On The Setting of SUNY Tuition* D. Bruce Johnstone

Back to Dr. Johnstone's readings  

It is a pleasure to be back before the SUNY trustees in my first official capacity since departing due to illness a year and one-half ago. I am sure that I am here in part due to my experience with the SUNY System, both as president of Buffalo Sate College for nine years and as Chancellor of the System for six. As Chancellor, I was the principal author of the very first comprehensive SUNY Tuition policy, adopted by the Trustees in 1991--which I am pleased you are revisiting in light of new conditions and new leadership.

But I think that I may be here more in my capacity as something of an authority in national and international higher education finance, particularly in tuition and financial aid policies, and in the entire complex mosaic of policies, procedures, and instruments by which states and nations apportion the costs of higher education among students, parents, and taxpayers.

I see three essential questions for the SUNY Trustees to answer in the re-examination of a SUNY tuition policy and in advocating for its acceptance by the Governor, Legislature, campuses, and ultimately the people of the State of New York:

First, what is an "appropriate" level of tuition. That is, what is an appropriate share of the costs of instruction to be born by the student and/or parent, as opposed to the share to be born by the state taxpayer or by an expectation/requirement of philanthropy?

Second, how should tuition be allowed or required to vary? For example, by:

• the level of the education (e.g., lower division or upper division undergraduate);

• the cost of the individual major or even the individual course;

• the average instructional costs associated with a sector of higher education--for example the comprehensive colleges (Fredonia and Plattsburgh) Vs the university centers (University at Buffalo and Binghamton);

• the market power of the individual campus--i.e., the ability of the campus to raise tuition and not lose the students and families of its traditional pool of applicants and matriculants; or

• the income of the parents of the individual student--over and above the association between family income and net tuition already built in through the federal, state, and institutional systems of need-based financial aid. (Such a "variation" would have the effect of raising tuition very substantially to the dependent children of upper-middle and upper income parents, according to some sort of schedule of increasing tuition with parental incomes up to some maximum.)

Third, what is to be the linkage between tuition and enrollment? More specifically, will individual campuses be allowed to retain the tuition dollars for students that they are able to attract over and above the number traditionally matriculating and for which they are to be supported by State assistance, regardless of the appropriateness of this "marginal student" to the mission of the campus and regardless of the impact on other campuses that traditionally attracted (and expected to matriculate) this kind of student?

Fourth, how, where, and by whom, is tuition to be collected and retained? Specifically, is it to be collected and retained in campus bank accounts, symbolically never to leave the campus? Or is tuition, as under current law, to continue to be treated as a state resource, to by held in the SUNY income account (with its campus designation) and paid into the General Fund of the State as an offset to the SUNY appropriation, which in turn is the sum of the tuition revenue expectations from each campus?

All of these issues deal with the New York State resident undergraduate tuition. This is not to dismiss altogether other tuition issues: e.g., non resident tuition, or graduate or advanced professional school tuition. But the total revenue significance of these "other tuitions" is so slight and the political and emotional stakes so minor compared to the consequences of the tuition to be established for the New York State resident undergraduate that it seems almost a distraction to spend time on them. In any event, once the New York State residential tuition is set, most of the other questions will be resolved by a kind of "proportionality."

This principle is all the more true of non-tuition revenues: e.g., fund raising, research and other sponsored programs, auxiliary enterprise revenues, fees, and general entrepreneurial activities. All of these, too, are important. But they have been known to be important for more than a decade, and there is no SUNY campus that has not been giving substantial and increasing attention, frequently with clear success, to these other sources of revenue. That SUNY campuses are still well behind the great public universities of the Midwest and West in their endowments and annual giving is a clear consequence of the failure of New York State even to establish a true public university until the 1950’s, as well as to the generally low level of public support SUNY has enjoyed from the State’s business and civic leadership, especially Downstate. SUNY must and will do better. But there is no great controversy about this imperative--and, again, it seems almost a distraction to devote large amounts of time to what is essentially a non-controversial issue when there are such genuinely controversial issues of great significance now before the Trustees.

Let us consider each of these key tuition issues, with the understanding that they are all connected and that a final Board tuition policy must bring them together. It is also well to remember that SUNY tuition policy is currently constrained totally by a web of state laws and long-standing Legislative positions (both Senate and Assembly), many or all of which the SUNY trustees may wish to attempt to change, but which were put in place purposefully, if not always wisely, precisely to prevent the trustees and the Chancellor--and especially to prevent the individual campus presidents--from shifting more of the costs of SUNY onto the student and the family via tuition than the Legislature thought proper.
 

