Fed Gov't Wants to Track Colleges' Tuition

Parents Forum
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<p>Anyone else see this? Apparently the Dept. of Education is pushing for a rule that would require all colleges/universities that receive government subsidized financial aid to turn in an annual report on any rise in the price of their tuition. Rises bigger than the cost of inflation would have to be explained. I'm sure some will say this is just big government interferring again, but I myself would be very curious to see how colleges justify annual tuition increases way over the rate of inflation. Any thoughts?</p>

<p>Here's the link:</p>

<p><a href="http://www.boston.com/news/nation/washington/articles/2005/08/16/us_bid_to_keep_tabs_on_tuition_irks_colleges/%5B/url%5D"&gt;http://www.boston.com/news/nation/washington/articles/2005/08/16/us_bid_to_keep_tabs_on_tuition_irks_colleges/&lt;/a&gt;&lt;/p>

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<p>Well I guess this is the way Feds are going to go about the discussion of raising the FedFunds that are available.......usually if the Feds up the amount of loans/grants the tuition rises to match....this way the Feds can raise the amount of aid and then try to hold down the wholesale rise at the schools.</p>

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<p>Carolyn, I'm all for it. If the colleges don't want to be held accountable, they don't have to receive any money from the government-- either directly or from the students.</p>

<p>Thanks for posting this and I hope it happens.</p>

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<p>I am curious how this will affect the quality of the top/bottom both. The wealthy schools and students won't care? I can see how it will help the low end I guess.....but what about the faculty?</p>

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<p>Hazmat, if you are right in your speculation, this will be a terrible outcome. The nearly-universal government grants and loans have caused much of the tuition increase in the first place, and I can see this spiralling wildly.</p>

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<p>I mean this is a free market country and to tie the costs of all colleges to one survey/rank what a crock. That is like saying those wise enough to raise tuition in the last few years get the prize. I just don't see this being worth spit. Either they adjust the gov't subsidies and the ceilings on the awards so that all can get the funds or they don't. Trying to control the amounts of increase in the thought that it will control the tuition well I just don't see how they can make this equitable. When I see this is just smacks of gas on fire......more for the haves and less for the have nots. It will no doubt put pressure on the endowments at wealthy schools but all it points to is smaller numbers of admitted students who require funds and perhaps a turn toward tax credits/tax deductions for the tuitions we are now paying. I am not an economist but perhaps one will step in here.</p>

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<p>From the article quoted by Carolyn:</p>

<p>Schools, however, say they fear the index will misrepresent them, or that other institutions will report less than they actually charge.</p>

<p>Fred Friedrich, controller at the University of Texas at Austin, where in-state tuition and fees went up 45 percent over the past three years, said increases are only part of the story.</p>

<p>In 2003, the Texas Legislature decided to let public universities set their own tuition to offset state budget cuts, as long as they reported more financial information to the state. But schools vary greatly in the way they define tuition and fees, Friedrich said.</p>

<p>Friedrich worries that creating a federal index would only increase bureaucratic paperwork for schools as they struggle to explain their decisions. UT-Austin has been through two state audits in the past three months, he said.</p>

<p>''It may put pressure on institutions that really try to take the high road and explain how they're doing everything," Friedrich said. ''It was very difficult for us to summarize those differences in a comparable way even in the state of Texas, so if you extrapolate that to across the country, it could get very complicated."</p>

<p>Some administrators at public schools also worried that the index does not take into account fluctuations in state funding. They cited studies showing that declining state aid is the primary driver of tuition prices and said they worry their schools could be saddled with unfavorable rankings if legislatures suddenly cut funds.</p>

<p>In Massachusetts, for example, the Legislature slashed tens of millions of dollars for higher education between 2000 and 2003, with the cuts falling most heavily on University of Massachusetts campuses. Since then, the Legislature has restored some, but not all, of that money. At UMass-Dartmouth, where tuition rose 51 percent over three years, John Hoey, an assistant to the chancellor, said the Legislature was to blame.</p>

