The question “why does tuition keep increasing?” is one of the most important questions in all of education policy. But the most common answers to this question–that it’s a result of inadequate state funding, increases in faculty compensation, or even that it might not be rising at all, are individually and collectively inadequate. Let’s take these explanations one at a time.
First up is state funding. Hundreds, if not thousands, of articles and op-eds have attributed the increase in tuition to declines in state funding: If the government cuts funding by $1 per student, the college has to charge each student $1 more. This is logical enough, but the data doesn’t support it. The chart below shows the change in tuition from the previous year, and the change in appropriations (federal, state and local) per student for all 632 public four-year colleges with sufficient data. (Note that figures in this post are enrollment-weighted averages.) The change in appropriations is multiplied by minus one, so if a $1 decrease in state funding per student leads to a $1 increase in tuition, the two bars for each year should be exactly equal. They are not.