Tightening Reins on Tuition

November 12, 2010

In what might best be described as a game of chicken over tuition policy, a handful of public colleges in South Carolina have yet to back down.

Flexing notable muscle in late September, the State Budget and Control Board declared that it would not approve any construction projects on campuses that hiked tuition by 7 percent or more this year, barring those that would agree to roll it back for spring 2011. A slightly lower threshold of 6.3 percent was set for community colleges and technical colleges.

While the board’s threat led many colleges to cut back their tuition increases, the institutions with the two largest percentage increases – the College of Charleston and the Citadel – have retained increases of 13 percent and 14.8 percent, respectively. Two technical colleges also have yet to comply.

It’s unclear whether Charleston and the Citadel might change course eventually, and presidents of both institutions declined interview requests for this story.

The debate in South Carolina places in stark relief a tension mounting in public higher education. Lawmakers have imposed dramatic budget cuts on state colleges, while at the same time responding to pressure from constituents that those funding reductions not translate into onerous tuition hikes.

The state board’s action also provides a real-world example of how higher education governance plays out in reality – as opposed to on paper. While individual college boards in South Carolina are given tuition-setting authority, the State Budget and Control Board – made up of the governor, treasurer, comptroller general, chairman of the Senate Finance Committee and chairman of the House Ways & Means Committee – has a powerful position of influence as the gatekeeper of building projects for colleges and other state agencies.

“This whole debate, coupled with a couple of other things, has brought the question of governance and authority very much to the forefront,” said Garrison Walters, executive director of the South Carolina Commission on Higher Education, the state’s coordinating board for colleges and universities.

Walters said he didn’t view it as uncommon for state legislatures to dictate tuition policies, even in states where individual college boards are authorized to set rates. At the same time, he noted that the Budget and Control board is an unusual entity with powers that are the subject of great debate. One of the board's notable powers, as evidenced in the tuition debate, is to deny public agencies, such as colleges, the authority to issue debt or use privately raised funds for construction projects.

“The role of the budget and control board is intensely controversial," Walters said.

While some question the board’s role and influence, a spokesman defended its role in the state.

“This is the approval process, and the Legislature rested the approval process within the Budget and Control Board,” said Delbert Singleton, secretary for the board. “Whether it makes sense or not to anyone at large, it’s the scheme set up by the Legislature.”

Even in states where individual college boards have clear tuition-setting authority, public colleges are always subject to pressures from lawmakers, parents and students, said Paul E. Lingenfelter, president of State Higher Education Executive Officers (SHEEO).

While some states have tried to normalize tuition increases by attaching hikes to inflation or the Higher Education Price Index (HEPI), there’s simply no way to avoid a difficult discussion about how much or how often colleges prices need to change, Lingenfelter said.

“People have tried for years to get higher education funding to operate on automatic pilot, and it’s never worked. It can’t work,” he said. “There is no substitute for dealing with tradeoffs and priorities and the reality of today’s economy.”

While state pressure is to be expected, “I’m not endorsing what they’ve done” in South Carolina, Lingenfelter added.

“I don’t think that’s the best way to address this issue,” he said. “I think what we really need to happen is decision makers in South Carolina and every other state [need] to sit down and try to have a conversation and come to agreement on the right level of tuition, and the right level of student aid and the right level of resources. I don’t think it’s helpful for any player in this process to engage in power plays.”

And a power play it was. Sen. Hugh Leatherman (R-Florence) pressed college presidents in June to keep in-state undergraduate tuition increases at 7.3 percent -- below this year's 7.9 percent national average for four-year public institutions. It was only after the Citadel and the College of Charleston approved increases nearly doubling that amount that Leatherman, a member of the State Budget and Control Board, moved for something “a little bit stronger to let [colleges] know families are hurting out there.”

Leatherman did not respond to interview requests for this story.

Length of Moratorium Unspecified

If individual trustees are stewing over the state board effectively overruling their tuition policies, they’ve not said much publicly. At the Medical University of South Carolina, which lowered its average tuition across programs by 0.1 percent to avoid the moratorium, trustees didn’t grumble, said Raymond S. Greenberg, president of the Medical University of South Carolina.

“Our board wasn’t offended by the action,” he said. “I did not hear anybody on our board say this is usurping our authority. But in our case it was a relatively modest change.”

The cuts to the Medical University, however, have not been modest. In the last two years, a series of budget reductions have trimmed about $46 million or 47 percent of state appropriations from the university’s budget, Greenberg said.

The governor and legislature are represented on the Budget and Control Board, and there’s a “further element of irony” to the fact that these are the very people who appoint most of the university board members who approved the tuition increases in the first place, Greenberg said.

“That [appointment process] is a further element of control that the General Assembly has over the institutions,” he said. “By and large they defer to the campuses, but given the magnitude of some of the increases they felt they needed to step in in some instances. I don’t recall a precedent like this.”

The state board boiled down its tuition position to a couple of sentences, leaving vague whether colleges that didn’t comply would be temporarily or permanently barred from construction.

“I don’t think the Budget and Control Board was clear on that,” Walters said. “We are working to try to build a more coherent policy for the future.”

There are real potential consequences for universities that don’t comply with the state board’s mandate. Had the Medical University of South Carolina not lowered tuition, for instance, the renovation of two research facilities totaling about $4.9 million would have been placed on hold.

“It had the potential of causing disruption in research programs,” Greenberg said.

While the Citadel is taking its chances for now with the moratorium, the college has no pending construction projects before the board. The College of Charleston, however, has a $1.9 million dining hall renovation before the board for approval.

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