University funding: What does it buy for students? | IN 60 SECONDS

October 7, 2019 0 By Stanley Isaacs


We often hear that public universities
charge higher and higher tuition because state policymakers have cut their
funding. Some say then the way to bring tuition down is to bring government
funding up. Yet most research finds that when state governments cut or increase
funding to public universities, the effect on tuition is quite weak. One
rigorous study found that for every additional dollar public universities received from
taxpayers, tuition declined by only 26 cents. So where’s the money going? Well
for one, a university could allocate a budget increase to boost its own
spending on new programs and services. In this case, funding goes up, and university
spending goes up, so tuition stays the same. Now consider a university facing
budget cuts. One 2018 study found that universities often reduced their own
spending instead of passing all the budget cuts on to students through higher tuition. The bottom line is: not all funding cuts are bad, and
not all funding increases make tuition more affordable. What do you think is driving tuition
increases? Let us know in your comments. Also, let us know what other topics you’d like
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