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  • How Not to Balance a CC Budget

    By Dean Dad October 19, 2009 9:10 pm

    Out-of-state students!

    According to this article, several state university systems are now considering making deliberate moves to increase the proportion of out-of-state students, specifically to capture the tuition premium. The idea is to replace lost state subsidy support.

    I won't address the logic at the university level. But at the cc level, this would be political suicide.

    In most states, out-of-state students pay higher tuition at public colleges and universities than in-state students do. This holds true all the way from the flagship university to the community colleges. (In states where community colleges are based in counties, out-of-county students usually pay a rate in between in-county and out-of-state.) The idea is that the taxes they've paid by living in that state have subsidized the cost of education there, so in-state tuition is a form of payback. Out-of-state students haven't subsidized that state's colleges, so they pay more.

    The idea isn't perfect, of course. One could easily make a case that to the extent that Federal money is involved, my taxes support higher education in every state. But it's certainly true that my state and local taxes go to my state and local systems in a way that they don't go to the systems of a neighboring state. And to the extent that public institutions are reliant on the goodwill of their taxpayers -- which is to say, for their very survival -- there's something to be said for keeping the locals happy.

    The out-of-state premium is supposed to be enough to make out-of-state students at least a break-even proposition. But in practice, many systems treat them as cash cows. They don't have the legislature's ear like in-state students do, and the fact that they're there anyway indicates a certain level of desire. They can even add a certain kind of diversity to a student body, at least in theory, even if in practice they tend to be upper-middle-class or just plain rich.

    (The exception to that is undocumented students who are treated as out-of-state. But that's an entirely different issue. There, the students in question are effectively local, often having graduated from a local high school; they're undocumented because they came over as kids. In that case, the issue isn't interstate poaching; it's federal immigration policy, which is much more complicated.)

    In discussions I've had with state legislators, the issues that prick up their ears are the number of students who live in their district, the number of employees who live in their district, and the relationships we have with employers in their district. Out-of-state students don't count. And I don't want to have the conversation in which I try to explain why our scarce marketing dollars are being spent out-of-state.

    Even leaving the politics aside, there's a basic irrationality to the entire idea. If we simply traded a third of our student body with a counterpart school across the state line, what, exactly, would we have achieved? As near as I can tell, we'd simply shift more of the cost of instruction onto students, thereby effectively licensing our home state to make even more cuts. If the students keep paying, why not? And it's not like those students vote here anyway.

    No. It's not what cc's are for, and the long-term cost would dwarf any short-term gains. I get the 'premium tuition' argument -- this week, more than ever -- but some premiums just aren't worth it.

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Comments on How Not to Balance a CC Budget

  • Posted by Phred on October 20, 2009 at 10:30am EDT

  • Good post and not just for community colleges. Going after out-of-state students at the expense of the in-state undercuts the mission of most public institutions. The only justification to do so is abandonment by the legislature.

  • CCs & International recruiting
  • Posted by CC Observer on October 20, 2009 at 11:00am EDT

  • But isn't budget-boosting a factor in the trend for community colleges to recruit abroad for international students? Seems like mission-creep to me.

    This is from 2007, but see http://www.insidehighered.com/news/2007/07/26/ccabroad

  • Balancing the Budget
  • Posted by Dave at ASU on October 20, 2009 at 1:30pm EDT

  • Let's see. If we could get all the students from New Mexico and Nevada to come to college in AZ and send all AZ students to go to college NM and NV, then everyone would pay non-resident tuition, without necessarily experiencing any dramatic climate change. But, as Dean Dad points out, there is no change in the number of students educated, and the state legislature gets off the hook. And there is some inconvenience for the students. Nah. I'm becoming convinced by the high tuition, high financial aid model. In states like AZ where, according to the constitution, tuition is required to be "as close to free as possible," people with lots of money and those with little equally enjoy the benefits of highy subsidized education. Subsidizing the rich seems kind of wasteful. Better to charge tuition that is closer to the real cost of education but robustly subsidize those who cannot afford it. Ok, so that's stealing from the rich to aid the poor, but that's better than stealing a little from everyone to aid the rich.

  • The Reality of State Funding
  • Posted by John , Director of Faculty Relations at University of Colorado on October 20, 2009 at 1:45pm EDT

  • At my AAU institution, the state currently funds only 6% of the budget, with the very great likelihood that the percentage will drop to 3% once the stimulus money goes away. If the good citizens of my state don't believe in the mission of its flagship university enough to pay for it, it must follow that the university seek funding elsewhere. Because the leadership of my university actually does believe in its public mission--and because the legislature continues to dictate enrollment policy even though it can't or won't fund the university--we will continue to enroll in-state students as the majority of its undergraduate enrollment. We will do so despite the fact that the tuition for in-state students (controlled by the legislature) is actually below the cost of their education. Being attractive to out-of-state students will enable my university to survive the double whammy of vanishing state support and the troubled economy. I worry, though, about the small institutions in the state that rely more heavily on state support and don't attract out-of-state students.

  • Another consideration
  • Posted by Nan on October 26, 2009 at 1:00pm EDT

  • There is a group of students who you neglected to mention, and they are forgotten or ignored every time the debate over in-state/out-of-state tuition comes up in my state legislature. That group is the children of foreign nationals who are living and working LEGALLY in the U.S. on various work permits, paying taxes like everybody else, and whose children have graduated from American high schools. Here in Nebraska, the state government decided that children of undocumented workers who graduate from a Nebraska high school can attend the university on in-state tuition, as they "had no choice but to come along to this state with their parents".

    MY children, on the other hand, whose parents are foreign college professors, will have to pay out-of-state tuition AND obtain student visas, which is not only another expense in terms of immigration fees but requires that the student prove that they have the money to pay for the entire degree before the student visa will be granted. My kids had no choice but to move here, too, when their father was offered a teaching job at a college after finishing his Ph.D. at an American university. Somehow, the government and the state universities see no problem with charging my kids the full shot and then some, while the children of people working outside of the system and, frankly, breaking the law are offered the discounted tuition reserved for "residents".

    My oldest is attending a private liberal arts college in another state, where she received a substantial scholarship, and it's costing us less than it would have to send her to the state university. Their loss.

  • But there is a another market...
  • Posted by Alex Herzog , Dean of Students at College of Eastern Utah on November 3, 2009 at 10:45am EST

  • After reading the post.. albeit a bit late. I got to thinking that perhaps the better market to go after to get that "out of state" tuition is International students. Most of the time (Scholarships) they pay cash for their education, are a bit more motivated and focused and they also add to the divieristy of a college campus. I often think colleges should hire local recruiters (part time) in foreign countries to get students to see the value of an American College education.

    Just a thought.

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