1. The Appropriate Level of Public College and University Tuition

In many ways, this is the least answerable by rational analysis. The "appropriate" tuition level for public colleges and universities may reference, for example:

• comparisons with other states. In the case of New York and SUNY, the results depend overwhelmingly on which states are chosen for the peer comparisons. If the end goal is to support a very high tuition, then New England will be taken as the appropriate comparison--in which case SUNY tuition is already a bit high for the colleges, but still below average for the research universities. (The University of Vermont, however, is not even thought by many to be a true public university, but is essentially a private university, with a bit of state assistance, competing for students nationally with other private colleges and universities that similarly offer the ambiance of New England and proximity to great skiing.) If the intent is to show that SUNY tuition is already "comparable," then a national average can be used, which will show SUNY tuition to be already a bit above average, but very much in the middle of the range. If the desire were to be to show SUNY tuition to be already high, then a comparison could be made to Western and Southern states, especially with regard to the comprehensive colleges and the community colleges.

• "appropriateness" can also be taken to be a tuition that student and parents seem still willing (if not necessarily happy) to pay without denying accessibility to those students who are sufficiently committed to a higher education to be willing to incur substantial indebtedness and to work part-time or even full-time while attending. In this respect, there may still be some room for more tuition increases, particularly with the help of state and federal need-based aid. But a public higher education costing, as SUNY now does, in the range of $12,000 a year is still a heavy lift for most families. And there does seem to be some withdrawal already on the part of the more tuition-sensitive part-time and non-traditional student populations.

• "appropriateness" can also be inferred, even if only loosely, from a tuition level that is compatible with a public university system that is meant for all (or at least most of) the people of the State--bearing in mind that New York State (especially Downstate and Long Island), for historical reasons, remains overwhelming oriented to private higher education. At some point, very high costs (considering tuition, fees, room, board, and all other costs of attendance) in SUNY will get so close to the private alternatives, that the "private patina" and vastly greater endowments of many of the private colleges will make them the colleges of choice for all or nearly all New York students who are most academically desirable (very much correlated with family affluence), and will relegate most of SUNY to the students who do not have other private choices. The private colleges naturally find this a most acceptable outcome. And many individuals also find this outcome not objectionable, particularly in the mood of public sector downsizing and dismantling that seems to be in political vogue. In the end, the state of New York must make a decision on whether it wants to have a high quality, attractive state university as something that the middle and upper middle class taxpayers and voters get for their taxes ... or whether it wants a state university that serves mainly the less able and the place bound--and even for these, at total cost levels that require substantial indebtedness.

• Finally, along with considerations of "appropriateness," it seems important to recognize the difference between a public tuition that is considered, by whatever criteria, to be "appropriate" from a public tuition that is politically or budgetarily necessary, or merely expedient. In the short run, it will nearly always seem more expedient for the state to impose another very high tuition increases than to cut into those parts of New York’s public sector on which New York continues to spend more than most other states, like elementary and secondary education or health or criminal justice or the cost of government itself. (New York actually spends less of its state budget on public higher education that almost every other state.) It will similarly be expedient for the university to impose a very high tuition increase when the alternative is to initiate even more damaging terminations of faculty and cuts in programs. Ideally, however, the Trustees should construct a tuition policy they believe to be "generally appropriate" by whatever criteria, including some recognition of political feasibility, and then try very hard to find the funds to accommodate this policy--knowing that funds will fall short in some years--rather than construct at the outset a policy that uses tuition simply as a politically expedient annual budget balancer.

2. Variations in Tuition

Tuition differentials by program. Almost nowhere does undergraduate tuition vary by individual course or major except by charging certain fees for certain majors that expend large quantities of consumables, or otherwise draw on very specialized and expensive equipment. Variation of tuition by individual major or individual course would pose great problems both in practical implementation and in policy ramifications.

