College affordability is a very real and very complex problem that deserves serious attention. There is no disputing that tuition rates have increased at an unsustainable rate over the last two decades and that student debt has risen as well.
There also is no disputing that state funding of higher education has significantly eroded during that same time frame. It is further difficult to debate the notion that New Jersey residents face a significant tax burden already and don’t have an appetite for tax increases to support higher education.
So, it’s not surprising that tuition freezes might appear to be an attractive solution to the problem of college costs.
If the college pricing question had easy answers, Moody’s Investor Service would not be forecasting a tripling of the number of colleges closing each year, which currently stands at five per annum.
The reality is that tuition rates are driven by multiple factors, including facilities and equipment purchases and maintenance, faculty and staff salaries and benefits, utilities, insurance, student financial aid, other operating expenses, and demand.
Population demographics influence demand but are beyond university control, and some costs are tied to long-term contracts that can’t be adjusted on a year-to-year basis.
Other cost drivers are related to what and whom an institution teaches. For example, a recent study of the University of Florida system examined the cost of education for an array of academic majors and determined that educating engineers and students in the physical and health sciences are the most expensive endeavors for colleges and universities.
At a public university, the revenues that fund operating costs come from tuition and fees, state appropriations, auxiliary enterprises, as well as philanthropy and endowment draw, with tuition and fees generally covering the lion’s share.
If you mandate zero-percent tuition growth without addressing the funding gap that would cause, you force colleges to make decisions that will diminish the preparedness of our workforce, stunt research and innovation activities that drive economic growth, and, most importantly, erode the quality of education provided by New Jersey’s colleges and universities.
Without the ability to control tuition in a reasonable manner or the provision of some mechanism to counterbalance lost revenue, there would be several unintended and very detrimental consequences resulting from zero-percent tuition increases.
Less financial aid would be available to our lowest-income students. Insufficiently maintained facilities and equipment would degrade rapidly and quickly become substandard.
Faculty hiring would slow or stop, and the quality of faculty would decline. Class sizes would grow and course offerings would decrease, causing many students to take longer (and spend more) to complete their degrees.
At this moment, New Jersey’s public four-year colleges and universities charge annual tuition and fees of between roughly $12,000 and $16,500. That’s a lot of money for most families, but the number of applications for admission to all of these schools is strong because of the value proposition we offer.
At NJIT, for example, our lowest income students enjoy greater upward economic mobility than students at any other university in the nation, according to a New York Times report on a study of "America's Great Working-Class Colleges" by the Equality of Opportunity Project.
Our internal data shows that NJIT students receive nearly three job offers by graduation, starting salaries almost 20-percent higher than the national average and rapidly pay-off their debt.
They also enjoy tremendous long-term career success. That’s all because they are exceptionally prepared during their time at NJIT for what indisputably has become a STEM (science, technology, engineering, math) economy.
Prospective students are attracted to our university because they see their tuition expenditures as an investment that is likely to yield an outstanding return. That return would disappear if we did not have the labs, equipment, and faculty to adequately prepare students for a competitive technological marketplace.
In this New Jersey marketplace, during fiscal year 2015, NJIT had a $1.74 billion impact through supplying the state’s needed workforce, providing researched business solutions, incubating start-up companies, community service and the direct expenditures of operating the university.
Colleges and universities have a serious affordability problem.
That cannot be denied and needs to be addressed. We must keep tuition increases low, use our available resources in ways that most directly affect student success, and do more to collaborate with industry in ways that support students, drive economic growth, and increase the return on investment in education.
Or we could turn to simple solutions in addressing the cost of higher education, such as mandating zero-percent tuition increases with no revenue counterbalance and absent a more comprehensive plan for maintaining quality and affordability.
If we take that approach, though, we will still pay a steep price in the economic health of our state.