Variable Pricing for SUNY Tuition?

June 28, 2010

This past week Governor David Paterson proposed as part of his budget extender an overhaul of the state university system that would allow individual campuses to set their own tuition rates. We’ve asked our Empire Page visitors and subscribers in our poll question of the week how they view the proposal which Legislative leaders and the higher ed teachers union have both rejected.

Edward Herman, chairman of the United University Professions Advocacy Committee at the University at Buffalo, argued in a letter to the editor of the Buffalo News that Paterson’s proposal “is contrary to the state university’s mission.” Herman claims that it “will not offer quality education for all segments of the population, and tuition will become more unaffordable for the low-income populace.” He also states that the proposal is contrary to the system’s strategic plan that the 64 campuses “work as an integrated system”.

I always find it disconcerting when a proposal like this is rejected out of hand in a matter of hours from its presentation. If UUP wants to oppose the plan, that’s their right, but perhaps they should have taken a little longer to consider it more thoroughly and to come up with arguments that hold water.

Let’s dismiss the second argument first. How giving local campuses the ability to set their own tuition rates would interfere with SUNY functioning as an “integrated system” is not clear. The system is made up of a variety of institutions — two year, four year and those specializing in unique curicculae (medical, forestry, etc.). Tuition already varies according to these factors. Why shouldn’t it also vary according to other factors, such as the quality of the education offered as measured by the grade-point average and test result scores of the applicants and the number of students applying to each campus?

For example, campuses that are not currently attracting as high a quality of student as they would like or a sufficient number to be more selective, could lower their tuition in hopes of making their campuses more desirable. Also, campuses which currently are in most demand could reduce that demand by increasing tuition, discouraging some students and families who are unwilling to pay the difference between attending that school and another one — either in the SUNY system or elsewhere.

How would such steps impact low income students and the quality of education being offered? In terms of low income students, these students do not pay out of pocket to attend college. If they have the academic credentials, the full weight of their attending college is paid for by the public. Variable pricing should have no impact on low income students abilty to attend a SUNY school.

Variable pricing is more likely to impact upper-middle-income families — those whose children do not qualify for financial aid or scholarships. Those families will be forced to evaluate their choices more carefully and decide how important it is to attend a school whose tuition is $2000 (to pick a number out of the air) more a year than another institution.

What about the quality of education being offered? What factors impact quality? One is the quality of the faculty that a school can attract. If a school increases tuition one presumes it would use the additional funds in threeeways — to increase the amount of financial aid it can offer low income students, to attract a better quality faculty and to improve the plant (buildings and grounds). Quality of education should thus be improved.

What about a school that has to lower tuition in order to increase the number of quality students that it is able to attract? Presumably it will succeed and as a result will find more of the students it accepts deciding to attend and thus increasing tuition income which can be spent on financial aid, upgrading faculty and upgrading buildings and grounds. Quality will increase.

How does this fit into the world where NYS cannot afford to support higher education in the manner to which it has done in the past? The SUNY system must continue the steps that have been taken to move from total dependence on taxpayers to operating more like private institutions. SUNY management must learn how to read balance sheets — i.e., to balance how much it spends against how much it brings in and not always count on the taxpayer to make up the difference.

Which would people prefer — budget cuts that eliminate entire campuses and programs or variable pricing that forces individual campuses to operate like other people in the real world are forced to operate? My vote is with the later.