The Limits of Tuition

Colleges apparently aren’t expecting to raise much money from tuition increases in coming years. This is according to a survey by Moody’s Investors Service. As Paul Fain explained in the Chronicle of Higher Education:

When looking forward, a growing share of public-college officials were pessimistic about net tuition.

About one in five public institutions projected a decline in tuition and fee revenue for the current fiscal year, which Moody’s attributes to political pressure on some to slow tuition increases while also increasing financial aid. Among private-college leaders, 15 percent projected a dip in net revenue.

The reason is that, while in recent years colleges have earned additional revenue per student trough tuition increases, there is only so far tuition can go. While net tuition revenue increased last year for virtually all colleges (96 percent), the recession makes people more critical of the cost of college. “Politicians and students are resisting tuition increases,” according to the article.

Colleges also can’t raise as much money through tuition because the recession means that a lot more students can’t afford tuition. Schools end up increasing the number of recipients getting discounted tuition by offering more financial aid to more students.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer