CMU’s tuition costs rank well above increasing national median

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CMU ranks $3,747 above the national median when it comes to annual tuition rates.

According to the Chronicle of Higher Education, CMU has the fifth highest rate of in-state tuition and fees among Michigan’s four-year public universities at $10,380 per year. The national median of $6,633 has seen annual increases.

David Burdette, vice president of Finance and Administrative Services, said tuition rates have increased nationwide for two reasons.

The cost to do business at universities has increased because of employee contracts and inflated costs of goods and services, he said. Secondly, diminished revenue sources at the state level result in less state funding for higher education.

“So when you look at those two facts, tuition is one potential way to keep the university going,” Burdette said.

CMU’s tuition rate of $346 per credit hour is a 220 percent increase from the 2000-01 rate.

Lawrence Brunner, associate professor of economics, said college tuition rates are rising faster than the general rate of inflation. The Consumer Price Index illustrates the trend.

An item in 2009 costing $3.29 would only cost $1 in 1978, according to the average of all items bought by the average urban consumer. However, for every $1 spent for tuition in 1978, — the earliest year the CPI has data available online — $10.13 was spent in 2009.

“So for a long time, both through good times and bad, college tuition has been rising much faster than other things,” Brunner said in an e-mailed statement.

The recession has been worse than anything seen since 1980-82, he said, but the economy is not the only culprit for rising tuition rates.

Brunner cited the Baumol Effect to explain the phenomenon. The theory asserts employers raise employees’ salaries to stay competitive with other fields in which salaries are rising because of labor productivity increases, even when their own productivity is not rising. Universities then increase tuition rates to foot the bill of inflated wages.

Burdette said the president and the trustees take the tuition rate very seriously.

“We are competitive and we are price sensitive to students,” Burdette said. “We know the cost of attendance and what it does to students, and the families and we always want to appreciate that.”

Steve Smith, director of public relations, said configuring the tuition rate is a “crazy process” because CMU administrators have to balance funding needs and affordability for students.

“It’s not just what the tuition rate is,” Smith said. “It’s, ‘How do we help make a university education accessible to students who qualify but can’t afford it, or their parents can’t afford it?’”

Smith said the state requires that if tuition rates are increased then need-based financial aid must be augmented by an equal percentage.

Burdette said the board of trustees made a statement two years ago when they approved increasing the need-based financial aid fund by $700,000 more than the state mandated.

The pending budget deficit in government and the likely decrease in future revenues from the state prompted CMU’s president to adopt that policy for future budgeting cycles, Burdette said.

“President Ross has made it very clear we’re going to do everything we can to help mitigate the absolute price of tuition with appropriate merit and need-based financial aid,” he said.

Looking for efficiencies in university programs and processes is another way CMU administrators keep the tuition rate down. Smith said that is what drives the force behind the recent academic prioritization process.