students – to the detriment of the system and possibly to the students themselves.

In comparative perspective, Louisiana remains a higher education bargain. For 2011-12, Louisiana ranked second-lowest in the Southern region, and fourth-lowest in the country for median undergraduate resident full-time tuition. It has gone up 20 percent since, but other states have been raising theirs as well so if the state has gone past any others, it can’t have been too many of them. Nor does that impose much of a relative burden on state households: measuring these figures in terms of median tuition to median household income, Louisiana ranks only 35th highest among states at about 12.5 percent. And this does not take into account that about a fifth of all students get their tuition paid for by the Taylor Opportunity Program for Scholars (and is becoming of increasing concern to policy-makers precisely because rising tuition gets passed along to the state in this form), which would lower the relative burden further.

Finally, as recently noted in a report about financial security, Louisiana has the third best outcome of any state when it comes to students graduating from four-year colleges with debt, underscoring the bargain that tuition and fees are in the state. Thus, not only does low tuition and fees cost relatively less than most places for households, debt accumulated in the process is almost the lowest.

This relatively light financial burden indicates, if anything, that users of higher education are not paying their fair share relative to taxpayers of the costs of higher education. Raising this proportion also would produce a continued salutary effect: because own resources become more invested in obtaining higher education, this increases incentives for students to take more seriously their studies and achieve better. In turn, this would help more efficient use of higher education resources, as fewer marginal students would think higher education should be pursued, and more serious students would strive harder and faster to complete degrees. More efficient use helps both taxpayers and institutions to stretch dollars further to reach more students more satisfactorily.

If anything, because of the fairness issue for taxpayers and the beneficial impact on learning it would have, the share of Louisiana higher education, through continued increases in tuition until it reaches a level commensurate to a realistic ability-to-pay and adequate return on investment level, coming from self-generated resources by higher education should continue to rise. The over-subsidization of taxpayers to students, a legacy of the state’s populist political culture, has more than anything held back excellence in Louisiana higher education.

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