Public Colleges Brace for Expected Drop in Out-of-State Students and the Revenue They Provide
By Jay Premack for the Chronicle of Higher Education
For each in-state student, George Mason U. has to find more than $2,000 in its budget to cover the difference between what it costs to educate the student and what tuition and state money cover, says Provost Peter N. Stearns.
By Austin Wright
Students like Matthew Paauw may have administrators at some public colleges on edge.
The 18-year-old from North Bend, Wash., applied to seven colleges, including private ones and public campuses out of state. But Mr. Paauw has chosen to attend Washington State University, a public institution about half as expensive as any of his other choices.
"My dad has been saving for quite a few years for my college and had much of it in stocks," he says. "When the stocks turned, he lost a bit of money, which definitely played into my decision."
Some cash-strapped public colleges this year hope to raise the percentage of out-of-state students in their freshman classes. Those students often pay twice as much as their in-state counterparts. But, like Mr. Paauw, many high-school graduates are staying in state during the economic downturn and reaping the benefits of a low-cost, publicly subsidized college education.
Few colleges have released fall-enrollment data yet, but administrators and high-school guidance counselors are already predicting that public colleges are likely to see a decline this year in the ratio of out-of-state to in-state students. Even a slight decline can translate to million-dollar revenue losses.
"I do think that, anecdotally speaking, one can assume that out-of-state enrollment will be impacted" by the economic downturn, says Daniel J. Hurley, director of state relations and policy analysis at the American Association of State Colleges and Universities. It will be a few months before widespread data will be available to measure changes in out-of-state enrollments, he says, but "there's a lot of info showing that students are scaling back their expectations of what their families can afford."
George Mason University, which has increased the proportion of out-of-state students in its freshman classes over the past five years from about 13 percent to about 25 percent, is bracing for a decline in that ratio this year.
The number of admitted in-state students choosing to enroll at George Mason is rising faster than the number of admitted out-of-state students choosing to enroll, according to Peter N. Stearns, the university's provost. The number of admitted in-state students choosing to enroll, he says, is up about 7 percent over last year, while the number of admitted out-of-state students choosing to enroll is up only about 1 percent.
That trend is problematic for a regionally oriented public university like his, which counts on higher-paying out-of-state students to help bolster revenues. The dwindling proportion of out-of-state students hits especially hard when public colleges like George Mason are grappling with other budget restrictions in the economic downturn.
At George Mason, the full cost to the university of providing an education to a single student is about $15,000, says Mr. Stearns. Out-of-state students will pay $24,008 in tuition and fees this fall. But in-state students will pay $8,024, a rate well below the actual cost of their education.
And the state support George Mason receives for each full-time student doesn't make up the gap. For each in-state student who enrolls, the university has to find more than $2,000 in its own budget to cover the difference between what it costs to educate the student and what tuition and state money cover, Mr. Stearns says.
State support as a percentage of public colleges' budgets has dwindled in Virginia over the past decade. Appropriations to George Mason have declined by $27-million, or 21 percent of the state portion of its budget, over the last two years.
Public colleges in the commonwealth that have pushed to raise enrollment of out-of-state students have faced criticism from Virginia lawmakers and parents worried that such efforts would prevent their own children from being admitted. But legislation capping out-of-state enrollment at public colleges has failed to pass in the state's General Assembly, largely because such a restriction would cost colleges millions of dollars.
"It's an interesting dilemma," Mr. Stearns says. "We're excited at having more in-state students, but we do face some harsh economic realities. We'll have to have larger class sizes, and there will be other cost-cutting measures."
A Shift in Students' Focus
High-school guidance counselors are also reporting an uptick in interest among their students in attending college in state.
In her nine years at North Shore Hebrew Academy High School helping seniors choose colleges, Laura J. Miller has never seen so many students opting to apply to public colleges in New York state. Ms. Miller, director of college guidance at the school, in Great Neck, says that this year the cost of college came up again and again as a major concern during counseling sessions with parents.
"Cost is an issue for everybody now because of the recession," she says. "We're in a very different climate."
This year, she says, students were less eager to apply to New England's elite private colleges than past classes have been. Instead, more students were asking about campuses like those of the State University of New York and the City University of New York's William E. Macaulay Honors College, in-state options that she didn't talk about as much with her students even just a year earlier.
Last year 55 percent of North Shore's 67 graduating seniors chose private colleges, and 4 percent chose campuses in the SUNY system. This year 47 percent of the 85 graduating seniors have chosen to attend private colleges and 12 percent chose SUNY campuses.
Ms. Miller says she spoke this year with an admissions officer at one out-of-state public college, which she declined to name, who told her that the college hoped more students from North Shore would apply. The officer, she says, told her that the college hoped to raise its percentage of out-of-state students this year in order to make up for lost revenues elsewhere. At North Shore, Ms. Miller says, several students each year typically choose to attend that college.
The shifts she is seeing in the market for college freshmen, though, could have a silver lining for some of her seniors: "I actually found that our students were in a better position to get into a lot of the competitive out-of-state public schools," she says.
In Florida, public colleges already bursting at the seams could have trouble dealing with enrollment increases that would come if even more residents choose to stay in the state for college.
Mandee Heller Adler, a guidance counselor at Donna Klein Jewish Academy, a high school in Boca Raton, says admissions officers in the state could be in for a shock this year. Ms. Adler says that she counsels a number of families with relatively high incomes, and that even among those, "I have very few who do not have Florida public colleges at the top of their list this year."
"Because of the financial crisis, a lot of middle-class families that might have taken loans or made the stretch for an out-of-state or private college are now deciding that the value is just not there," she says. The number of students deciding to stay in state this year, she adds, "could bankrupt the system."
Some public colleges, such as the University of Alabama, have said that they are working to increase their out-of-state student populations this fall. They hope their efforts to recruit out-of-state students will generate revenue that could allow them to avoid layoffs or other budget cuts.
Florida State University ramped up its out-of-state recruiting this year, hoping to increase its percentage of out-of-state freshman from 7 percent last year to 8 percent this year.
Other institutions, though, say they remain committed to keeping the ratio of out-of-state to in-state students low, despite tight budgets.
The University of California, for example, plans to hold constant its relatively low percentage of out-of-state students at about 5 percent, even as budget shortfalls have led the system to raise in-state tuition and cut enrollment. Lawmakers have attached stipulations to state funds encouraging California's colleges to admit few out-of-state students.
As for Mr. Paauw, the rising freshman at Washington State, the choice to stay in state has taken some financial pressure off him and his family.
He says two private colleges offered him generous financial-aid packages to try to lure him out of state. But his in-state option was still a much better financial deal.
"My dad wasn't pushing me to go to a public or private; he just told me that the privates might be a little harder to pay for, and that I might have to take out some loans," Mr. Paauw says. "The decision I made was a good one."