From 2006 to 2016, undergraduate tuition and fees at the University of North Carolina Chapel Hill increased 86 percent. Over the same time, tuition at all 4-year public colleges and universities increased 71 percent.
A common talking point of college administrators and progressive politicians has been that state budget cuts have fueled the rise in college tuition.
Preston Cooper, Senior Fellow at American Enterprise Institute. Cooper conducted research that challenges the assertion. After analyzing tuition trends at four-year colleges from 2004 to 2015, Cooper found that every dollar of per student subsidy cuts was associated with a tuition hike of less than five cents.
Cooper found changes in state subsidies appear to have little, if any effect on tuition levels at public colleges. Cooper writes:
Rather than increasing tuition, public colleges respond to subsidy cuts by reducing spending, specifically spending in areas not related to instruction such as research and administration. For every three to five dollars in subsidy cuts, spending on instruction goes down by one. Perhaps intuitively, expenditures tangential to the central educational mission of universities are the first to go when subsidies fall.
So, what’s behind the high cost of a college education? Many believe the prevalence of federal financial aid has done more to drive up costs than any other factor. Financial aid has allowed millions to attend college. But it has also kept afloat institutions that might have otherwise closed, distorted the true price of education, and delayed necessary market corrections.
Remember that the next time you write a tuition check.