Erik Dartsch Professor Peter Epps Comp II 25 April 2014 A Policy Reform: Unbundling Student Fees In recent years,

the rapid increase of college tuition costs has affected millions of Americans. Students are currently paying for services that do not help them earn their degree. Although changes such as new technological advancements and improved facilities are valid reasons for tuition increases, as well faculty wages and the simple cost of inflation, the numbers do not add up to the rate at which tuition has increased in recent years. There are several factors that make rapid tuition increases seem unreasonable like unnecessary fees for amenities on campuses. On the other hand, however, there are several arguments justifying some of the increases. Seeing as this is a very large topic to tackle and the outcome would have a great effect on millions of people, breaking down the problem and presenting a solution that is realistic is necessary. The rapid increase in tuition costs is a problem that will not be solved unless Oklahoma State University does things differently. Therefore, Oklahoma State University should set tuition fees that directly correlate with the cost of educating students, resulting in reduced tuition costs. The rapid increase of college tuition in the U.S. is a growing problem that needs to be addressed. As Dr. Richard Levins explained, at one time it was actually plausible for a college student to pay their way through college unfortunately this is no longer a reality for most students (Levins, College Is No Longer Affordable). Tuition rates have a major impact on a students choice of which school they will attend. Students should not be denied the right to an

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education due to the rapid increase in tuition costs. Tuition rates have risen at a rate greatly in excess of the rate of inflation, making it nearly impossible for many middle and lower-class students to attend post-secondary educational institutions. This problem is not new by any means. The total per-student price for attending a four year public school increased 109% from 1987 to 1996 (Harvey 7) as James Harvey points out. There are several reasons behind the rapid increase in tuition and examining those price drivers will explain how there is a better way to charge students for their education. Five main factors recognized by Harvey explain the recent rapid increase in college tuition costs: faculty, facilities, technology, regulations, and expectations (Harvey 11). In recent years, universities have attempted to reduce faculty costs by employing more part-time instructors. However, most universities have maintained the same number of full-time instructors while hiring additional part-time staff. Adding more part-time staff has resulted in a rise in the number of staff positions and faculty expenses for universities, directly affecting the students costs of tuition. Facilities are another major price driver for colleges. The growing number of students enrolling in higher education institutions has forced universities to accommodate students by building new laboratories, dorms, and classrooms. In addition to expansion expenses, colleges have also had to redesign facilities in order to accommodate students with special needs. The recent use of more technology in classrooms is another important factor to consider. Highdefinition projectors, online classrooms, and expensive laboratory equipment are just a few examples of the major expenditures that public universities have had to make in recent years in order to stay competitive with more expensive private universities. Regulations have affected university spending as well. Universities are required to comply with environmental, personal, and facility regulations. Stanford University estimates that nearly $20 million is spent each year

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complying with regulations (Harvey 11). Clearly universities are spending much more money to meet regulations now than they had in the past. Lastly, student expectations have pressured universities to spend money on commodities such as large gym complexes and elaborate pools. Recognizing that there are several factors that could explain why universities are being forced to spend more money is vital to understanding the issue of rising tuition costs. However, although tuition rates are increasing, enrollment rates have been higher in recent years than ever before. The elasticity of tuition explains the demand students have for an education relative to tuition. Bryan Glenn researched the elasticity of tuition in an attempt to find out what students are really willing to pay for their education. Glenn found that the majority of universities base their tuition rates on of a combination of things: student retention, expenses, and revenue (Glenn 561). Glenn discovered that tuition is rather inelastic, meaning that even though colleges are increasing their rates, students are still willing to pay. Glenn studied Mount Vernon Nazarene College to examine their retention and enrollment rates in comparison with their tuition rates. When tuition rates rose rapidly, there was only a minor decrease in student enrollment. As the tuition increased however, the percentage of upper-class students began to rise, as the number of middle and lower-class students started to decrease. From a business perspective, it would make sense for universities to charge more money if it only has a small impact on enrollment rates. But rather than setting their tuition rates based on enrollment rates and revenue, universities should attempt to make education affordable to as many students as possible, while maintaining the costs of expenses and bringing in necessary revenue. The idea behind unbundling fees is to separate all the fees and make them optional rather than forcing students to pay a large bundled fee. It would be in the best interest of the students at Oklahoma State University to see their tuition fees directly affect the education they are

