One path forward for public higher education: ending in-state tuition discounts

American public universities traditionally offer two very different prices for students: one for those coming from other states, and a much cheaper one for those who live in-state.  Is it possible to consider another model, a scenario where campuses end in-state discounts?

Looking down at State College from the air

State College from above.

Jan Murphy argues, provocatively, that Pennsylvania might be about to experiment with such an approach.  It might not be deliberate, but the outcome of intense state budget battles.  Harrisburg is behind schedule and still fighting over finances. Penn State is already under the gun, and might take an unusual step over the next few months:

“We feel the threat is truly there that unlike in previous years, we might not get funded at all,” said Zack Moore, Penn State’s vice president for government and community relations. “We set our budget in July with the assumption that we were going to get a certain amount of funding from the state. For them to potentially not follow through on that really puts us in a bind and has us incredibly nervous.”

It has Penn State contemplating the possibility of raising tuition as early as the spring semester. (emphases added)

Which would be rough, especially for the poorest students.  But it’s small potatoes compared to what else is on offer.  If the state can’t provide funding in time, perhaps public universities will have to break with history and their public mission.  Imagine this scenario: “Zack Moore, Penn State’s vice president for government and community relations…

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said without a state appropriation, he can’t imagine Penn State would continue to differentiate its tuition for in-state and out-of-state students.”  More:

Without any revenue from the state to fund Penn State, Pitt, Temple and Lincoln universities, officials from three of the four universities say they will be forced to end the tuition discount they offer to Pennsylvania students. At Penn State, for example, that tuition reduction saves students about $10,500, university officials say.

This sounds like provocation, pitching a negative scenario in order to goad Harrisburg into actually committing funding.

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  But the idea is out there, and at least one leading state politician thinks such a model is feasible:

Senate Majority Leader Jake Corman, R-Centre County, called the potential divestiture of the four state-related institutions “a profound policy decision that I think will have significant consequences the people of Pennsylvania will not enjoy.” [and yet…]

Although the flagship campus of Penn State sits in his district, he said he isn’t worried about the economic impact of not providing state funding to the university would have on that region. Students will still attend University Park but they might be wealthier or come from out of state or other countries.

Is this even possible?

It might be.  In a sense, public universities and colleges across the country have been doing a version of this for years.  It is well known that they already seek out non-local students because of their higher payments, among other reasons.   As Aaron Renn recently observed,

Foreign students from places like China are now aggressively recruited to universities like Illinois, in part because they are paying very high rack rates with cash. Indiana University, my alma mater, was largely populated with working and middle class Hoosiers and some Chicago suburbanites when I went there. Today it has a much more upscale vibe and has become a destination for East Coast kids who can’t get into the Ivies.

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(“From Bloomingdale’s to Bloomington” as the Journal once quipped).

Indeed, this strategy is so strongly conducted that several state legislatures (California comes to mind) have fought with their universities to get them to recruit more in-state students for political, not economic reasons.

Moreover, as Chris Newfield and others have amply documented, American states have gradually reduced their per-student support to higher education over the past generation.  This defunding has helped drive that aggressive recruitment of out-of-state students.  Campuses seeing themselves as being involuntarily privatized might have to think seriously about acting as if they were private, and market themselves accordingly.  Alternatively, states might have to zero out funding, as Mike Richichi remarks.

For some the freedom to recruit without geographic restriction could let them pursue an upscaling strategy, going after students with higher test scores.  Jon Marcus points to such a desire within midwestern publics.

If one state alone did this, its non-rich students would either have to expand their borrowing, or seek out alternative colleges and universities.  Community colleges might see a new student influx.  Other students could send themselves to other states’ schools, either in person or online.

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  Indeed, this could further boost online learning numbers.

If a plurality of states follow this scenario, I could imagine average tuition going up (even further) nationwide.  Perhaps states will diverge between pro- and non-local student support.  Inter-state recruitment efforts will surely rise.

Some state governments might oppose this model, and seek legislative means to compel universities to focus on local students, with or without sufficient funding.  Campuses might decided to go independent at this point and jettison their public identity.

At a conceptual level, a scenario wherein public universities end in-state tuition breaks would represent a furthering of the belief that education is a private, not public good.  It would indicate another tick forward for neoliberalism’s progress.  Resisting this model might imply the opposite, the old idea that post-secondary education is a common good, benefitting the entire population.

Perhaps we’ll see a reshuffling of the overall stratification of American higher ed, with formerly public universities joining private institutions, separated from the world of community colleges.

Is any of this possible?

