Strategic Communications and Marketing News Bureau

Illinois’ guaranteed-tuition law making college less affordable

CHAMPAIGN, Ill. — Illinois’ guaranteed-tuition law is causing tuition rates at the state’s public colleges and universities to escalate faster than they would if schools were allowed to adjust tuition rates annually, say two experts in higher education finance from the University of Illinois.

Under Illinois’ Truth-in-Tuition law, enacted with the fall 2004 semester, the state’s 12 public colleges and universities are required to charge incoming resident freshmen a fixed tuition rate for the first four years of college.

To gauge the policy’s impact on tuition rates, education professor Jennifer A. Delaney and Tyler D. Kearney, an associate director of the Office for Planning and Budgeting, examined tuition trends from 2000 to 2012 at four-year public universities of similar sizes and missions across the U.S.

Since the Illinois law was enacted, annual tuition rates at the state’s public schools increased by approximately 26 to 30 percent – or an average of $1,479, the researchers found.

Aggregate four-year tuition rates also increased by about 6 to 7 percent above the trends predicted for other institutions, according to the researchers’ analyses. A paper about their work, currently available online, will appear in the August edition of Economics of Education Review.

Guaranteed-tuition programs have gained popularity in recent years in response to mounting concerns about college affordability. In 2008, guaranteed-tuition programs were in place at 356 U.S. colleges and universities. By 2011, that number increased to 467 institutions, according to the study.

While Oklahoma and Texas also enacted guaranteed-tuition laws, schools in those states are required only to offer students the option of a fixed rate. Illinois’ policy is novel in that it applies to all four-year public colleges and universities in the state, the researchers said.

Proponents of the Illinois law said it was intended to contain spiraling tuition costs and promote affordability for Illinois families by providing predictable costs.

“There is growing interest and appeal in guaranteed tuition, as evidenced by the number of institutions that are electing to offer these programs,” Delaney said. “But if the primary intent is to promote affordability, rather than predictability, our results suggest that state-level guaranteed-tuition laws may not be entirely effective.”

Prior to the enactment of the Illinois law, average annual tuition rates at Illinois colleges and universities were trending similar to those in other states, the researchers found. In 2002, prior to the mandate, Illinois colleges ranked 13th nationally in tuition costs. However, by 2007, three years after the law was enacted, Illinois had risen to sixth place.

The researchers’ analyses showed that annual tuition increases were largest at master’s colleges and universities, such as Chicago State and Eastern Illinois universities, while increases were smaller at doctoral/research universities, such as Northern Illinois University and the U. of I.

The magnitude of the rate increases can be partially explained by tuition frontloading, the researchers said, which occurs when schools implement larger rate increases for incoming freshmen to ensure revenue stability and guard against projected inflationary risk during the latter years of fixed-rate plans.

Accordingly, the researchers said that frontloading complicates any comparisons of the annual rates charged by Illinois’ public universities with those of other institutions that are not subject to guarantee policies.

In a related study, published in the Journal of Education Finance, Delaney and Kearney examined the impact of state-level guaranteed-tuition laws on state general appropriations for public higher education. They found that since Illinois’ Truth-in-Tuition legislation went into effect, state funding for Illinois’ public universities declined by 20 percent, compared with schools in other states.

“It appears as though guaranteed-tuition policies have far-reaching effects, not only impacting how tuition rates are set within a state, but the overall financing environment for education as well, in terms of reduced state appropriations,” Delaney said.

The researchers hope that their findings will inform future discussions of guaranteed-tuition policies.

“There is certainly value in the predictability ensured by these programs,” Kearney said. “The evidence from our studies should be balanced against this value.”

Editor’s notes: To reach Jennifer A. Delaney, call 217-333-0807; email delaneyj@illinois.edu

To reach Tyler D. Kearney, call 217-333-6600; email tkearney@uillinois.edu

The paper, “Guaranteed Tuition Policies and State General Appropriations for Higher Education: A Difference-in-Difference Analysis,” which appears in the Spring 2015 issue of Journal of Education Finance, will be available online from Project Muse or from the News Bureau.

The paper, “The Impact of Guaranteed Tuition Policies on Postsecondary Tuition Levels: A Difference-in-Difference Approach,” which will appear in Economics of Education Review, is available online from ScienceDirect.

Read Next

Education Hands of a student writing in a book

Staff shortages exceed those for teachers in many Illinois public schools

CHAMPAIGN, Ill. ― Despite widespread concern that the pandemic exacerbated existing shortages of teachers, a new study of Illinois public schools indicates that need for other certificated staff such as teacher’s aides and social workers may have been a far greater problem for some schools. Paul Bruno, a professor of education policy, organization and leadership […]

Uncategorized

Three Illinois faculty named AAAS Fellows

Three faculty members at the University of Illinois Urbana-Champaign have been named 2024 Fellows of the American Association for the Advancement of Science.

Expert viewpoints Photo of John Schwenkler surrounded by screens showing digital data.

How can digital technology contribute to human flourishing?

University of Illinois Urbana-Champaign philosophy professor John Schwenkler is the director of the new Illinois Forum on Human Flourishing in a Digital Age, housed in the philosophy department. The forum — which offers an undergraduate course, graduate fellowships, a speaker series and seminars — aims to examine the challenges and opportunities of living in a […]

Strategic Communications and Marketing News Bureau

507 E. Green St
MC-426
Champaign, IL 61820

Email: stratcom@illinois.edu

Phone (217) 333-5010