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receiving by unbundling the fee structure. All students are paying for services that not all students are using. The Colvin, Daily OCollegian, and other amenities such as the OSU Botanical Garden are all things that students are required to pay for when enrolling at Oklahoma State University. I suggest a policy reform that would change this, in order to make a college education more affordable to students, while offering additional resources for additional, optional fees. A student who never uses the Colvin Annex should not be required to pay for it during the four or more years they are in college. Additional perks like the Colvin, and other facilities on campus should be paid for by additional fees and not be included in mandatory fees for every student. Students want to pay for an education. Students dont want to be forced to pay for an elaborate gym complex or a daily newspaper. The policy reform does not suggest or require that we remove these great resources from campus, but rather allow them to be optional for students to pay for. The Colvin, for example, could provide a reduced-rate membership for students who want to use a gym, and the daily newspaper could be sold to students who are willing to purchase it. Unbundling fees would allow students to pay for specific things rather than everything being packaged into one large fee as it is now. If this policy reform were implemented, it would reduce the tuition rates and allow more students to attend Oklahoma State University who otherwise would be unable to. Another major problem that students face when paying for college is unanticipated expenses. Margaret Mannix points out the fact that students are already burdened with several additional expenses that come with being a college student. Mannix mentions that, textbooks, computers, rent, travel expenses, and credit cards (Mannix, 58) are major additional expenses for college students. Although not all students pay for these things, many do. The unanticipated expenses for college students can cost a student anywhere from hundreds to thousands of dollars

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per semester. The additional hidden costs of college creates additional financial burdens for families and can lead to students dropping out. If the tuition rate at Oklahoma State were reduced, it would reduce the financial burdens that many students face. Another important thing to note is the travel expenses for out-of-state and international students. International and out-ofstate students are struggling as it is, and paying inflated tuition rates make visits home that much more difficult to afford. When considering a policy reform to reduce tuition by unbundling fees, it is important to consider the income level of students as well. Michael Coelli held a study comparing several universities in Canada to see which students were affected by tuition increase the most. Coelli found that when tuition was increased the university saw a significant decline in enrollment among students from low-income families. He also found that when universities froze their tuition rates, a higher number of low-income students enrolled. Coellis study demonstrates how expensive universities deny education to students from low-income families. This policy reform would not only help low-income students, but would benefit nearly all students. Families with higher incomes are not affected as much by the rapid increase; however, the lower-income families are directly affected. According to the National Postsecondary Student Aid Study, approximately 66% of students attending four-year public institutions receive financial aid each year (Harvey 3), but even financial aid cannot always help those who are already struggling financially. If universities set their tuition at a more reasonable rate by unbundling fees, financial aid would have a large impact on helping students make it through college. Financial aid certainly helps students, but at a much less extent than it did in years past. One potential solution that could make college more affordable is to institute a costrelated tuition policy. A cost-related tuition policy would consist of having students with higher-

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cost majors pay higher tuition rates and students with lower-cost majors pay lower tuition rates, according to Jung Cheol. Cheol explored the idea of charging students tuition on a basis more related to their major. Cheol suggested that engineering students would be more willing to pay higher tuition because they have higher expected financial returns with their degree than a student with a Humanities degree, for example (Cheol 722). The idea behind this is that students with degrees that will bring in smaller financial returns in their future careers should be charged less because they have lower expected financial return than other majors. College students should choose their own majors based off of their interests and passions, understanding the potential careers that go with those majors. This policy reform will not force students to spend their tuition on unnecessary services that are not vital for their education. Many could argue that OSUs Botanical Garden and newly renovated Student Union are great amenities that help attract prospective students, but they are really not necessary. Classrooms, laboratories, professors, and textbooks are all necessary for a student to get a full education at a university, but large gym complexes, botanical gardens, and other luxuries of that nature are completely unrelated to a student getting an education. Spending hundreds of thousands of dollars of students fees on guest speakers is another controversial topic. Universities should at least give the students the option to decide to pay for these expenses. Joe Meyers explains the importance of having the Botanical Garden here in Stillwater in his article in Academic Universe. The Botanical Garden provides a place where visitors discover the world of plants; a gathering place that accommodates a range of activities, from learning to recreation to community events. (Meyers 373), but it should by no means be the students responsibility to pay for an additional facility such as this to the community. Students would like to think that their tuition fees would be contributing to the university in a way that would help

