Failing grade
Pitt, PSU not curbing tuition costs In this severe recession, the recent announcement by the state treasurer’s office that it’s instituting a tuition surcharge for its premier college savings program came as especially tough news.
The state’s 529 Guaranteed Savings Plan or GSP is a great idea. Under the plan, families can lock in tomorrow’s tuition at today’s rates. The program gives families a powerful incentive to save in advance, instead of taking on massive loans later.
Treasury officials had to act, as the investments being made by families were simply not keeping up with tuition growth.
That’s partly due to the stock market. A bull market would cover a multitude of sins.
But the bear market has revealed differences in the ways that colleges manage their finances, because the new premiums are not the same across the board. They were set by looking at the history of each school’s tuition increases. Thus the premiums are a kind of report card on each college’s efforts to control tuition.
At the head of the class are the State System of Higher Education universities and community colleges. They did not need any surcharge at all.
Let’s give them an A.
Part of that is due to continued state aid. Gov. Ed Rendell has, rightly, made funding state educational institutions a priority.
Still, Shippensburg and Millersville universities, Harrisburg Area Community College and their brethren deserve our praise. They have kept tuition in check so effectively that a family’s contributions to the GSP program are keeping up with anticipated tuition in the future.
Private schools have not done quite so well, but clearly have had success in holding down costs. Messiah, Lebanon Valley and Elizabethtown colleges all drew a 2 percent premium.
Let’s give them a solid B+.
Then, we have Penn State University and the University of Pittsburgh. Treasury had to slap its highest premium of 8 percent on each of these state-related schools, in order to have a family’s contributions keep up with their past and anticipated tuition hikes.
Both have had some difficult years. Gov. Rendell and the state Legislature have cut funding to the state-related schools five years out of the last nine. In fact, state aid last year to Penn State was only 3 percent higher than in 2000-01.
That would be a big challenge to any business, yet many businesses are indeed running leaner than they were at the end of the go-go ’90s.
State-related Temple University saw similar reductions in state aid, yet Treasury had to assess only a 2 percent premium for Temple-bound students.
Penn State and Pitt are like businesses that continue, year after year, to raise their prices by two or three times the rate of inflation (or more – the consumer price index fell by 2 percent during the last 12 months).
What grade do they deserve? Probably not one to make their parents proud.
Families today are tightening their belts and businesses are cutting costs.
In this environment, colleges that have historically done a good job in containing tuition deserve our praise. Large enrollment increases at colleges such as HACC this fall prove that students value this, too.
Penn State and Pitt have faced unique challenges. But as Temple has proved, they can do a better job of meeting them and giving students and taxpayers the maximum value for their dollars.
The (Harrisburg) Patriot-News