Issues on Higher Education Costs
Colleges and Parents Prepare for Change
By Claudine Vainrub, Principal of EduPlan
With the cost of so many services going up these days, education does not stand behind. Many colleges look for ways to smartly confront the recession and survive. In the last two months, we have witnessed activity within schools nationwide that allow us to think that schools are preparing to combat deficits. Just last week, the University of Minnesota announced that if it would continue working with the current budget, by the year 2025, their deficit would be of US$1 billion (read about it here). Needless to say, they are planning cuts and drastically taking measures; change must happen.
One of the changes we have seen is the increase in tuition rates. This year in Florida, for example, state universities and community colleges were allowed to increase their tuition fees by up to 15%, which in turn, they did. Tuition usually goes up on average around 6% yearly, growing at a faster pace than inflation. Yet this year, we expect a hike from last year’s prices. Colleges have not many more options, as state funded educational institutions no longer receive the support they used to count on. Federal and state funding cuts are felt in education as much or more than in any other societal sectors.
Another strategy that has been implemented lately by some public universities is recruiting and admitting a larger percentage of out-of-state students, which pay out-of-state tuition. This strategy was publicly announced a couple of weeks ago by the University of Massachusetts at Amherst – read about it here. The school explained that, in order to prevent the university from sinking due to the financial crisis, it is implementing a campaign to aggressively recruit out-of-state students, who pay twice the tuition that Massachusetts residents do. Other public schools might find themselves utilizing similar strategies to survive the next decade. We might see this happen with popular and reputed public research universities such as the University of Michigan, the University of Maryland and the University of North Carolina, among others, where out-of-state students only represent up to 35% of student body. These schools have a lot of room for growth in that specific statistic, being very competitive and reputable schools, which can offer a great education to in and out-of-state students.
Whilst schools take measures to secure a more stable financial future, parents must also prepare for an education to get more costly. Financial planning never comes soon enough. One opportunity available to Florida residents is the Florida Prepaid Plan. Starting this week, parents will be able to enroll in this program, which allows for them to lock in the 2010-2011 tuition rates at public higher education institutions in Florida. The investment can be made for a newborn or a 17 year-old student. As the cost of education rises faster than inflation, this is one way to ensure that you can afford college education at an in-state college. If the student later on decides to attend a university outside of Florida, the money is returned to the family or can be transferred to a school of their choice. However, it is one way to save towards a college education.
Just today, the National Association for College Admissions Counseling – NACAC released its Report of College Admissions Trends. In it, NACAC shows that while the number of college applicants and applications has increased since 2001. This has resulted in a decline in overall acceptance rates at U.S. Colleges and universities of 5%. All this information means that the trend is towards more competitiveness in college admissions in the next years. Parents must not only prepare to support their children at in-state colleges, they must also ensure that they can provide funding for other alternatives, if the competition gets too rough with selective in-state schools.
In the college admissions process, sooner is better; the more prepared and informed, the better the outcome for the family and ultimately, for the student.