Subcommittee Discusses Bold Solutions to Help Reduce College Costs

December 10, 2011

The Subcommittee on Higher Education and Workforce Training, chaired by Rep. Virginia Foxx (R-NC), held a hearing entitled, “Keeping College within Reach: Discussing Ways Institutions Can Streamline Costs and Reduce Tuition.”

Over the last decade, college costs have risen dramatically. In the past year alone, in-state tuition and fees at public four-year institutions increased 8.3 percent, public two-year schools rose 8.7 percent, private non-profit schools went up 4.5 percent, and proprietary schools grew by 3.2 percent.

“This troubling trend of higher prices has several causes, including weak local economies, increased spending on student services and academic support, and state budget crises,” Rep. Foxx stated. “Leaders in Washington have long recognized the value of higher education in preparing students to compete in the global workforce. … However, as our nation struggles with trillion dollar budget deficits and unprecedented national debt, continuing to increase federal subsidies to supplement the growing cost of college is simply unsustainable ... colleges and universities must do their part to streamline costs and lessen the burden for students whenever possible.

Jane V. Wellman, executive director of the Delta Cost Project, a non-profit organization dedicated to improving public transparency in higher education finances, offered members some analysis of higher education tuition trends. “Tuitions are continuing to rise, but much faster than spending or costs. The reason is because of cost-shifting – tuitions are going up in part to replace revenues from state [and] local appropriations or because of declines in gifts or endowment earnings,” Ms. Wellman said.

Ms. Wellman also identified the increasing cost of employee benefits as one of the primary factors affecting tuition prices. “Even as salary costs are being managed, [employee] benefit costs have been growing in the public sector an average of 5% per year,” she said. “This effectively means pretty much all of the new money coming in from tuition increases [is] going out the door to pay for the growing costs of health care.”

Some institutions are finding ways to lessen the financial burden for students. Grace College and Seminary President Dr. Ronald E. Manahan described a recently implemented accelerated degree program, which expands education access and helps students save on tuition by graduating early. “Students take six hours of online course work provided by the campus for each of the two summers,” he said. “No tuition is charged for full-time students taking the 12 hours of summer online courses.” Since the program launched, Grace College has experienced positive gains in student enrollment levels. “We believe the innovative programs and services we developed to address cost and strengthen education and access are the right moves for our time and our campus,” Dr. Manahan stated.

Administrators at Colorado Mesa University are also thinking outside the box to help students manage their college costs. CMU President Tim Foster described his university’s innovative program to benefit students and lower on-campus operating costs. “As we’ve watched the number of federal and state work study awards shrink in recent years, we developed our program known as ‘MavWorks’ to match students that want to work with jobs around our campus,” Mr. Foster said. “These students work no more than 20 hours per week during the semester but they wind up with a direct connection to the institution in the form of contributing to our shared success.”

“Each of these initiatives helps ensure a more affordable college education remains available for students across America. We should continue to share best practices like these, while also encouraging increased transparency in the reporting of annual college costs,” Rep. Foxx concluded. “By making the most up-to-date information on tuition and fees available to the public, students and their families can better understand the costs, any loan commitment they will make and develop a plan for managing any resultant debt before stepping foot on campus.”