(thanks to Jeff Selingo and Steven Kaye)

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9 Responses to One path forward for public higher education: ending in-state tuition discounts

  1. laurion says:

    U. Maine is going the opposite direction – actively discounting its out of state tuition rates to draw in more students, but aggressively keeping its in state rates low.
    This ties into your trendlines on the diminishing numbers of students in general, and a state like Maine can do very well by ‘stealing’ students from nearby states with higher populations and higher expenses. In the audio version of the WBUR piece they have a quote about how bringing students to Maine also means some might stick around after college and help the overall economy.

  2. VanessaVaile says:

    Reblogged this on As the Adjunctiverse Turns and commented:
    Dear adjuncts and other Gastarbeiter in the groves of academe, as higher goes or not, so do we. The more we know/understand about what’s going on the better — even it’s not what we want to hear.

  3. Tom Haymes says:

    Here’s an interesting question: What’s the purpose of state funding of public universities? Is it a direct investment in tuition for the children of the taxpayers? Or is it an investment in the future wellbeing of the state? If it is the former, then the argument that children of taxpayers should get a discount relative to out of state applicant holds. If it is the latter, then the question becomes what percentage of out-of-state students state in the state after graduation and work there versus return to their own states or countries. Do you have that data? How about for in-state recipients of the benefit? Are they more or less likely to move away after college? (Anecdotally, I went to the University of Texas and, after a brief sojourn for grad school in DC/Northern Virginia, I returned here and work here to this day.)

    This raises some of the questions that Chris Newfield raises in terms of the direct connection between school and a job. If student —> college —> job is the sine qua non of this question then sure, you need to look at it as an individual investment. If, however, the number of college graduates living in a state lead to collective goods that benefit the entire society (lower crime, greater innovation and investment, etc. – and there is data to support that), then I could see an argument to extending lower tuition to everyone.

  4. actualham says:

    What a complete tragedy to see the way that states compete with each other to lure each other’s students to cross state lines to go to college. The colossal waste of advertising dollars alone could go a long way to offsetting the costs of rising tuition. I have to think that despite the lion’s share of the blame going to legislators who dupe their constituents into thinking that voting against public funding of higher ed is in their best interest (and the lobbyists who push corporate interest ahead of the public good– was just hearing a terrible story from a colleague last night about Oklahoma and what big oil has done to their college funding this year), we in public higher ed have failed miserably at making a case for public funding, and behaving in a manner consistent with a public, sustainable infrastructure. At my college (and all colleges), we have a ready list of what we call “competitor institutions” which include sister institutions in my own state system. This kind of privatizing language and poaching-oriented strategy has tacitly bestowed our consent for the reduction of public support, and ensured that tuition hikes and austerity measures are going to be our only options. I am convinced that bright, charismatic higher ed leaders with clear messaging could turn this around; but where are they? We better get it together fast, before this is beyond repair.

    • Thank you for an excellent comment, Robin.

      Your point about advertising dollars reminds me of how much pharma spends on marketing, and what price savings we could realize without that.

      Turning this around: very hard. We really hate collaborating with each other, and there are all kinds of incentives for that.
      Are there organizations which might help?

  5. Tom Haymes says:

    To follow up on my earlier comment: There is also an argument to be made that concentrations of university talent nurture innovation and economic growth in an area. Look at Stanford’s impact on Silicon Valley, UT’s impact on Austin, and the impact of MIT, Harvard, etc. on the innovation zone around Boston.

    I certainly saw that happen in Austin, which has transformed from the sleepy college/part-time government town of my college days in the 80s into a dynamic driver of Texas’s innovation economy today. Again, if colleges and universities can be a motor for attracting and nurturing talent in an area, questions of tuition need to take a backseat to the benefit to the community and it is in the self-interest of that community to incentivize the best and brightest to come, study, and then live in the area.

    Perhaps the solution is to incentivize people to stay. Give them a state-sponsored, zero interest, zero payment loan that is forgiven if the recipient stays in the state for 5 or 10 years after graduation. That loan would equal the difference in cost between out-of-state and in-state tuition. If they move away to get a better job that’s part of their costs since they would have to pay back the difference in some measure.

    • An excellent argument.
      And we do see some states trying to build along those lines. A few years ago New York set up tax-free enterprise zones around SUNY campuses.

      However, this still might fail to persuade legislators.
      They could make the case that medical investment (Medicare, Medicaid spending, depending on the state) has a similar, if not greater economic benefit. Ditto the penal system, and also infrastructure. These are all Keynesian goods.

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