ARCHIVES :: SEPTEMBER 2002 :: YOUR MONEY

State Schools
Raise Tuition
As Government Budgets Tighten,
Fees Go Up--Especially for Freshmen

By Anne Marie Chaker
Staff Reporter of The Wall Street Journal

State colleges and universities, long a terrific bargain, are instituting tuition increases as high as 25% this coming school year to make ends meet.

With more than 40 states grappling with budget shortfalls, legislators are targeting higher education for big cuts. At the same time, universities are struggling to cover rising costs in such areas as energy and health care. Administrators and trustees see raising tuition as the easiest way to make up any shortfall.

The increases are affecting some of the most popular state schools. At Ohio State, this year's freshmen are paying 19% more than last year's incoming students. The University of Kansas is charging 25% more than last fall, $1,460, up from $1,166. The University of Illinois had hoped to raise tuition anywhere from 3% to 5%. But socked with a $73 million budget cut, it's aiming at a 10% increase -- and freshman have to pay an extra $1,000 fee. The University of Washington and Washington State announced 16% increases -- a year after saying the rise would be 6%.

"I planned on that" 6%, says James McMahan, a student at Washington State. "I don't know of anything that jumps an additional 10% in a year."

Two-Tier System

Other steep tuition increases in public higher education have typically been imposed during similar periods of economic weakness, when students and their families are often least able to pay.

Some states are coming up with innovative ways to spread the pain. Ohio State has imposed what it dubs a "two-tier increase" -- incoming freshmen will pay more than returning students. That means a rise of 19%, or $903, for new in-state students, while returning students face a 9% increase.

Eddie Pauline, the undergraduate student government president, supports the increase. "Ohio State is at risk of becoming a second-rate institution if we don't see income coming from somewhere," he says. But Stacy Williams, entering her junior year, would rather see a few repairs go undone. During the school year, Ms. Williams works 30 hours a week to help pay college bills. With the new increases, she expects her parents will have to send her younger sister to a local community college before transferring her to a pricier state school for her junior year.

Indeed, some experts expect more students to forgo public four-year universities in favor of less-expensive community colleges -- and hope to transfer after two years. But Travis Reindl, a policy analyst at the American Association of State Colleges and Universities, warns that such a strategy may end up costing more than families expect because some four-year universities might not honor some of the credits earned at the two-year school.

Crushing Debt Load

The increases affect a huge number of students. State schools enroll about 80% of higher-education students, and the tuition increases will put even more financial pressure on students. The percentage of seniors graduating with more than $20,000 in debt rose to 33% in 1999-2000 from 5% in 1992-93.

Some administrators feel that, while raising fees can be painful, it's better than making cuts in programs.

But not all states see tuition increases as the solution. In New York, despite a roughly $7 billion deficit, legislators have kept budget levels at the State University of New York the same as last year, so in-state tuition won't rise. "The easy way to solve budget problems is to put it on students who aren't as potent a political force as they should be," says state Rep. Edward C. Sullivan, head of the Assembly's higher-education committee. "New York, to its credit, has chosen not to do that."