What are the real effects of rising tuition on students and families?

Roland T. Rust of the Washington Post reports.

The real effects of rising college tuition

The Jan. 31 front-page article “Once-modest tuition rates soar at public universities” noted that state universities have raised tuition to offset cuts in state funding, and it gave examples of students struggling with student loan debt.

The implied conclusion was that tuition should not be raised because low-income students are inevitably harmed; this is incorrect. The effect can be the opposite because the listed tuition is not the price paid by students any more than the sticker price is the price paid by car buyers. In fact, many people pay far less.

A higher tuition rate allows a university to charge students according to their ability to pay. A higher price paid by wealthy students can raise more revenue, which can be used to subsidize poor students. Keeping tuition artificially low is often favored by politicians because “I kept tuition down” sounds noble. However, artificially low tuition is regressive because the rich are being subsidized more (because they could afford to pay more), resulting in less money to fund need-based scholarships for less-advantaged students.

It is also not true that accepting more out-of-state students results in less need-based aid to poor in-state students. The opposite is true. The average tuition revenue per capita from out-of-state students is much higher than that from in-state students, as every state-school administrator knows. Pressure from the state legislature keeps out-of-state enrollment down — the financial motivation is always to admit more out-of-state students.