Expanded, New Services Partly Explain Escalation in Tuition Costs, Study Says
By Mark Walsh
Washington--The sharp escalation of college-tuition costs throughout the 1980s occurred in part because many institutions, faced with a decline in the size of their traditional market, chose "to compete not through lower prices but through expanded and improved facilities and services," a study released here last week suggests.
The "competitive pressure" felt by colleges scrambling to sustain enrollment has also prompted some institutions, chiefly in the private sector, to increase tuition in order to be perceived as equal in quality to nationally recognized schools, according to the report commissioned by the American Council on Education and the College Board.
"Large percentage increases in tuition have not been confined to a small group of expensive institutions," writes the author, Arthur M. Hauptman, a private educational consultant. "Instead, the pattern of rapid increases has been widespread, as institutions have tried to keep pace with the trendsetters."
For state institutions, the report notes, the largest increases occurred during the early 1980s, when state revenues dropped due to the economic recession. The increases moderated as the fiscal situation improved later in the decade.
The decrease in the number of 18- to 24-year-olds is a major "cross-cutting" factor in tuition increases that have significantly outstripped the inflation rate, the report concludes.
That demographic trend has brought a greater emphasis on recruitment and retention of students, it says, and led to higher spending on marketing, financial aid, and student-support services.
While a slight increase in the college-going rate among the traditional group and a jump in the number of older students have averted an enrollment decline, it notes, the leveling off of enrollment has raised the cost per student at most schools.
More Increases Foreseen
The decline in the traditional college-going age group will continue through the mid-1990s, suggesting "that college charges probably will continue to outpace inflation for the foreseeable future," predicts the 120-page report, entitled "The College Tuition Spiral."
From 1980 to 1987, it notes, tuition and fees increased at an average annual rate of 9.3 percent, while the Consumer Price Index was increasing at an average annual rate of 4.7 percent. The cumulative increase in college tuition and fees from 1980 to 1987 was 86 percent, while the cumulative change in the inflation rate was 37.9 percent.
The study rejects the charge made by former Secretary of Education William J. Bennett and others that many colleges raised tuition because they believed federal aid would take care of the increases.
Only about half of college students receive federal student aid, the report says, with many receiving only modest amounts. In addition, it observes, federal aid grew much faster in the 1970s than in the 1980s, yet tuition charges grew much more slowly during the 70s.
Controls in Virginia?
While most of the criticism of rising costs has been directed at private colleges and universities, the issue can be politically potent even for public institutions.
Last week, for example, Gov. L. Douglas Wilder of Virginia said he was seeking the authority to limit tuition increases at state schools.
The Governor has warned presidents of state institutions to cut costs rather than increase tuition for Virginia students. Under current law, tuition is set by the governing boards of those institutions.
Mr. Wilder said he would like the power to hold back state funds from institutions that exceeded his proposed tuition limits, which he set at 6.5 percent for most four-year schools and 7.5 percent for community colleges. The proposal is being considered by the legislature.
Copies of the ace-College Board report are available for $12.95 each from Macmillan Publishing Company, 866 Third Ave., New York, N.Y. 10022; telephone: (800) 323-7445.