By now, most of you have seen your semester bill. It's probably a fair guess none of you are thrilled with the rising tuition rates. Ball State's have risen 123 percent in the past 10 years. The conundrum is now drawing legislative interest.
This past week the Indiana Senate moved toward providing some form of relief from the rising tuition costs. Senate Bill 262 would limit the amount tuition rates can be raised no more than three percent annually from the freshman rate.
State Senator Luke Kenley wrote the bill and is attempting to respond to voters who've expressed dismay at the rising costs. Said Kenley, "Some level of predictability is only a fair thing to do for students and their parents."
On the surface, Kenley's proposal looks and sounds good to a cash-strapped family or student. But Kenley forgot that somebody has to pay the full price.
Kenley's cap overlooks the rates at which tuition is rising. The Higher Education Price Index (HEPI) tracks the cost of inflation for education. Currently, the rate is running around 3.6 percent, which is above the three-percent cap. The remaining 0.6 percent of the cost would not be seen, but it will be felt.
Price caps are the economic wolves in sheeps' clothing. They keep rates steady for customers but behind the scenes they are murder. Price caps disguise the total cost of what's being paid for.
Kenley's cap would impose a fixed cost on a student's education even though the true cost will still be rising. Somewhere, somehow, that total cost has to be paid. Kenley's cap is burdening taxpayers, since they'll have to make up the difference despite higher tuition rates.
Only two concepts can offset rising tuition: a reduction in university costs or greater state appropriations for education. The latter has been especially damaging because Indiana's budget crisis has dramatically reduced the funding that offsets tuition costs. Tom Morrison, Ball State's Director of State Fiscal Relations, told me that BSU has lost $32 million in state appropriations over the last three years.
Morrison also noted that when the state is in the black, tuition increases are low. It's reversed when a state is $800 million in the red, as the Hoosier State is.
Others are calling for universities to be more financially accountable. Gubernatorial candidate Mitch Daniels has called on universities to do just that and also wants universities to provide "an economic return as well as an academic return."
Both Morrison and Daniels are on the right track. The state needs to get its finances in order so it can appropriate the needed funds. Overall, education constitutes more than half the state budget and the total appropriations will be $2 billion less than the requested amounts for the next two years.
Daniels' call for the university to be more cost-conscious is also welcome. Universities have high fixed costs due to tenured professors, insurance, lab equipment and other expenditures, but in tight times, the university needs to make sure the students' dollars are used wisely.
The greater lesson in all of this should be what an education really costs. The rising rates of tuition illustrate a key life lesson: There's no such thing as a free lunch (or education).
Write to Jeff at mannedarena@yahoo.com.
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