Thursday, October 27, 2005
At least until one state university system has changed direction.
The South Dakota Board of Regents announced last week that, starting next fall, it was slashing tuition for all new out-of-state students by slightly more than half. The change affects prospective students mostly in the eastern half of the United States, since those from neighboring and western states have been paying the lower rate for several years.
The reason for the change is demographics. Like many Plains states, South Dakota faces a dwindling number of children and, thus, high school graduates.
A committee charged with surveying high school enrollment recently told the state's Board of Regents that high school graduation enrollments could drop by as much as 13 percent over the next decade. That, in turn, could reduce the number of South Dakotans entering the state's universities and other post-secondary institutions, which currently have 31,000 students enrolled.
Many public universities, alas, are addicted to tuition dollars. State aid to public higher ed in Minnesota has fallen in percentage terms, so that at SCSU less than half of our budget comes from state appropriations. Yet if the university wants to retain its status as the largest MnSCU school, it may be well advised to look into holding tuition increases below, say, that of the second largest school, whose enrollment is gaining on ours.
Economics question of the day: Could students have elastic demand, so that a cut in tuition rates may increase our budget?