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Price Sensitive

October 5, 2005

Students pay less to attend community colleges than they do to attend public four-year institutions. And increases in community college tuition rates -- even large percentage increases -- won't change that. As a result, some policy makers and legislators have suggested that increases in community college costs need not be a big worry -- and even if they think it is cause for worry, that hasn't stopped many of them from passing budgets that enact such increases.

Such lawmakers may want to check out a new study on the impact of price on the choice to enroll at community colleges. The study found that, for students in academic programs (as opposed to vocational programs), the relative increases in two- and four-year rates had a significant impact on where students enrolled. There was not a significant impact on the enrollment patterns for vocational students.

The study was conducted by Andrew Nutting, an assistant professor of economics at Colgate University. He used data from the State University of New York System during the 1990s, comparing years in which two- and four-year colleges saw tuition increases of similar size or where one sector or the other was greater. While many students at community colleges do not fit neatly into "academic" or "vocational" tracks, Nutting placed students into one category or the other, based on their programs of study. The study also focused on full-time students.

Nutting found that even though four-year institutions were always more expensive, students in academic programs engaged in comparison shopping between two- and four-year colleges based on the rates of increase that they were experiencing. The result, Nutting wrote, shows that community colleges are viewed as a substitute for four-year institutions in some cases. Likewise, the results show that tuition increases at community colleges have the potential to discourage enrollments.

While Nutting's data focus on New York State, national data show that community college price increases are an issue in many states. In 2003, for example, community college tuition rates increased an average of 13.8 percent, according to the College Board, just three-tenths of a percentage point less than the rate of increase for public four-year institutions, and more than twice the rate of increase for private institutions.

Last year, the rate of increase at community colleges fell to 8.7 percent, but many states still experienced double-digit percentage increases.

 

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