Tuition differentials by sector. The principle policy option at this time seems to be the variation of undergraduate residential tuition by sector: especially between the university centers and the comprehensive colleges. This is a proposal once advocated by the governor, the chancellor, and many of the campus presidents, but at the time seemed too contentious, both within the campuses and within the Legislature. Because State law currently mandates equal tuitions across the state-operated system for equal degree programs, and because the Leadership in both the Senate and Assembly made it clear that this provision would not change--and because, at the time, there were higher priority political battles to wage--the concept of differential tuitions by sector was set aside. It now seems timely to revisit the issue.

A higher tuition in the university sector than in the four-year college sector would be supported by:

• practices in most other states,

• the generally higher costs of education at the university centers;

• the more robust and probably slightly more affluent applicant pools of most of the centers, meaning that most of the centers could raise their tuition and maintain the enrollments better than most of the colleges. (This is not true across the board however, as some colleges such as Geneseo have deeper and more robust applicant pools than most of the university centers. But in general, the centers could support higher tuitions with the assurance that most of their traditional students will still matriculate, and that those that may be disinclined to pay the higher tuition can still find a place in one of the less expensive and slightly less selective colleges.)

All of this would seem to support a tuition differential between the university centers and the four year colleges. At the same, there are considerable difficulties implementing such a policy from the current relative level of state appropriations. The university enters are currently supported considerably more generously by state tax funds than are the colleges because their costs are deemed to be appropriately greater. But should the current per-student expenditure advantage in favor of the university centers be allowed to become even greater with the boost of higher tuitions at the university centers? Or, is the current per-student expenditure advantage currently enjoyed by the centers "about right" (considering the State’s fiscal realities), such that the current gap in per-student tax support might be narrowed a bit with the advent of higher university center tuition?

Put another way, if the current law mandating equal tuitions between the colleges and the centers is to be reconsidered, to the revenue advantage of the centers, would it not be appropriate to then also reconsider the underlying allocation of state tax revenues, which currently favors the centers--but which, with higher university center tuitions, might not need to favor the centers to the same degree. At the same time, however, it would probably be both unwise and unfair to impose a substantially higher tuition on, say, the University at Buffalo student without at least most of the increased revenue staying on that campus.

In short, a higher undergraduate tuition at the university centers, based on their higher per-student expenditures, is still a good idea. But it is neither uncomplicated, nor without some potentially mixed blessings for the centers.

Tuition differentials by "market power." Similar problems arise in the differentiation of tuitions according to the market power of the campus. The market power of a campus, in turn, is a complex function of:

• the "traditionalness" of the student body--that is, the degree to which the predominate campus student body is of traditional college-age, residential, and largely full-time;

• the reputation of the campus and depth of applicant pool, and the degree to which most of the students in the applicant pool are considering mainly private, as opposed to public, college options;

• the affluence of the family (highly correlated with the above characteristics).

It is generally assumed that campuses such as Binghamton and Geneseo, with large numbers of traditional-age, academically well-prepared applicants, many of whom are from affluent families and who are probably also applying to several high-cost private colleges, could raise tuitions more sharply and still fill their classes more easily than, say, a Buffalo State college, with its larger proportions of middle income, first generation, and non-traditional students, many of whom will apply only to public campuses.

A practice appropriate for private or proprietary colleges, however, may not be appropriate for higher education’s public sector. If SUNY campuses with deeper and more affluent applicant pools were to be allowed to charge (and to retain) larger tuitions, each campus will attempt to move up the scale of academic selectivity and socioeconomic status of student body partly because such students are generally easier and more pleasant to teach, and also because this is the way to avoid disagreeable things like having to fire faculty and abandon programs simply to meet budget cuts.

But it is not clear that a Binghamton or a Geneseo are "better," or bring more value to the state, or even necessarily add more value to the students they teach, than other less-selective campuses. Such reasoning would suggest that campuses not be allowed to enrich themselves simply on the basis of greater market power. On the other hand, at least some of this heightened market power may well have been "earned" by an effective and a caring faculty as well as by good recruitment--suggesting that the greater selectivity and market power might appropriately be rewarded by the higher tuition that their students are almost certainly willing to pay.

Clearly, all campuses cannot move into a Binghamton/Geneseo market niche. Rather, the system and the people of New York State are benefited by having the great mix of missions and niches. It should be up to the trustees, ultimately, to determine these "missions and niches" and to assure the continuation of SUNY’s historical acceptance of differentiated campus roles. The trustees need to be wary about a tuition policy that creates a system of "haves" and "have nots" according to selectivity or market power.