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them further their education, but in reality that is not what is happening. Unquestionably, a major portion of tuition and fees does go to the facilities, faculty, and other important services provided by an educational institution, but much of it pays for unnecessary conveniences like overpriced guest speakers. A policy reform would allow students to know that what they are paying for is directly improving their education. The discussion about college tuition increases in recent years has grown and become a main source of criticism for many universities. The reality is that even though tuition is fairly inelastic; as Bryan Glenn found out, there will be a time when tuition costs reach a point of increase where students will no longer be willing (or able) to pay for college. Dave Marcotte explained how the need for higher education has become even more important in recent years, but students can no longer afford it. For many years the conventional wisdom was that students who go to community college would not be able to earn as much when compared to students who attend public or private four-year universities, but Marcotte disproved that theory with his research. Marcotte found that community college enrollment rates are higher than ever before because of the recent increase in tuition costs at major academic institutions. Not only are the misconceptions about community college fading, but Marcotte found substantial evidence that a community college education has positive effects on earnings among young workers (Marcotte 160). A policy reform needs to be put in place in order to keep traditional four-year academic institutions from failing as a result of high tuition costs. Based on the information above, it is clear that increasing tuition rates is a major problem that needs to be addressed. Although going to a four-year college is not required, many students would rather attend a four-year institution than a two-year community college program. College should be available to everyone, with tuition set at a reasonable rate. Attending college was once

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affordable for students, as Dr. Levins pointed out, but that is no longer the truth. Much of the recent tuition increases can be attributed to factors like faculty, facilities, technology, and regulations, as James Harvey discussed. These expenses are necessary to run academic institutions, and many students will still be willing to pay higher tuition fees. However, the lowincome students will be deprived of the opportunity to pursue a higher education. A policy reform that would make all non-educational resources and expenses at Oklahoma State University optional to students is necessary to allow everyone the opportunity to achieve a higher education. There are already many costs associated with college that students do not anticipate when enrolling, so every dollar really does count. The policy reform would also benefit those pursuing degrees with lower financially-returning future careers. In addition to this, no student would be forced to pay for extra services that they do not need in order to further their education. Of course things like newspapers, gym complexes, and gardens are great amenities on campus, but it should not be the students responsibility to pay for them. The non-academic-related resources provided by the university should not be removed, but rather, students should be able to make the decision of whether they want to use them, whether it be buying a gym membership or purchasing a newspaper. The rapid increase of tuition is a problem that cannot be resolved unless we act now. Therefore, Oklahoma State University should set tuition fees that directly correlate with the students education and nothing else by unbundling fees. When this happens, the result will be a decrease in tuition for OSU students. The potential reduction in tuition will not only affect the students at OSU, but it will also affect their families. College is stressful enough as it is for parents and students alike. Not being able to make ends meet due to financial issues is a significant additional burden for a student to carry. One must realize that this policy reform

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would not reduce tuition fees greatly. This is true because of the ever increasing expenses a university like Oklahoma State needs to cover. However, even making a small reduction in the cost of tuition fees, by unbundling fees would give students the freedom of deciding what they want to pay for.

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Works Cited Bryan, Glenn A. Tuition Elasticity of the Demand for Higher Education among Current Students: A Pricing Model. The Journal of Higher Education 66.5 (1995): 560-74. JSTOR.Web. 05 Mar. 2014. <http://www.jstor.org/stable/2943936>. Coelli, Michael B. "Tuition Fees and Equality of University Enrolment." The Canadian Journal of Economics / Revue Canadienne D'Economique 42.3 (2009): 1072-099. JSTOR. Web. 05 Mar. 2014. <http://www.jstor.org/stable/40389499>. Harvey, James. "Intro & "Cost and Price Drivers" in Higher Education." Straight Talk about College Costs and Prices: Report of the National Commission on the Cost of Higher Education. Phoenix, AZ.: Published at the Request of the National Commission on the Cost of Higher Education by the American Council on Education and the Oryx, 1998. 112. Print. Levins, Richard, Dr. & Acuff, Stewart Why College Is No Longer Affordable. Stewarts Blog. Stewart Acuff, 29 June 2012. Web. 05 Mar. 2014. <http://stewartacuff.com/dr-richardlevins-why-college-is-no-longer-affordable/>. Mannix, Margaret, and Jodie T. Allen. "The Hidden Costs of College." What College Really Costs. Naperville, IL: Source, 2005. 57-64. Print. Marcotte, Dave E. "The Returns of a Community College Education: Evidence from the National Education Longitudinal Survey." Educational Evaluation and Policy Analysis 27.2 (2005): 157-75. JSTOR. Web. 05 Mar. 2014. <http://www.jstor.org/stable/3699524>.

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Shin, Jung Cheol. "Student Response to Tuition Increase by Academic Majors: Empirical Grounds for a Cost-Related Tuition Policy." Higher Education 55.6 (2008): 719-34. JSTOR.Web. 05 Mar. 2014. <http://www.jstor.org/stable/29735217>.