updated: 5/13/2011 1:03:56 PM

[UPDATED] Panel Unveils Tuition Cap Recommendations

InsideINdianaBusiness.com Report

The Indiana Commission for Higher Education is recommending the state's colleges and universities keep tuition increases under 2.5 percent and not above 3.5 percent in the next two years. The commission is also asking institutions to carefully consider increases in "non-mandatory fees."

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May 13, 2011

News Release

The Indiana Commission Higher Education is urging the state’s colleges and universities to control tuition and fee increases for Hoosier students over the next two years in response to growing concerns about rising student loan debt and Indiana families’ ability to afford the cost of a college education.

The Commission’s recommended tuition and fee caps would hold the majority of Indiana college campuses at or below a 2.5 percent annual increase with no college exceeding a 3.5 percent cap for the 2011-12 and 2012-13 academic years.

“Meeting Indiana’s college completion and workforce demands depends on our ability to preserve access to an affordable, quality higher education,” said Teresa Lubbers, Indiana’s Commissioner for Higher Education. “While Indiana colleges have significant operational expenses, increasing efficiency should be prioritized over increasing costs for our student consumers.”

The Commission’s recommended tuition and fee cap targets reflect analysis of a variety of financial indicators and discussions with representatives from Indiana’s college and universities, state policymakers and national experts. The resulting recommendations attempt to strike a balance between the unique mission and operational realities of each institution with the need to ensure affordable access to college for Hoosier families. The Commission was given the authority to set non-binding tuition targets by the Indiana General Assembly for the first time in 2009.

Controlling College Costs

Over the past decade, tuition rates at Indiana’s taxpayer-supported colleges have increased by nearly 100 percent while Hoosier incomes have grown by less than 1 percent on a per capita basis. Though rising tuition costs are a national concern, Indiana’s situation is particularly serious given that Hoosier incomes continue to lag behind the national average, ranking the state 41st in per capita personal income in 2010.

“The facts are clear: college costs cannot continue to increase at the present rate without the risk of our low- and middle-income students being priced out of higher education,” said Lubbers.

Nearly two-thirds of Hoosiers graduate with college debt, and Indiana now ranks 13th highest in the nation for the average amount of student debt. While the Indiana General Assembly has continued to increase funding for state financial aid programs in spite of the national economic recession, higher enrollments and increasing demand for aid dollars has lowered the per student state grant amount, which often results in students having to cover more costs out-of-pocket or take on more debt.

Highlighting Variable Tuition Rates & Non-Mandatory Fees

While the recommendations would limit base tuition rates and mandatory fee increases for Hoosier undergraduate students, the Commission is asking Indiana institutions to be mindful of other, less apparent costs. Though the Commission recognizes that some degree programs require additional investments, institutions should avoid shifting the cost of overall academic instruction to specific student populations.

Likewise, the Commission is asking institutions to carefully consider increases in “non-mandatory fees” like room-and-board and lab fees which can amount to hundreds of additional dollars in annual expenses for students on some campuses.

Comparing College Costs

To support Hoosier students and families in understanding the true cost of college, the state launched Learn More Indiana’s College Costs Estimator as a free service earlier this year. Available at IndianaCollegeCosts.org, the service offers side-by-side comparisons of college costs at each Indiana campus, both public and private, with customized estimates that show how much students should expect to pay out-of-pocket once various sources of financial aid are taken into account.

The federal government has required all higher education institutions to make a “net price calculator” available on their websites by October 2011. Net price is defined as the total cost of attendance (tuition and fees, room and board, books and other expenses) minus grant aid (includes need- and merit-based aid but not loans). Learn More Indiana’s College Costs Estimator is intended to meet the federal mandate on a statewide basis for Indiana institutions that choose to use the state service to fulfill that requirement.

Reaching Higher in Indiana

The Indiana Commission for Higher Education’s tuition and fee recommendations are driven by the principles of Reaching Higher, the state’s strategic plan for higher education. Reaching Higher sets clear goals and targets for improving college preparation, affordability, completion and economic development through the state’s higher education system. Learn more online at www.che.in.gov.

Source: Indiana Commission for Higher Education

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