College Tuition Locks’ Unintended Consequences

Tuition locks are becoming common at many colleges, but schools are making up the difference by increasing fees. Many states have passed laws to lock in tuition at their public universities for incoming Freshmen. That way, students and their families would be able to plan on consistent costs throughout their time in school. At least that was the intent.

But as with most things government does to regulate costs, it doesn’t work out the way you want it to. Colleges still have costs they have to manage, and those costs don’t care about a law passed by some legislative body. In the April 11, 2009 edition of the Moline Dispatch newspaper, Pete Nickeas pointed out two very noticeable consequences:

  1. Colleges and Universities resort to increasing various fees to make up the revenue short fall. These fees included items such as: Sports Fees, and Building & Grounds Maintenance Fees.
  2. There are dramatic increases to first year tuition rates at the state universities.

The second consequence has really put state schools at a disadvantage. By increasing their first year tuition costs in anticipation of freezing those costs for the students throughout the next four years, many state universities have driven their prices through the roof. This makes schools like the University of Illinois and Western Illinois University much less attractive. For example, you can send a student out of state to many of the Missouri Universities next door at a lower cost than the in-state rates at the Illinois colleges.

This also means that the private colleges are going to find it much easier to compete with colleges that have adopted frozen tuition policies. Because the state colleges typically do not have the per-student resources common at many private colleges, private colleges will find it much easier to lower the student’s out of pocket costs when compared to the state schools.

So here are my recommendations to deal with this problem:

1 – Do not be taken in by the good sounding marketing of tuition freezes. You have to pay attention to your bottom line, out-of-pocket costs.

2 – Do not ignore out of state colleges. Just like in the case of Missouri vs Illinois, many out of state rates may be less than your state’s in state rates.

3 – Do not ignore private colleges. Private colleges may appear to be more expensive at first glance. But the private colleges typically have much more in per student funds available to lower your out of pocket costs at those schools.

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