Higher-priced higher ed

Day after hot summer day, Darryl Willie shows up at the North Carolina statehouse in Raleigh, begging lawmakers not to chop the higher-education budget and send tuition at his university soaring.

But many legislators don't have time to talk to the student body president at North Carolina State University anymore. The budget process is reaching a climax. And despite the entreaties of thousands of student protesters in May, lawmakers may cut as much as $125 million from higher-education spending.

It's a move that could push university tuitions up 13 percent or more. At the same time, many faculty may be let go and programs axed.

"This is going to have a huge impact on everyone," Mr. Willie says. "Whenever they raise tuition, there's always somebody left in the dark. This will definitely mean some students can't afford to come to N.C. State."

North Carolina, however, is hardly alone. For the first time in a decade, double-digit tuition increases are popping up at public universities in at least eight states, from Alabama to Illinois to Minnesota. At the University of Tennessee at Knoxville, for instance, tuition rose 15 percent after the General Assembly passed a no-new-revenue budget last month.

Tuition last soared into double digits during the recession around 1990. Yet for most of the 1990s, it was smooth sailing for public universities, which received steady funding increases from state lawmakers. Still, tuitions were rising on average about 4 percent per year - double the rate of inflation.

Then, this year, weaker-than-expected state economies brought in less tax revenue, leading to smaller higher-education appropriations. Depending on the severity of the economic downturn, the big tuition jumps could continue next year and spread to other states, part of a 10-year "boom-bust" cycle, several analysts say.

"It's repeating a pattern," says Travis Reindl, director of state policy at the American Association of State Colleges and Universities, a Washington advocacy group representing most public four-year institutions.

But the impact may be much more severe for students than it was a decade ago. Students are shouldering a heavier portion of the cost of higher education - nearly 40 percent of university revenue by the mid-1990s, compared with 30 percent in 1970, reports the Institute for Higher Education Policy (IHEP), a Washington-based think tank.

Meanwhile, the share carried by the states is in reverse. In just the past decade, state funding as a percentage of university budgets nationwide has dropped to about 30 percent from 40 percent, Mr. Reindl says. Prisons, Medicaid, even K-12 schools - all are in line ahead of public universities, while higher education is one of the few "discretionary" spending areas. Still, states have forked over more money each year in absolute dollars during the past decade.

But tuitions have risen anyway. One year's tuition at a public four-year university in 2000-01 averaged $3,510 - up 51 percent from a decade ago, the College Board reports.

The reason: State funding has not kept up with institution expenses, many say.

University officials say spending has risen so quickly because of such factors as rising costs for energy, health insurance, faculty salaries, even fancier new dorms that are a draw for students.

And oddly, as competition intensified among private and public universities in the 1980s and 1990s, it fueled both spending and tuition increases, rather than driving prices down. College tuition and fees have grown nearly fivefold over the past 20 years.

Much of the new spending has been spent on bidding for and capturing star faculty to populate the new "centers of excellence." The centers are one strategy public institutions have adopted as a way to compete with private universities for faculty, students, and media rankings.

"To stay competitive, you have to put a lot of money into the salary pool every year," Reindl says. "The public research universities have felt pressure for some time in the fight for star research faculty."

But this time, it is reaching down into "garden variety" state colleges and universities, he says. "They're under severe pressure to attract high-quality faculty to make their institutions distinctive out there in the broad marketplace."

At N.C. State, officials say serious budget cuts would affect almost every college and academic unit on campus.

"We're talking about having to lay people off, no new hires, no raises," says Charles Moreland, N.C. State's vice chancellor for research and graduate studies.

Lucinda MacKethan, a professor of English at N.C. State, is already mulling what to do this fall if the deep cuts come. She calculates that freshman composition, the basic writing course all students take, could see a big hit.

She estimates 20 to 40 adjunct lecturers may have to be fired - that's as many as 160 courses serving 22 students per course - if the deepest cuts come through.

"For any university, this is one of the basic earmarks of how well we're doing - teaching communication," she says. "If they don't get it in their freshman year at a university like ours, well, they very likely won't get it at all."

But the cuts probably will not reach a campus jewel: the school's genomic science initiative, one of several "thrust areas" that has cost about $100 million over the past four years, Mr. Moreland estimates.

"We're doing our best to protect that from any cuts," he says. "It's what we use to get our competitive edge. If we lose that - you see, it doesn't take much of a cut in that area to do away with your competitive edge. Small cuts can be very damaging."

Yet the buildup of such centers is not without considerable irony. First, star faculty may make six-figure salaries, but most public university faculty make far less than their peers at private institutions. That widening gap keeps the pressure on to boost tuitions in order to raise salaries - even if much of that goes to star faculty.

The competition is an "arms race," says Jane Wellman, IHEP senior associate. Others make a similar analogy.

"Its just like the cold war - nobody's going to unilaterally bow out of this," says F. King Alexander, assistant professor of higher education at the University of Illinois at Urbana-Champaign and an expert on the growing gap between private- and public-institution faculty compensation.

The decision to do battle with private universities could have a profound effect on the important role public institutions play in educating a broad range of individuals.

Dr. Alexander says the United States has long depended on public higher education to be an equalizer, giving a leg up in education and the job market to the lower and lower-middle economic classes. So higher tuition costs at public universities matter much more in a new millennium, when a knowledge economy defines the haves and have-nots by their level of education.

Even a $300 to $400 increase in tuition can mean the difference in whether an "at risk" student from a low-income family attends college, says Thomas Mortenson, a higher-education policy analyst.

"There has clearly been a shift of lower-income students out of public and private four-year colleges and universities and into public two-year colleges," Mr. Mortenson says. "Well, gee, this is nice. You reserve your spots at top colleges for rich white kids and tell the others, 'You can take the community-college route.' "

In the rush to keep up with private universities that sometimes have billion-dollar endowment war chests, the public institutions risk their fundamental mission, he and others say.

"At some point, higher education begins to perpetuate or even extend economic divisions in society," Ms. Wellman says. "We've nearly reached that point now."

Still, it doesn't have to be this way, she says. The "Tuition Puzzle," a 1999 report by IHEP, outlines numerous policy steps that states and institutions need to take. Public higher education could move away from the decade-long cycles of boom and bust that are typical now.

But it won't be easy. Legislators have to pull apart the knot that interlaces faculty salaries, market competition, and legislative procedures. The biggest obstacle, though, is apathy.

The current approach is to take the "path of least resistance," Wellman says - and that means tuition hikes follow budget crunches.

Send e-mail comments to claytonm@csps.com