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Strategic Budget Advisory Committee (SBAC)
Strategic Budget Advisory Committee

Freeze in MD Tuition Could be Tough Sell

Legislators worry that cap limits growth for state's universities

February 01, 2009

By Stephen Kiehl and Gadi Dechter - The Baltimore Sun

The freeze on state university tuition - which Gov. Martin O'Malley wants to extend into a fourth year - is sure to score points with recession-weary voters. But critics wonder if it's in the best interests of the universities.

Keeping tuition artificially low limits growth at a time when colleges are seeing record numbers of applications, and it stalls university improvements. And while state university students benefit from the freeze, those attending community colleges are not as fortunate. O'Malley has not provided money to hold the line on tuition for the 128,000 credit-earning students at community colleges.

The governor is up for re-election next year, and keeping tuition steady for the length of his tenure would be a tidy political victory to run on - especially when he will likely face criticism for raising taxes and failing to lower electricity bills. But the freeze is not final yet. It must be approved by the state legislature, where some are raising questions.

Senate President Thomas V. Mike Miller, a famously loyal University of Maryland alumnus, said he thinks that O'Malley has "gone overboard" with the freeze and is setting the stage for a huge tuition increase.

Miller said just as electricity rates soared when rate caps were lifted in recent years, "I'm afraid that's liable to happen in the university system" when tuition restraints are eventually lifted. "Colleges should be allowed to raise tuition in line with costs," Miller said.

House Speaker Michael E. Busch said he is worried that O'Malley's focus on university tuition could shortchange community colleges, which have seen their operating state aid cut this year. "We don't want to be in a position where we hold the line on tuition costs for four-year [schools] and then have to have tuitions increase at community colleges," Busch said.

But O'Malley says the freeze - which would cost the state $16 million next year - is about keeping the state competitive and higher education accessible. In delivering his State of the State address last week, he introduced two University of Maryland students who would graduate without seeing a single tuition increase if his plan is approved.

"Is affordable college about politics?" O'Malley asked legislators. "You're darn right it's about politics. It's about the politics of inclusion. It's about the politics of prosperity. ... It's about the politics of my kids and yours."

When the state began the freeze, tuition at public universities in Maryland was the sixth-highest in the country. If the freeze is approved for next year, the state is expected to rank 18th. Maryland's tuition had soared earlier in this decade. Tuition at the state's flagship public campus in College Park rose 44 percent in four years. It now stands at $8,005.

In the 2006 gubernatorial race, O'Malley made freezing college tuition a centerpiece of his campaign against then-Gov. Robert L. Ehrlich Jr. O'Malley pledged to a College Park audience that he would "earmark dollars" for higher education even when his budget was thin. The stance polled well and resonated with middle-class families stung by tuition increases.

State Sen. Jim Rosapepe, a former university system regent, says the freeze should continue until the state falls to the national median in tuition. In 2007, tuition in Maryland averaged $2,000 above the national median, according to the U.S. Department of Education. He said the increases in the past made it much harder for middle-class families - whose tax money "built these universities" - to afford college.

Rosapepe, a Prince George's County Democrat, said O'Malley should make the tuition freeze an issue in next year's campaign. "I hope he brags about it when he runs for re-election," Rosapepe said. "He should brag about it, because it's a big deal."

There are costs, though, beyond the $16 million the state must pay to continue freeze. The president of Salisbury University, one of four state universities designated for growth, said the size of her freshman class this fall will be the same as last fall because the budget doesn't provide for expansion. She's also worried that as the faculty-student ratio goes up because of a hiring freeze, more students will drop out because they won't get the attention they need.

"As class size increases, because we aren't able to hire the faculty we would like to hire, there is an impact on quality," said Janet Dudley-Eshbach, the Salisbury president. "Last fall we had over 7,300 applications for 1,200 seats here. That is the downside [of the tuition freeze]: It's very difficult to meet that strong demand."

Community colleges, which get about a third of their funding from the state, have not set tuition for next year but say it is likely to go up without more state money. About half of undergraduate students in Maryland attend a community college.

"I'm not opposed to restraining tuition at universities," said Clay Whitlow, executive director of the Maryland Association of Community Colleges. "I just don't understand why there doesn't seem to be any concern for our students as well."

The state Board of Regents has authority to set tuition for each of the 11 public university campuses. Annual tuition ranges from $5,140 at Coppin State University to $8,780 at the University of Maryland, Baltimore County. While tuitions differ, in recent history increases have been the same percentage at each campus.

For the past three years, the regents have agreed not to raise tuition if the governor gave them extra money to cover the amount the system would gain from a 4 percent increase. For the next fiscal year, the figure is $16 million. If the legislature cuts the money from the budget, the system would be free to raise tuition.

Before the governor announced his freeze, the regents had been considering increasing tuition by different rates for different campuses - so the University of Maryland, College Park, for instance, where many students come from upper-middle-class families, would see a higher increase than perhaps Bowie State University, a historically black institution.

At the top schools, some of the increase would have gone toward need-based financial aid, with the rest toward academics and facilities.

"The flagship universities tend to enroll relatively high-income students," said Sandy Baum, a senior policy analyst at the College Board and economics professor at Skidmore College. "If we keep tuition down at the most desirable state universities, we're subsidizing these very affluent students who could clearly afford to pay more, and there's less money to improve programs and for need-based aid for students who couldn't afford even the lower tuition."

There is some evidence to support the subsidy argument: A 2006 study by economists at the University of Georgia suggested that when Georgia began offering HOPE merit scholarships to keep high-achieving students in-state, some upper-income families used the savings to buy cars for their children.

Rather than freezing tuition for everyone, Baum said, Maryland should focus on providing need-based aid for low-income families.

"The most important thing is providing access to people who otherwise wouldn't have it," she said. "The most important thing isn't keeping tuition down at the University of Maryland for families earning $100,000 or $150,000 a year and who could afford another $1,000."

The state university system chancellor, William E. Kirwan, acknowledged that many students at College Park could probably afford to pay more. But he said the state's goal is to become a moderate-tuition state, and it needs to continue in that direction. Furthermore, he said, a demographic change is under way in the state that will result in more lower-income, minority students attending UM and UMBC.

High tuition can deter those students, Kirwan said, even if they're eligible for financial aid.

"It's all well and good for us who have been fortunate enough to live in the middle class to say, 'Well, we'll have more financial aid,'" he said. "But when you're a young person in a family where no one's gone to college, doesn't really understand financial aid, you look at the sticker shock of the cost of college, and it's a very hard thing."

Kirwan said that with so many states cutting their higher education budgets - Washington state, for instance, is cutting its university system budget by 13 percent, while the California system said cuts will force it to enroll 6 percent fewer students - Marylanders should be thrilled with the tuition freeze and O'Malley's proposed 1 percent operating budget increase for the system.

"It's an extraordinary budget and a very strong statement by the governor about the priority he places on higher education," Kirwan said.

The tuition freeze has about a "50-50 chance" of being approved by the legislature, said the university system's chief lobbyist, Patrick J. Hogan. He's working to persuade lawmakers to support O'Malley's proposal. An economic downturn "is probably the worst time to raise tuition," Hogan said. "This is when parents and students can least afford it."

The presidents of UMBC and Towson said they support the freeze, and Salisbury's Dudley-Eshbach said that with families hurting, "keeping college affordable is very important."


Other States

Some states that Maryland considers to be competitors have announced or proposed sharp increases in university tuition for next year:

  • New York: 14 percent
  • California: 9.4 percent
  • Washington: 7 percent
  • North Carolina: 6.5 percent