Starting at the end of August, Missouri’s colleges and universities will no longer have a limit on annual tuition increases. State Representative Doug Richey, R-Excelsior Springs, sponsored language in a new law that removed a tuition cap.
“We have had a history where higher ed funding has been decreasing,” he says. “I became concerned about the fact that while that has been decreasing, we simultaneously had one arm tied behind the back of higher ed when it comes to tuition.”
Since colleges and universities were limited to how much they could increase tuition in a given year, Richey tells Missourinet they would charge higher course fees to make up the difference.
“Universities still had costs that they had to make up,” he says. “So, you had all these course fees that developed rather rapidly. The frustration that parents have had is that they’re thinking that when their young adult child is heading off to college it is going to cost x. But all the course fees that begin to add up and oftentimes in a way to where they are not exactly sure how to anticipate those, it catches them off guard.”
The new law will give schools the option of charging different tuition rates for different classes, instead of a flat tuition rate regardless of the degree. If they choose to charge different rates based upon the degree, Richey says they could no longer charge course fees – making the cost of college more transparent to students and families.
“We all know that a history degree is very inexpensive to provide, comparing that to an engineering degree, which is much more expensive to provide,” says Richey. “What this does for universities is it provides them an opportunity to have the conversation and make the decision as a university, ‘Do we want to utilize differentiated tuition.’ And when they do, now they can start offering these degrees that are less expensive at a lesser rate, which means then the students graduating with those degrees have less of a burden when it comes to college debt. Yet at the same time, those students who are pursuing much more costly degrees, it’s not harming them because we all know that when we graduate with those degrees, we are going to be making sometimes right out of the gate twice the amount when compared to somebody who graduates with a social services degree.”
As a result of the cap removal, Richey says he does not expect schools to charge unreasonable tuition rates.
“There’s nothing in the bill formally that would prevent a university from a 17% increase in tuition, but everyone knows that universities aren’t going to do that. They can’t do that because of market dynamics. They would not survive,” says Richey. “Our universities are competing for a smaller and smaller portion of the population. As that is happening, our universities are competing against one another. So, there will be significant pressure to keep tuition at a rate that is meaningful and affordable because quite frankly, if a university prices itself out of the market, they go under.”
If the increases get out of hand, Richey says lawmakers and the Governor’s Office will be watching. According to Richey, putting the cap back on will be easier than taking if off.
Since state funding for higher education has declined over the years and the tuition cap will be removed, should schools anticipate a drop in state funding?
“I think that what determines state funding, by and large, is going to be affected more by other competing priorities that the state is trying to manage. That is going to be the most predominant influencer of how much the state allocates to higher ed,” says Richey.
The new law will also require the Missouri Department of Higher Education and Workforce Development to annually collect and compile information to help high school students make more informed decisions about their futures. It also aims to ensure they are adequately aware of the costs of attending four-year colleges and alternative career paths.
Additionally, it will allow Missouri’s college athletes to make money off their name, image and likeness.
The new law begins at the end of August. Richey says rates will not change in the upcoming school year as a result of the new law.
To view House Bill 297, click here.
To listen to part of the interview with Rep. Richey, click below.
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