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Tuition increase “holiday” could be over for Colorado students

College tuition costs could start rising more steeply under Gov. John Hickenlooper’s new budget plan, which would cut $20 million from direct state support of colleges and universities.

That cut, combined with predicted increases in college operating costs, could lead to average tuition increases of 8.7 percent for resident undergraduate students for the 2016-17 school year, according to Hickenlooper’s annual budget letter to the legislative Joint Budget Committee.

Tuition increases have been below 6 percent this year and last.

The administration is recommending that college and university boards be free to set 2016-17 tuition rates as they see fit, ending the past system of legislative oversight.

The governor’s recommendation is in line with a resolution passed last Thursday by the Colorado Commission on Higher Education, which voted 6-3 in favor of allowing college trustees to set tuition rates.

The proposal is sure to spark controversy during the 2016 legislative sessions. In 2014, lawmakers imposed a 6 percent annual ceiling on tuition increases for the 2014-15 and 2015-16 school years.

“Not having a tuition limit is very sobering,” CCHE chair Monte Moses said during last week’s meeting. He voted for the resolution, as did past chair Dick Kaufman. But Kaufman warned, “Be prepared to negotiate something with the JBC. … They will want some kind of line in the sand.”

Asked earlier last week about tuition-setting flexibility, JBC member Sen. Pat Steadman, D-Denver, said, “I think the General Assembly should have a role in setting tuition policy. It was too easy to shirk responsibility and give up that role in the guise of “flexibility” [in the past]. Yes, these decisions are hard, but they go with the territory, and they’re part of the job of elected policymakers.”

Dillon Democratic Rep. Millie Hamner, who will chair the JBC in 2016, said, “If institutions must increase tuition to backfill for the lack of state funding, they should also be prepared to explain what they can do to reduce student debt through strategies such as shorter completion time and more partnerships with school districts to reduce the need for remediation.”

Unlike K-12 schools, whose funding is partly protected by the state constitution and which can’t charge their students, the state’s colleges and universities are completely exposed to swings in the state budget and can use tuition to compensate for state cuts during downturns.

As state funding shrank after the 2008 recession, lawmakers threw colleges a lifeline with a 2010 law that gave institutions greater power over tuition than they had in the past.

That law set a 9 percent cap for five years but allowed the commission to approve larger increases if institutions provided detailed rationales for why they needed more money.

Most state colleges took advantage of that flexibility, and double-digit rate increases were imposed by some institutions.

Those rising tuition rates sparked concern among legislators, who took advantage of improving state revenues in 2014 to increase funding for higher education by 11 percent and also set that 6 percent cap on tuition increases for resident undergraduate students. The 2015 session also was able to increase higher education funding.

Tuition increases in recent years put pressure on student and family budgets and also came at a time when the state was trying to increase enrollment of low-income and first-generation students, for whom college costs can be a significant barrier.

The cap has led to moderation of tuition increases. The median percent increase in tuition was 5 percent for 2014-15, the lowest since 2006-07, when it was 2.5 percent.

This year state colleges and universities are receiving about $740 million in state support but raise more than $2 billion in tuition revenue. Hickenlooper’s budget plan would shave $20 million from that $740 million. The Department of Higher Education estimates that colleges’ fixed costs will rise by about $56 million in 2016-17, meaning institutions will have to cover $76 million with tuition increases.

While that translates to an average potential increase of 8.7 percent, possible tuition hikes at individual colleges are impossible to predict now. Boards of trustees make tuition decisions on several factors, not just revenue. For instance, institutions usually consider tuition rates at competing institutions, both in Colorado and outside, to avoid pricing themselves out of the market.

Different colleges also have different abilities to raise revenue. A big institution like the University of Colorado Boulder has a large enrollment and relatively high tuition already, so a small percentage increase can yield significant revenue. But a smaller, lower-tuition institution like Adams State University may need a larger percentage increase to raise the money it needs.

The debate over tuition focuses just on what’s paid by Colorado residents who are undergraduate students. Colleges long have had the power to charge what they like for out-of-state undergrads and for all graduate students.

Get the details on college costs in the Department of Higher Education’s most recent tuition and fees report.

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