Why do economic downturns always result in college tuition increases? Because higher education is one of the few—if not the only—services a state provides where it can offset budget shortfalls by passing the cost on to the consumer directly. For the current school year, this has been tricky: having recognized that the online education they’re receiving is an inferior product compared with in-person instruction, students are refusing to pay more and in many cases suing their colleges for refunds. Not only that, but colleges have seen substantial declines in “auxiliary” revenue from room and board costs due to decreasing density in on-campus housing or having students not come to campus at all.
With colleges beginning to announce plans for campus reopenings this fall, what’s likely to happen to tuition for the coming year? (Don’t forget, your acceptance offer includes this year’s cost of attendance, not next year’s.) One piece of good news: the American Rescue Plan included almost $40 billion for higher education both for supporting the additional costs schools have incurred and for direct need-based grants to students.
In fact, the funding seems to be at a level that allows many states to maintain current levels of higher education funding, meaning in most cases students should not expect unusual changes in tuition at public universities. However, a number of states whose finances have been particularly hard-hit by the pandemic—particularly those reliant on tourism and fossil fuel extraction—have announced significant cuts for the coming year.
If you’re curious about your college’s share of ARP dollars, the American Council on Education has simulated the distribution by school, here, based on previous stimulus appropriations. And if you want to really nerd out on the data, check out Grapevine, the University of Illinois College of Education’s annual report on state fiscal support for higher ed.