Page 63 - Crisis in Higher Education

Underlying Problem • 37

Second, there was a 14% increase in student enrollment from 2006
to 2010, so total tuition and fees grew by 14% because of higher enroll-
ment, so this overstates the increases if the intent is to compare the
changes in costs between 2006 and 2010. This can be adjusted by
2
including only 86% of the tuition and fee costs and recalculating the
2010 numbers. When tuition, $1,483.9 million, for 2010 is multiplied by
86%, the result is $1,276.2 million. In a similar manner, the fee expense
for 2010 is reduced to $186 million. When this enrollment adjustment
is made, tuition and fees jumped by 45% and 108%, respectively, and
these are still very large increases. See the enrollment adjusted (EA)
data in Table 2.1.
Third, in response to the great recession, many states cut funding for
public colleges and universities, and these institutions responded with
larger than normal increases in tuition and fees. Colorado cut state funding
for higher education substantially from $555.3 million in fiscal year 2006
to $324 million in 2010, a decline of $231.3 million. To cope with this cut,
it is assumed that public colleges and universities in Colorado increased
2
tuition and fees to cover this shortfall. So as not to penalize these institu-
tions because of a state-mandated funding cut, the 2010 amounts for tuition
and fees are further reduced by a total of $231.3 million. Because tuition is
87% of the costs of tuition and fees, $201.2 million ($231.3 million multi-
plied by 0.87) is subtracted from the already reduced 2010 tuition revenue
in Table 2.1. Similarly, 13% of $231.3 million, or 30.1, is subtracted from
the already reduced 2010 fee revenue. See the state funding adjustment
(SFA) data in Table 2.1.
These assumptions and adjustments seem fair and reasonable, and they
provide data to assess how public colleges and universities in Colorado
managed underlying cost pressures during this period. The results in
Table 2.1 show that tuition increased by 22% and fees increased by 75%
from 2006 to 2010 after these adjustments were made. These increases
are much faster than the rate of inflation as CPI increased by only 8%
during this period. The adjusted data also show that fees rose faster
9
than tuition. Whereas tuition increased nearly three times faster than
inflation, fees increased more than nine times faster than inflation.
The more rapid increase in fees is further illustrated by data in Table 2.1
showing that fees as a percentage of total costs went from 9% in 2006
to 13% in 2010.
In addition to examining how student fees have changed over time, the
Office of the State Auditor’s Report dug deeper and considered important