New report analyzes factors for rising tuition

A new report released by the national public policy organization, Demos, uses national data to explain the primary causes for tuition increases in the past 10-15 years. There is no shortage of pundits attempting to explain the rise in tuition.  Is it administrative bloat? Increased spending on construction? Decreased state support?

The report argues more than three-quarters of tuition increases are due to the decrease in state funding support for higher education. The report also addresses several other familiar explanations for increases in higher education tuition, using data to counter those perceptions.

The Cause of Rising Tuition (

Administrative “bloat”?

Generally defined as spending beyond the core mission of a college or university, the report states “the number of employees per thousand students changed little between 1991 and 2011.” Further, the report says the relative number of full-time faculty has “remained approximately constant” and the number of executives and administrators has slightly decreased relative to the size of the student body.

As in the private sector, health care costs are a primary factor in increases of administrative costs at US public colleges and universities – increasing more than 60% between 2000 and 2013 when adjusted for inflation.

In addition to health insurance costs, a recent report by the American Council on Education estimates the cost of meeting federally mandated reporting has increased 56% between 1997 and 2012. This report argues that federal oversight of higher education has become costly and complex due to an ever-growing list of federal mandates with which universities and colleges must comply.

Increased spending on construction?

While the amount of spending on construction for auxiliary services at college campuses have increased significantly in the past decade, Demos authors argue increased borrowing to fund college construction could account for about 5 percent of the tuition increases over the past decade.

In Utah, physical capacity availability at public colleges and universities are a major challenge. Since 2000, student enrollments have increased the equivalent of the current student bodies at Utah State University and Weber State University combined (51,286 students). By 2021, student growth at USHE institutions will exceed the current student body at the University of Utah. Such growth is projected to require more than 200,000 new square feet of instruction space to meet the projected capacity needs. This is in addition to current replacement and renovation needs for outdated and dilapidated facilities.

The efficient use of physical facilities is being further optimized, thanks to technology, as students enrolled in online and hybrid courses have grown twenty-fold since 2011.  However, more than 85% of students taking an online courses in Fall 2015 took a majority of their college courses on-campus. Despite availability of online courses/degrees, students prefer using online courses to augment a traditional on-campus schedule.

Decreased state support?

State support for higher education has been decreasing for the past two decades. Because education and related expenses are funded nearly entirely by tuition and state dollars, declining state support has caused a dramatic shift in the share of these expenses paid for by students and the state. Since 2000, state funding for higher education has decreased 20% on a per student basis, when adjusted for inflation. According to this new report, along with data recently published by the State Higher Education Executive Officers association (SHEEO), the combined increases in health care costs and decreases in state support are two of the primary factors that have caused tuition rates to increase at Utah’s public colleges and universities since 2000.

Even though tuition rates at Utah’s public colleges and universities are the third lowest in the nation for a 4-year degree, higher education leaders are keenly aware of the financial pressures being placed on students.  In March, the Board of Regents, with support of the USHE institutional presidents, approved an average system-wide tuition increase of 3.06 percent for the 2015-16 academic year—the lowest average increase since 1999. Along with this commitment from public higher education leaders, continued state funding also plays a  critical role in helping keep tuition affordable in Utah.


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