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Re-calculating Tuition During the COVID Crisis

Tomorrow's Academy

Message Number: 
1816

 

The start of the fall term is as good as any for boards of trustees to take note of the criticisms about tuition. They should examine the institutional cost structure; analyze the alignment of mission, goals, expenses, revenues, rewards, and results; and reset tuition and fees in a more transparent way. Such actions would go a long way in justifying the cost of tuition and restoring public trust.

 

Folks: 

The posting below gives some excellent advice on a topic that has generated much discussion during the move to online teaching at many institutions of higher education.  It is by Dr. Robert A. Scott, president emeritus and university professor emeritus of Adelphi University where he served from July 2000 to July 2015. His is also the author of How University Boards Work, Johns Hopkins University Press, 2018.  The posing is from the Wednesday, August 26, 2020 issue of Higher Education Jobs: https://www.higheredjobs.com/articles/articleDisplay.cfm?ID=2403. Copyright 2020 HigherEdJobs.  All rights reserved. Reprinted with permission.

 

Regards,

 

Rick Reis

reis@stanford.edu

UP NEXT: A Time to Experiment

 

Tomorrow’s Academy

 

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Re-calculating Tuition During the COVID Crisis

 

Lawsuits seeking tuition refunds for Spring 2020 and reduced tuition for Fall 2020 have put a spotlight on how college tuition is determined. The move to remote teaching and learning this spring, with no reduction in tuition, brought renewed public scrutiny of college costs. Parents, politicians, and pundits have criticized tuition increases that exceeded the rate of inflation. The change to remote methods also brought attention to the fact that colleges often charged lower tuition for online programs.

In the past, online programs were designed to be taught remotely to large classes of students, sometimes in the thousands, and were priced accordingly. This past spring, normal on-campus courses with enrollments of a dozen or more students, and already underway, had to be changed to remote teaching over a weekend. In addition, academic and student support services and career counseling were also shifted to online, some for the first time. Information technology equipment and programming as well as professional development training for faculty and staff had to be updated quickly.

After the shutdown of campuses due to COVID protocols, colleges incurred these and other costs. They also experienced reduced revenue from summer programs, rentals, investments, and students deciding to take a "gap" year. To compensate, colleges have resorted to furloughs and layoffs, exacerbating divisions on campus between faculty and staff on the one hand and trustees and presidents on the other.

It is important to consider both what is and is not provided to students when teaching and learning occur remotely. For most institutions that were not intended to be an online university, the shift to remote methods required increased professional development for faculty and training for students, upgrades to campus software and hardware, enhanced support for the design of courses, and concerns about students' access to computing, internet, and a quiet place to study. The months since the major shift to online in March has given campuses some time to consider what worked well and what improvements are needed for effective teaching so that students will not complain about being in an uninspiring "Zoom Room" all day.

The start of the fall term is as good as any for boards of trustees to take note of the criticisms about tuition. They should examine the institutional cost structure; analyze the alignment of mission, goals, expenses, revenues, rewards, and results; and reset tuition and fees in a more transparent way. Such actions would go a long way in justifying the cost of tuition and restoring public trust.

Tuition has increased almost 100 percent since 2001, after accounting for inflation. These increases occurred at both public and private institutions. As a result, average tuition at public four-year universities is $10,440.00; and at private institutions it is $36,880.00. 

The major reason cited for increases at public institutions is the reduction in state support. The 49 states except Wisconsin spent 44 percent less per student in 2017 than in 2008, a reduction of $7 billion. For both public and private colleges and universities, the causes include increases in health care premiums, facility costs, marketing and recruiting costs, added student support services to help increase graduation rates, meeting accreditation standards, staffing for legal and compliance requirements, and technology upgrades.

College leaders need to address the fundamental costs of college operations. Such costs include those for administration, "branding," athletics, and the costs of instruction. These costs of instruction include the scale and scope of curricula, the number of credits required for graduation, how faculty are employed, and the priority given to teaching and advising as the essential activities at most institutions. These all require scrutiny by boards of trustees and presidents as well as by faculty senates and the faculty at large. 

Tuition and fees are the principal source of revenue for most colleges: they fund salaries and benefits, professional development for faculty and staff, and the costs necessary to operate a small city. These costs include instruction; advising; counseling services for health, internships, and career advice; and graduate school guidance and recommendations. They also include certification of achievement through grades, transcripts, and diplomas.

Additional services include public safety, heat, air conditioning, housekeeping, building and grounds maintenance, debt service, and transportation to and from parking lots, buses and trains, shopping centers, and events. They also fund student activities such as clubs, organizations, and sports, both intramural and intercollegiate. 

Perhaps as significant as all these other services, tuition also funds scholarships and financial aid. Most colleges do not have sufficient endowments to provide the funds necessary to support students, so they fund financial aid by discounting tuition and calling it a scholarship. This leads to an increase in the "sticker price" of tuition for all students in order to provide scholarship incentives to some. 

The result is a decrease in the net tuition available for basic services and quality enhancements. The competition for students due to declining numbers of high school graduates and the decline in international students due to policies of the U.S. and other countries, such as China and Saudi Arabia, compel many colleges to offer such scholarships in this way, in some cases by discounting the price of tuition by up to 65 percent.

Charges for room and board are separate. Payments for these were either refunded or continued as a credit for the fall.

Boards of trustees set the tuition rate by considering the need for net revenue, what competitors are charging, what they think is necessary to remain affordable to desired students, and what the political climate will tolerate. Yes, even private colleges must be sensitive to what politicians say about tuition costs for their constituents.

While it is true that students studying remotely do not benefit directly from some of these operating expenses, the institution certifying their achievements must continue them in order to provide prudent stewardship of campus assets and meet certain accreditation standards and bond covenants. The value of a student's degree and course credits will depend not only on their achievements but also on the reputation of the institution. Accreditation or bond-rating downgrades due to inadequate attention to the college's infrastructure will damage the reputation of students' hard-earned degrees.

Unfortunately, the inconsistent messages from public officials resulted in some campus leaders feeling compelled to plan on opening campus to students this fall. Others hedged their bets and prepared for both possibilities. Reopening will require additional health and safety measures such as testing and tracing, fewer students in residence halls, reconfigured classrooms and dining facilities, and spaces for those needing to quarantine. The result is increased costs and reduced revenue.

The benefits of higher education are known. The correlations between college completion and employment, income, health, civic participation, and personal outlook are positive. We know the benefits and must find ways to make college accessible and affordable to more people by making changes in the college cost structure, controlling tuition and total costs even more rigorously, and funding more scholarships.

The COVID pandemic has induced increased costs for health, safety, and technology, and taken attention away from certain structural issues that need to be addressed. Trustees, states, and accrediting bodies should hold institutions to account for the alignment of mission, goals, strategies, the allocation of resources, rewards, results, and the costs involved. These fundamental issues must be addressed, and tuition set in relation to necessary expenses, whether or not remote teaching and learning are continued into 2021.

 

 

Robert A. Scott 
 

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