<p>''It's important to view changes in tuition in some real context," Hoey said. ''At UMass, if you take the trend over the last 10 years, as the state increases funding, the university has either frozen or actually cut tuition when few universities -- public or private -- have done the same thing. But when state funds were cut dramatically, the university has had to raise fees to make up for that gap."</p>

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<p>And thus you see the relative insignificance of an INDEX. It would be another thing for a school to have to make a declaration on their website or make it available to interested applicants. Firstly the data would change every year and at this rate how would the INDEX keep up??</p>

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<p>Hazmat, I see your point but I, myself, would love it if schools had to be more transparent and make MORE data available. Right now I think there is a dearth of data that one can use to compare various schools and let's face it, NO SCHOOL posts reasons for yearly tuition increases on their website. </p>

<p>The financial decisions and history ARE important to a prospective student and their family --- I'd like to know upfront if a school has exceeded national averages for tuition increases and I'd like to know why so I can make an informed decision before I plunk down $120,000 or more. I also think it would be useful to those thinking about making donations to colleges to know this information. I have watched my alma mater raise tuition each year for 30 years - in some years by double digits - without any explanation beyond "gee, our costs are rising" -- before I send off another check, I'd like to know exactly how and why they can't get their costs under some sort of control or if there's another component to the constantly rising tuition that might influence my decision to continue sending money.</p>

<p>How is that any different than a corporation making full disclosure to shareholders? Certainly, corporations sometimes struggle with how to explain their financial decisions but at least their is some requirement that they attempt to do so. There is no such corporate oversight for colleges and universities.</p>

<p>It would be ideal, of course, if the schools offered this information on their own but, as we all know, most schools are pretty darn secretive about why they do things like raise tuition. My main concern with the Fed. Govt. getting involved, however, is whether ALL of that information would be readily available to the public, or only some of it. If all of it would be, I say, why not make schools and their pricing policies a little more transparent?</p>

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<p>Carolyn:</p>

<p>The universities most likely to be affected by such a policy are state universities. But their funding, already vulnerable to the ups and downs of the local economy, has also been hit by the new focus on NCLB. State Depts of Education have made NCLB their priority, to the detriment of higher ed. In MA, we read about funding cuts for UMASS all the time.</p>

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<p>Actually, I think state universities do an excellent job - because they have to -- of keeping students and the public informed. Perhaps an extra layer of reporting would be onerous for them.</p>

<p>However, It's the private colleges/universities who raise tuition without much explanation or even acknowledgement that concern me most, and they are the ones I would particularly like to see held to a greater level of financial transparency.</p>

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<p>They do, indeed; but what the Fed seems to want is to keep tuition raises to the rate of inflation without regard to factors such as loss of state funding, or the need for long-neglected maintenance. I remember the days when Yale tried to keep costs down by reducing the amount of lawn-mowing and window-washing. The campus was run down. It took quite a bit of fund-raising to overcome years of neglect. State universities depend to a much larger extent on the largesse of state legislatures, the same ones who are trying to deal with unfunded or poorly funded mandates.</p>

<p>It's one thing to demand greater accountability; it's another to base it on something as simplistic as the proposed index.</p>

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<p>This is just proposed legislation and the article is in a liberal newspaper. Let's see what actually happens.</p>

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<p>The fact that the index might be simplistic does not eliminate the need for "some" accountability of tuition hikes. If I remember correcly, it was quite popular for Some to attack the current administration for make the -legal- adjustments to the Pell grants. At that time, several reports showd how government grants had failed to track the tuition increases. I believe that one generation ago, federal financial aid accounted for close to 80% of tuition costs ... a figure that has dwindled to a fraction of the prior percentage. </p>

<p>Before we accuse the federal government to failing its support of education, we should remember that the funding of education is a primarily a LOCAL responsibility, as our taxation model for education is based on property taxes and not on income. And the problems are almost always created locally, where all entities involved -from school districts to state boards- have shown a great affinity to always seek to spend more in a never ending spiral. The fatter the hog, the hungrier he gets, especially in the absence of an occasional slaughter. The state systems have shown that they have a colossal faculty to absorb increased revenues of fiscal bonanzas without having little to show for: where did the tobacco billions and the funds brought by the go-go years of the nineties go? </p>

