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HIGHER (cost of) EDUCATION: Students' college burden continues to rise in Indiana

May 23, 2005

With state funding flat and operating expenses rising, Indiana's public universities are turning to a familiar source to make up the difference-students.

Tuition and mandatory fees at state institutions are set to climb an average of 5 percent next school year and higher in 2006-2007, if proposed rates stand.

That's a far cry from the double-digit increases most universities imposed just a few years ago, but observers say it's worrisome nonetheless.

"Tuition has been rising at twice the rate of inflation. It is much more expensive for young people to go to college now," said Stan Jones, the state's commissioner for higher education. "They're finding a way-working more, taking out more loans, depleting their parents' savings-but I continue to be very concerned."

Indeed, Indiana's public colleges are relying less on public money than ever before. In 1992-1993, Hoosier students paid about 40 percent of the cost of higher education. Ten years later, their share had reached nearly 50 percent.

"It is very frustrating to see that trend continue," said Bob Dickeson, senior vice president of policy at the Indianapolis-based Lumi- na Foundation for Education. He has studied the issue as part of the agency's effort to address college affordability. "Indiana does not look very good."

Dickeson tossed out more numbers to make his point: Only 11 states ask students to pay a greater portion of higher-ed expenses, and the average U.S. student's contribution in 2004 was only about 36 percent.

Indiana's half-and-half approach comes despite the fact that the state increased appropriations for higher education 53 percent-also 12th in the nation-from 1995 to 2005, said Lara Couturier, a Rhode Islandbased education researcher and consultant.

"University budgets are growing faster than state appropriations," Couturier said. "That doesn't mean states have abandoned their commitment to higher education. ... Institutions are increasing tuition because they feel the need to have more revenue. Maybe they have a responsibility to control their costs a little bit better."

Easier said than done, officials said.

Operating budgets-which cover everyday expenses like compensation and utilities-are increasing independent of programs, they said in a near-unanimous refrain.

Simply put, it just costs more to do business from year to year.

"There are very few new initiatives," Purdue University President Martin Jischke told IBJ. "We are trying to maintain what we have already accomplished."

"The costs over which we have no control continue to escalate," concurred Ball State University spokeswoman Heather Shupp.

"We have found a number of ways to reduce costs," asserted Indiana University spokesman Larry Macintyre. "But the bills still go up every year."

Still, colleges do invest in programs-keeping computers on the cutting edge, for example, is an expense unto itself.

"Technology is probably one of the greatest challenges all of us have," said Phil Rath, vice president of finance and government relations at Vincennes University. "That consumes more of the budget today than it ever has. We have to be able to support the kind of quality services students expect."

But, those expectations drive costs up.

Dorms are no longer the "concrete mausoleums" of H. Ray Hoops' formative years. But college students today want more-even if it's more expensive, the University of Southern Indiana president said.

"It's like walking a tightrope, really," Ball State's Shupp agreed. "We're trying to meet students' needs and maintain affordability."

Jischke said universities are looking to reduce operating costs and maximize various revenue streams. But what the state can't pay for, someone else must.

"Our strategy at Purdue is to improve the quality of education, and that does take more resources," he said. "A pretty significant part of our revenue is not growing at all, so the other side-tuition-is going to have to carry most of the cost increases."

Public colleges also have turned to fund raising as an additional source of revenue. And they're doing well. Of the top 20 university fund-raising campaigns listed recently in the Chronicle of Higher Education, 11 were on behalf of public institutions.

But while private colleges count on contributions to help pay everyday expenses, most publics haven't quite made that leap. Instead, gifts typically are used to establish so-called "margins of excellence"-extras that state funding and student tuition can't cover.

"We look at gift income from a different perspective," said Judith Palmer, IU's chief financial officer. "Private money may support a specific program, but it doesn't necessarily go into the general fund."

That's pretty much how donors intend it, said Eugene Tempel, executive director of IU's Center on Philanthropy.

"Most private money does not go into day-to-day operating expenses," he said, because nearly all of it is earmarked for a particular program. "Philanthropy is one of the ways higher education has become excellent. It funds things at the margin."

Which isn't to say universities wouldn't use the money if they could. And sometimes, donors do find ways-through endowed faculty positions and scholarships, for example-to ease the strain.

Finding someone to help pay the gas bill is another matter, Tempel said.

"Donors are simply not interested in that," he asserted. "They think that is the state's responsibility."

You can't just backfill the budget with private funds," agreed Indiana State University spokeswoman Teresa Exline.

Maybe not, but universities aren't powerless, either, Dickeson said.

"They can work more on the expense side of the ledger," he said. "I'm all for excellence, but you don't have to be excellent at everything. There isn't a campus in the state that wouldn't benefit from a good spring cleaning. ... A lot of schools try to be all things to all people. We can't afford that."
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