Tuition differentials by parental income. This proposal is often heard from those who would shift most of the able and affluent students to the private sector by removing most or all of the state subsidy from the public universities, charging full or near-full cost tuition from those parents who are considered able to pay, and giving tuition discounts only to the children of those with some kind of financial need. Underlying this proposal is also the assumption that it is a waste to provide at state expense something that people would be willing, if necessary, to pay for themselves.

While I believe this proposal would end the state university we have come to know, it must be taken seriously. The private college and university sector in New York State, with their considerable political power, would love to see such a policy. So would those who believe that some of the problems they attribute to public colleges and universities are a function of insufficient competition--and the SUNY colleges must learn to compete without the "artificial" advantage of partially subsidized tuitions.

One of the arguments against such a proposal is that we already have considerable "association" between income and tuition with the state and federal financial aid policies, now extending well into the upper-middle income ranges. Another is the great limitation in inferring "need" from parental income alone. Some colleges have attempted to so simplify their "need calculations" on such a basis, but all of them, to my knowledge, have returned to the considerably more complex, but purposeful factors that are entered into the calculation of "need" in addition to the parents’ income.

A blunter, but possibly more telling, argument is that the proposal for income-linked public tuition has been around for years but has never been taken seriously in the arenas of state public policy making, perhaps because most people like the thought of getting something for their state tax dollars other than transfer payments, prisons, and schools that don’t seem to work very well.

But the real issue, I believe, is whether the Governor and the Legislature want a public university system of recognized quality and responsive to the needs of the state--or whether the policy makers would be just as satisfied with a lot of private colleges that seem to do most of what needs to be done--and maybe a public system to do what the private colleges and universities cannot, or choose not, to do.

3. The Linkage Between Tuition and Enrollment

One of the long-standing matters of contention among the campuses is the practice, at least in hard times and at least as perceived by most of the colleges, of the university centers "dipping down" into their applicant pools to admit students whom they initially rejected or "wait-listed" and who are arguably better suited to a four year college than to the research university. Many of these students, in fact, were often accepted at one of the colleges before being lured away by one of the centers, frequently in the summer, to fill last minute anticipated shortfalls in the university center enrollments.

This may be an exaggerated fear. Or, it may be a real occurrence, but of little policy significance. It is at least arguable that the trustees and the central office should simply not care about where any particular student goes as long as it is by his or her choice. Perhaps it is right that the more competitive campuses should prosper regardless of the Central Administration’s or Trustee’s views of where the students should be going, or of the impact on those campuses farther down the academic food chain. But a higher tuition at the centers (closer to the real marginal per-student cost of instruction) would, if the centers could keep all of whatever extra tuition they brought in, greatly increase the fears on the part of most of the colleges, and some clear signals have to be given from the chancellor and the trustees on the appropriate limits to such enrollment competition.

One possible resolution to this problem might be to allow all campuses to attract all of the students they want and can and to keep all of the tuition other than that from excess enrollment of first-time freshmen. Enrollments of first-time freshmen over the planned number could be kept in a central fund to ease the transition to lower planned enrollments for campuses that are losing enrollments (and budget) overall. However, enrollment of "excess" first time freshmen, as well as over-enrollment generally, could be used as "markers" to change succeeding years’ distribution of enrollment targets and thus to increase, over time, the campus’s share of the enrollment-driven state aid. It would be assumed, then, that the burden of over-enrollment with no state tax funding, as well as the problems of matriculating students that do not match the campus mission, will be sufficient disincentives to discourage excessive over-enrollments

4. Where the Tuition Money Goes.

As campuses become more free to set their own enrollments for tuition purposes--still, however, constrained by trustee policies as to the enrollments that will be funded with state tax dollars--there will be less and less rational for the SUNY Income Fund. Although the practical effect will be mainly symbolic, the trustees might request the necessary changes in state finance Law and in the Executive Budget Presentation to allow campus retention of tuition dollars.

Perhaps most of all, the SUNY system and the people of New York need a tuition policy that is settled: that is, defensible, predictable, and relatively removed from the constant glare of politics, around which campuses, families, and students can make their higher educational plans.

 *Presented as testimony before the SUNY Board of trustees in Buffalo on October 25, 1995; revised October 26 and again August 8, 1996.

Revised for Web 7/27/98