state campaign | national campaign | take action | publications | media | main higher education page | www.nypirg.org

PUBLIC COLLEGE TUITION INDEXING: A BAD IDEA FOR NEW YORK

This year’s Executive Budget includes a recommendation to increase tuition annually and automatically, set to a price index, at New York’s public colleges. This plan is being promoted as a way to limit tuition hikes, promising predictability for students and families. Over past two years, however, other states that index tuition have seen hikes greater than the index, showing that the only guarantee is that tuition will go up and up, and at very high rates.

Research shows that a small number of states use a cost of living index—such as the consumer price index (CPI) or the higher education price index (HEPI)—either as a “significant influence” in setting tuition policy or their tuitions are “directly indexed to the factor.”1 The states that use either form of indexing are: Alaska (significantly influenced by HEPI and CPI); Arkansas (significantly influenced by HEPI); Iowa (directly indexed to HEPI); Missouri (significantly influenced by CPI); North Carolina (significantly influenced by HEPI and CPI); Ohio (significantly influenced by CPI).

2004 and 2005 were tough budget years for almost every state. Faced with significant budget shortfalls, many states were forced to consider tuition increases and funding cuts for public higher education.

The National Association of State Universities and Land Grant Colleges (NASULGC) list offers the best snapshot of tuition and fee charges for the academic years 2003-2004 and 2004-2005. 2

States with tuition indexing and their experiences in the past two years:

Public College/State 2003-04 Resident Tuition and Fee Charges 2004-05 Resident Tuition and Fee Charges Increase Range Indicated by CPI or HEPI3 Percent Increase between 2003-04 to 2004-05
University of Alaska, Fairbanks $3,477 $3,835 2.1% to 4.6% 10%
Arkansas State University $4,810 $5,151 2.1% to 4.6% 7%
Iowa State $5,028 $5,426 2.1% to 4.6% 8%
University of Iowa $4,993 $5,396 2.1% to 4.6% 8%
University of Missouri, St. Louis 6,866 $7,378 2.1% to 4.6% 7.5%
University of North Carolina at Chapel Hill $4,072 $4,450 2.1% to 4.6% 9%
Ohio State University: Columbus Campus $6,651 $7,542 2.1% to 4.6% 13%
Cleveland State University $6,072 $6,792 2.1% to 4.6% 12%
Mississippi and Utah use another index to figure out tuition increases. In 2004-05, tuition and fees increased by 6% ($232) at Mississippi State University and by 9% ($354) at the University of Utah. These increases are greater than the CPI and HEPI.
RESULT: States that use an index to decide tuition have seen tuition increases above and beyond that amount. This could happen in New York too.

WE URGE YOU TO OPPOSE MEASURES THAT WOULD INCREASE TUITION.

1 Every three years, the State Higher Education Executive Officers (SHEEO) releases a "State Tuition, Fee, and Financial Aid Policies Survey" addressing the philosophy and rationale behind decision making in the states and the various influences on individual programs and policies with regards to tuition, fees, and financial assistance policies. In the as-yet unpublished survey for 2005-06, the states were asked to identify factors and gauge the level of influence they may have when making decisions about tuition levels. A small number of states indicated that indexing--whether by the Consumer Price Index (CPI) or the Higher Education Price Index (HEPI)--carried a significant influence over their tuition setting policies. One state, Iowa, said tuition is "directly indexed" to the factor.
2 http://www.nasulgc.org.
3In 2003, CPI was 2.1% and HEPI was 2.9%; in 2004, CPI was 2.2% and HEPI was 4.6%; in 2005, CPI is 3% and HEPI is 3.5%. CPI and HEPI data are from the Commonfund Institute at http://www.commonfund.org/Commonfund/Investor+Services/HEPI.htm?m=h&AA=2

top of page | media index | higher education home page | nypirg home