<p>Regardless of budget constraints local school districts rarely look at sound fiscal management, try to eliminate waste, or REALLY eradicate organized fraud. Schools districts such as the Dallas Independent School District have been allowed to spend more than 50% of their revenues on administrative costs. It is a disgrace to see a number of adminsitartors earning over $250,000 a year -not counting fat packages and golden parachutes- when teachers are fighting for minimum wage increases. The solutions were easier in the past: either raise the tax rates or let the appraisal districts do the dirty work to make sure the revenues would keep climbing. </p>

<p>The amount of money we spend on education in the United States is far from trivial and places us well among the leaders in the world. Our results are, however, a lot less brilliant. We give up every bit of leadership accumulated in the formative years to earn a mediocre worldwide ranking by the time high school starts. Our system is broken and we ought to try many different solutions to fix it. If it has to start from the top, so be it. There are two ways to look at every proposal; one focuses on the potential positives and the other only underscores the negatives. There is no doubt that we can't afford to follow the current business model. </p>

<p>It is nice to attend high schools and colleges that look like country clubs, but we also have to realize that all the amenities have a negative angle with they cost more than we can afford and represent added distraction to ... the learning process.</p>

<p>We will have to learn to do with a lot less and learn to live within our means.</p>

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<p>Xiggi:
In MA, public higher ed has always been a poor relative of both private colleges and local school districts. It has gotten worse lately.</p>

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<p>"Before we accuse the federal government to failing its support of education, we should remember that the funding of education is a primarily a LOCAL responsibility, as our taxation model for education is based on property taxes and not on income."</p>

<p>Quite a few state supreme courts have disagreed with this, including Xiggi's own Texas. Of course, the texas legislature ignored the intent of the court and passed the robin hood finance act instead.</p>

<p>As far as education being a local responsibility, I would call that, at best, an observation. In the days of low labor mobility, local responsibility may have made sense. Education was a public good in the local sense, so have the locals pay for it. Today, with rather national labor markets, it might make more sense to think of the financing of an education as a national responsibility. Instead, we have national mandates with local financing, at least for non secondary ed.</p>

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<p>"We will have to learn to do with a lot less and learn to live within our means"
...and the federal gov't is going to teach us this?</p>

<p>I know, colleges should cut funding to the programs people want, increase spending on what they don't want, refuse to take in enough funds to cover their expenses, and run up a huge deficit.</p>

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<p>NMD, with a budget of 60-65 billion dollars -up from below 35 under Clinton- there are severe limitations imposed as to what the government can and should do. I doubt that the federal government could support the expenses of a California alone, or barely pay the bills of New York and Texas. </p>

<p>I believe that it is fair to assume that the percentage of federal expenditures of our GDP is quite small, and much smaller than the percentage of countries that have dedicated taxation to cover education. My point was that we do not levy much federal taxation to cover our education expenses. </p>

<p>Despite my affinity for a smaller government, I believe that a case could be made for a larger federal participation, especially in light of great geographical disparities. As a well-meaning conservative, I would call our increased spending in education -covered by federal taxes- a very wise investment. :)</p>

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<p>When considering the amounts awarded to new students it is a small amount compared to the "rise" in tuition these days. When I speak of the Feds reevaluating I am thinking they feel pressure to raise these two amounts and yet they don't want tuition to rise 100% of the increase they award. It is the chicken/egg thing. Low income students/families need an increase in the award to make college possible yet the increase will precipitate a tuition increase.</p>

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<p>"and the federal gov't is going to teach us this?"</p>

<p>I share your cynicism about the performance of our federal government in controlling spending, but it does not seem that it has a monopoly on spending frivolously. The entire country is hooked on living beyond its means.</p>