Higher In-State Tuition Could Hurt Low-Income Students

July 15, 2013— -- In-state tuition at public colleges is increasing faster than out-of-state tuition, according to a report released this month from the Department of Education.

That could have a huge impact on the number of low-income students who can afford to attend state schools, which historically have offered the best all-around value.

State schools are one of the most economically sound choices for many young people. They tend to be far less expensive than private schools for students who live in the same state, but they offer broader career options and more advanced degrees than many community colleges.

But tuition has gone up for those kids by 7 percent since the 2010-11 academic year, the report notes.

That's because a lot of schools are actually trying to draw out-of-state students to earn more money. Out-of-state tuition is higher, and schools rely on having some students from other states to subsidize costs for state residents. That's become especially true recently, as cash-strapped states tighten funding for their public universities. Out-of-state tuition has increased, but only increased by 4 percent since the 2010-11 school year.

State residents say it's in-state kids, whose families have been subsidizing the systems through taxes, who deserve a chance to attend local schools. But colleges say they need more out-of-state kids to combat declining funding from state governments.

As Inside Higher Ed noted, the majority of public doctoral university business officers said recruiting more out-of-state students will be very important to their institutions' ability to raise money in the next several years.

It's already having an impact at one of the largest public school systems in the country.

In-state enrollment at the University of California-Berkeley dropped from 2008 to 2010, while non-resident freshman enrollment rose from 2009 to 2011, Inside Higher Ed reported. Black freshman enrollment decreased from 146 to 82. Hispanic freshman enrollment decreased from 450 to 426.

Public universities nationally cost an average of less than $8,000 per year, while that figure triples to more than $24,000 for private schools, the Department of Education report notes. Out-of-state tuition at public universities is comparable to that of private schools, around $20,000.

That can be cost-prohibitive for kids who need to take out loans to pay for school, and who may now be forced to look for alternatives to public colleges.

It's true that scholarships are sometimes an option, but high-achieving poor students, often minorities, are unlikely to apply and colleges have a tough time connecting with such students.

A paper presented at the American Educational Research Association in April found that:

"[T]he growth in non-resident enrollments at research and doctoral institutions could negatively affect the opportunities for state residents. In particular, non-resident enrollment growth may cause the number of low- income students and underrepresented students to decline at research and doctoral institutions."