Auditor Of Public Accounts
Luallen: Tuition Increases Put Higher Education Goals in Jeopardy

Press Release Date:  Wednesday, February 14, 2007  
Contact Information:  Jeff Derouen
Phone: (502) 573-0050
Fax: (502) 573-0067
Pager: (888) 222-5670

As the tenth anniversary of Kentucky’s historic higher education reforms approaches, State Auditor Crit Luallen released a study that concludes rising tuition is impacting Kentucky’s ability to meet the 2020 Postsecondary education goals set out by the General Assembly.  A central goal of the 1997 act is to reach national averages for Kentuckians with degrees and to “significantly elevate the level of education of the adults of the Commonwealth.”  The report points out that, as in-state tuition has steadily increased, the full-time undergraduate enrollment of Kentucky residents in the postsecondary education system has begun to decrease. 

Between August 1998 and August 2006 in-state tuition at Kentucky’s eight four-year public institutions has increased by an average of 128%, over five times the rate of inflation. Putting Kentucky’s situation in context, average resident tuition has risen 83% since the fall of 2001, while rising only 35% nationally.

As the cost of tuition has escalated, the growth in Kentucky’s full-time undergraduate residents attending Kentucky’s postsecondary institutions has begun to shrink.  Since the height of full-time resident enrollment in 2004, 1,339 fewer students are attending Kentucky’s two and four-year colleges and universities. (See enclosed chart) As tuition has risen steadily at the Commonwealth’s eight four-year institutions, resident full-time enrollment, which increased by nearly 10% since the 1997 reforms, has begun to flatten, only increasing by 92 students in the last year. (See enclosed chart) This is happening at a time when the Kentucky Council on Postsecondary Education asserts that between 2000 and 2020 Kentucky needs to add 389,000 new bachelor’s degree holders to reach the national average.  The Council estimates that if Kentucky continues to perform at its current level the state will fall short of its 2020 goals by 211,000 bachelor’s degree holders. While the focus is on full-time students, part-time students have also declined in the four-year institutions and the growth of part-time students has slowed in the Kentucky Community and Technical College System.

The report also found that in the ten years since reform, Kentucky has been more successful in attracting non-resident students to Kentucky’s eight four-year public universities than enrolling Kentuckians.   While Kentucky resident enrollment increased by 10%, non-resident growth was 39%.  In fact, 45% of the growth in full-time undergraduate students since the 1997 reforms can be attributed to out-of-state students.  Since the fall of 2003, Kentucky has attracted more non-resident full time students, 56%, than resident students.  Low non-resident tuition rates may be contributing to this disparity.  The Council’s own affordability study suggested modification in non-resident tuition.

“Higher educational attainment for Kentucky’s citizens is the single biggest challenge facing the Commonwealth,” State Auditor Crit Luallen said.  “By any measure, more Kentuckians must have postsecondary degrees if we are to attract the jobs of the 21st Century and increase the quality of life for our residents.  This analysis points to the urgent need for a comprehensive review of the linkages between state appropriations, tuition policy, and financial aid.  All actions by the key players – the General Assembly, Executive Branch, Council for Postsecondary Education, the Universities, and the Kentucky Community and Technical College System – are interrelated, and impact Kentuckians’ ability to reach the educational attainment needed to move the state forward.  Certainly, administrators must continue to look for efficiencies within the postsecondary educational system. However, Kentucky’s policy makers must provide adequate funding to ensure that tuition is set at a level that makes postsecondary education accessible to all residents.”

The report recommends that tuition reductions should be considered and that need-based financial aid should be increased.  Recommendations also are that non-resident tuition should be fair to state taxpayers and that budget decisions should take into account data quantifying their impact on tuition and accessibility.  In addition, a cost-benefit analysis should be conducted of the lowering or elimination of resident tuition.

“I am sending this report to each legislator and to each candidate for Governor.  The data calls for urgent and dramatic action.  It simply must be a top priority of policy makers in Kentucky to make postsecondary education affordable for Kentuckians.  Hopefully, this report can make this critical problem, already at a crisis point, a top issue this year.” Luallen added.