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As state funding dips, universities target out-of-state tuition

Ohio State has increased its nonresident surcharge by 13.6 percent in four years. Credit: Jack Westerheide | Photo editor

The cost of education at Ohio State — if you are a resident — has remained at a standstill for the past five years, but the cost for out-of-state students is climbing, and likely will continue to, with decreases in state funding spread across the nation.

In fact, Ohio decreased its higher-education funding by 0.1 percent in the 2017-18 fiscal year, which might sound miniscule, but it equates to nearly $3 million in cuts, according to an annual Grapevine education policy study. For every $1,000 cut from state funding, the average student can be expected to pay $318 more per year in tuition and fees, according to the Economics of Education Review.

But in-state students — graduate and undergraduate — did not see a spike in tuition from 2013 to the 2017-18 academic year. The pockets it seems to be hitting are those of nonresident students. The nonresident tuition surcharge has increased by 13.6 percent in four years, even though the 2017-18 fiscal year is the only one to include a drop in state funding, according to Grapevine.

The Grapevine study is compiled by the Center for the Study of Education Policy at Illinois State University and the State Higher Education Executive Officers. Each year it publishes data on state tax support for higher education.

When it comes to the relationship between state funding and Ohio State tuition, the university works first to ensure in-state students are not affected by a state dip, and thus a possible tuition hike, University President Michael Drake told The Lantern Tuesday.

“Our intention with the state is to do what we can to hold tuition as low as it can be and to be funded enough to continue to expand our quality and our excellence,” Drake said. “We focus that mostly on in-state students. That’s our primary focus.”

There isn’t an exact, correlated relationship between state funding and tuition cost, said Andy Carlson, vice president of finance policy and member services for the State Higher Education Executive Officers.

In the 2013-14 academic year, tuition for the majority of undergraduate nonresidents who took 12-18 credit hours was $12,878.40, including a $7,860 fee. In the 2016-17 academic year — the most recent data available — tuition for nonresidents was $14,114.40, including a $9,096 fee.

For graduate nonresident students seeking a master’s or doctoral degree taking eight credit hours in the 2013-14 academic year, tuition was $15,044.40, including a $8,832 fee. In the 2016-17 academic year, it was $16,436.40, including a $10,224 fee.

Since 2013, tuition for in-state undergraduate and graduate students has remained at $5,018.40 and $6,212.40, respectively, per semester.

While Ohio State is branding itself as more affordable as of late — specifically announcing tuition freezes and complete tuition coverage for Pell Grant recipients — the ability for it to become more affordable for nonresidents will continue to be a balancing act.

“There’s always a push and pull there with in-state affordability and out-of-state costs when it comes to flagship institutions putting pressure to admit large proportions of in-state students. That’s politically expected of a state university,” said Jim Palmer, Grapevine’s editor. “On the other hand, out-of-state students pose interesting revenue opportunities for universities.”

“There’s always been an assumption with nonresident students that they should cover the full cost of their education, which is why nonresident tuition tends to be more expensive,” Carlson said. “From a state’s perspective, their goal would be making it affordable for their residents and honestly charging more for nonresidents is a way to keep the price down for the resident students because all of the revenue is frankly going to fall into the same pot. I get the disconnect.”

Drake said increased out-of-state tuition is market-based. For instance, the university noticed its nonresident tuition was low “several years back” compared with national averages and decided to adjust and increase the amount to reflect the typical nonresident costs.

“For out-of-state students, international students, we really there compete mostly on trying to be the best value that we can be because they have multiple opportunities to choose from,” Drake said, adding the university comes up with a cost that is “appropriate for us while having the resources to be able to support [nonresidents] and the broader institutions effectively.”

The trend for universities to decrease tuition for in-state students and increase it for nonresidents is a movement happening across the country, Palmer said.

Additionally, he said this desire for universities to become more affordable for in-state students often is not supported by state funding and taxes.

“On one hand, there seems to be a growing sentiment to make higher education affordable for students. This is part of the free-tuition movement,” Palmer said. “By the same token, there doesn’t seem to be a corresponded movement to raise taxes. Even though, again, there are variations across states.”

Among Big Ten universities, Ohio State has the third-lowest tuition for out-of-state students, with University of Minnesota and University of Nebraska maintaining lower costs. The most costly out-of-state tuition in the Big Ten for the 2016-17 academic year was University of Michigan. It cost $47,476 to attend as a nonresident.

“Higher-education funding has often been referred to as the balance wheel of state budgets,” Carlson said. “More often than not in most states, it’s kind of the last thing that states figure out what level of funding to provide after doing things that have more mandates to add to them.”

Despite the growing economy in the past year, higher-education funding nationwide increased by only 1.6 percent, according to Grapevine.

“It’s a pretty anemic increase,”Palmer said. “It’s really hard to be optimistic when we juxtapose the anemic growth of state funding this year against the back glow of an otherwise growing economy.”

He said the national trends reflect state struggles in maintaining revenues needed to increase funding for higher education.

“It’s death by a thousand cuts,” he said.

 

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