Pope Center commentary contends costs outweigh benefits with guaranteed tuition plans

Stephanie Keaveney devotes a Pope Center commentary to the problems associated with recent proposals for guaranteed tuition.

Amid what appears to be a national crisis of student debt, legislators and higher education leaders have clamored for a more affordable route to a bachelor’s degree.

Guaranteed tuition programs are among the innovations gaining traction. More than 300 colleges offer these programs, and a group of North Carolina legislators wants to explore whether to add the state’s 17 public universities to the growing list.

North Carolina House Bill 657, which was introduced last year, instructs the UNC System’s Board of Governors to “study the establishment of a fixed tuition program as a payment option at the UNC system schools,” asserting that “the citizens of North Carolina would benefit greatly….”

Tuition guarantee programs may seem like a good idea at first glance, but there are potential negative consequences for both students and universities. Under a guaranteed tuition plan, students are promised a constant rate of tuition for a limited time while they pursue their degrees. But the details of these plans vary widely, and some are more effective than others.

The Illinois University System was one of the first public school systems to launch tuition guarantees in 2004. Under its program each public university is required to adopt a tuition plan that holds tuition constant for four academic years (or more for designated five-year programs) for first-time in-state students. Similarly, both Western Oregon University’s “Western Promise” program and the University of Kansas’s “tuition compact” offer a four-year flat rate, but extend a similar option to out-of-state students as well, at a higher rate.

By enrolling in guaranteed tuition programs, students and their families essentially take a gamble, which may or may not pay off. Students who choose a guaranteed program agree to pay a surcharge—often ranging from 5-15 percent over standard tuition—on the assumption that standard tuition will rise beyond that in the ensuing four years. However, if state legislators invest more in higher education, or if the student doesn’t earn a degree, guaranteed plans can cost students much more than standard tuition.