Tuition Stability Act Heads to House Education Administration and Planning Subcommittee

Category: State Issues

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Although House action has been delayed over the past couple of weeks on the Tuition Stability Act, the bill has been calendared for next week’s House Education Administration and Planning Subcommittee and will be heard either this week or next as the Subcommittee approaches its last meeting of the session.

The bill has already passed the Senate Education Committee but is yet to be considered by the Senate Finance Committee. As drafted, it has significant negative effects on public higher education in Tennessee and ultimately tuition paying parents and students.

The bill is sponsored by Representative Martin Daniel (R-Knoxville) and freezes tuition at state colleges and universities until the 2018-19 school year.  It then requires (after 2018-2019) a unanimous vote by a university’s Board to raise tuition more than 2 percent over the most recent Consumer Price Index (CPI) increase and mandates the creation of a tuition freeze program.  The tuition freeze program would begin with freshman enrolling in 2018 and require that tuition and all mandatory fees remain fixed at freshman-year rates for the students’ first four academic years.

While this may sound appealing to college paying parents and students, the lost revenue will cripple colleges and universities ability to provide additional student support services such as personal advising, new academic programs, and will likely lead to reductions in some academic programs and degree pathways.

UT committed in 2014 to hold tuition increases to a range of 0-3 percent and continues to do so.  The University is able to do this if the legislature continues (as the Governor’s budget proposes) to fully fund the “outcomes based funding formula” and provide an adequate proportion of the funding necessary for salary support for the state’s higher education employees.

In other states, cohort-style tuition freeze programs such as the one proposed have inevitably led to wide disparity in the tuition rates charged from cohort-to-cohort.  All unavoidable fixed cost increases—such as those tied to inflation—get shifted to incoming freshman as the tuition rates for other cohorts cannot be increased.

Legislative attempts at freezing or capping tuition only work if states fully deliver on the necessary funding to bridge the gap between lost tuition revenues and actual costs.  To date, this approach has proved largely unsuccessful in states that have implemented such proposals.  Tennessee does not have a historic track record of funding higher education at adequate levels to successfully implement such a measure.

Over the last 20 years, state funding for higher education has declined 33 percent when adjusted for inflation.  In the early 2000’s, Tennessee’s public higher education institutions were pressured to raise tuition as many state funded programs were reduced leading up to the state’s highly charged debate over a state income tax.  From 2008-2012, UT’s base funding was reduced by more than $120 million resulting in a 39 percent decline in state support per student over the same time period.  Funding cuts of such magnitude have left UT with no choice but to find efficiencies, eliminate positions, and cut costs.  It also made it necessary to raise tuition rates to offset some of the lost funding and continue to make improvements to student services and academic quality.

The University opposes this legislation and continues to self-impose budgetary changes aimed at more efficiency, effectiveness, and entrepreneurialism.  These changes, resulting from an effort led by UT President Joe DiPietro, helped hold last year’s tuition increases to their lowest levels in more than 30 years.