Reports: Alabama higher ed relies more on tuition, less on state support

Reports: Alabama higher ed relies more on tuition, less on state support

By MARY SELL, Alabama Daily News

Revenue at Alabama’s higher education institutions in 2020 was greater than the national per-student average and ranked seventh in the nation, but students’ tuition dollars made up significantly more of that total than the national average.

About 67% of Alabama’s higher education’s total revenue came from tuition, according to information from the State Higher Education Executive Officers Association. In 2008, the “student share” of total revenue was 41.7%, according to a report from the association.

“The hard part is 67% of our total revenue is dependent on tuition, which means parents and families have a bigger share of that,” Alabama Commission on Higher Education Executive Director Jim Purcell told commission members at their quarterly board meeting this month.

“Alabama has a lot of low-income people, but our tuition revenue is twice the national average,” Purcell said.

State support for Alabama institutions in 2020 was $8,023 per full-time equivalent student, referred to as FTE, about $600 less than the national average. The report notes support for community colleges is slightly higher than that for four-year schools.

Also concerning to Purcell and others is a recent Southern Regional Education Board report on college affordability. It detailed how students from families who can least afford college have been hardest hit by effects of the coronavirus pandemic, making them less likely to start college and less able to continue.

Purcell said community college tuition in Alabama was on par with other SREB states. Regional four-year institutions were tied with Mississippi for the third-highest tuition ranking. But the state is “significantly higher” for what the report called “Type I” institutions. Here, that’s the three University of Alabama campuses and Auburn University.

The report said in Alabama:

  • Students from families making less than $30,000 a year accounted for the largest percentage of higher education enrollment — 28% in 2012 and 25% in 2017.
  • For families making less than $30,000, the cost of median tuition and fees at four-year institutions was 61% of income in 2017-18, compared to 48% in 2012-2013.
  • The expenses were greatest at the University of Alabama’s three campuses and Auburn University. Families making less than $30,000 in 2012 needed 88% of their income to pay educational expenses. In 2017 it was 106%.
  • Those families needed 26% of their income in 2017-18 to cover the state’s median tuition at two-year institutions. In 2012-13 it was 24%.

Purcell said an overarching concern in the numbers is that some Alabama families are being priced out of educational opportunities.

“You want your public universities to be accessible to all your citizens,” Purcell told Alabama Daily News recently. “If you’ve got a price structure that makes it nearly impossible for people to go to universities for which they have the academic talent, that is problematic.”

Purcell said the access issue can be addressed through sustained low tuition and through a robust financial aid structure.

“In Alabama, we have neither,” Purcell said.

State cuts, tuition increases

Purcell said Alabama is unique in that each institution sets its own tuition. Many other states have one coordinating board setting rates statewide.

Sen. Arthur Orr, R-Decatur, chairman of the Senate education budget committee, said institutions’ current rates are largely a response to previous decreases in state funding.

“When we went through the Great Recession, Alabama cut higher ed tremendously in the budgetary process and the result of that was colleges and universities had to get the revenue from somewhere,” Orr said. “In addition to cuts, they raised tuition substantially to make ends meet.”

Alabama spends less than Tennessee and Georgia, but more than Mississippi and Florida on higher education. Each of Alabama’s surrounding states also have lotteries that, in part, fund college scholarships.

State funding per student has increased 15% since 2015, but only 6.8% since 1980.

Meanwhile, between 2011-2012 and 2020-2021, in-state undergraduate tuition and fees at the state’s 14 four-year universities has increased an average of 40% to a median $11,029, according to ACHE data. For non-residents, it’s increased 38% to $20,850. Purcell said some of the tuition revenue can be attributed to higher tuition rates and out-of-state students at the two flagship universities. About 50% of Alabama undergrads are from other states, he said.

Orr said lawmakers in the most recent fiscal years have begun to make up for those cuts nearly a decade ago. Nearly $2 billion of next year’s $7.4 billion education budget is dedicated to higher ed.

He said he hopes as state support increases, institutions will rely less on tuition.

“They’ve been cautious about increases,” Orr said. “Of late, they are being very judicious in their increases.”

The UA system leaders earlier this month said tuition rates would be unchanged for most students in the 2021-2022 academic year. Auburn University also opted not to increase tuition rates next year.

“Increased state appropriations this year have helped Auburn maintain and strengthen its high-quality student experience as well as cover increased costs, thereby leading to no tuition increase for fall 2021,” the university said in a written statement to Alabama Daily News.

A statement to ADN from the UA System also praised the Legislature’s support and said that if the higher education share of the Education Trust Fund budget went back to the 2008 level, funding for the state’s public universities would increase by $250 million. 

“This action would greatly assist the UA System in continuing to manage our institutions’ tuition costs,” the statement said. 

The UA System said that for the fifth consecutive year at the University of Alabama and the fourth consecutive year at the University of Alabama at Birmingham and the University of Alabama in Huntsville, in-state students will not see an increase in general tuition for the 2021 – 2022 academic year. 

“The UA System’s ability to make higher education more affordable for students is a direct result of the stated commitment of the University of Alabama System Board of Trustees, UA System Chancellor Finis St. John and campus administrators to provide a high-quality education without excessive hardship on students and their families,” the statement said.

Still, some competing institutions are using Alabama’s current tuition rates to attract students. About 45 minutes east of Auburn in Georgia, Columbus State University offers in-state tuition to Alabama undergrads and its website recently advertised tuition “that’s 25% less per semester as compared to many of Alabama’s regional four-year universities.”

In fall 2020, Columbus State enrolled 512 Alabama undergrad and graduate students, according to information the school provided ADN. That was a 10.5% increase in students from Alabama from 2019, outpacing the university’s overall enrollment increase of 6.3%.

 

Aid increased, more needed

Both the SHEF and SREB reports say Alabama awards less aid to students than most other states do.

“The state’s financial aid with both need and merit criteria amounted to $12 on average per undergraduate FTE student in 2017-18, compared to $14 in 2012-13. The SREB average in 2017-18 was $143 and the national average was $241,” the Southern Regional report said.

Lawmakers and Gov. Kay Ivey did increase the pots of money for student aid in next year’s education budget to about $21.8 million, drawing praise from ACHE. Aid has increased more than 100% since Ivey took office, but is still low, Orr and Purcell said.

Auburn said it increased its pools of student aid to help more low-income students. It guarantees admission for valedictorians and salutatorians from accredited state of Alabama high schools with 50 or more students and has expanded PLUS scholarship awards and the President’s Graduate Opportunity Fund, directing at least 10 percent of scholarship funds for need-based aid. Auburn also has strengthened its recruitment efforts in new areas of the state, adopted a more holistic review of applicants, realigned key enrollment dates and has balanced merit and non-merit aid in key locations, seeking to further grow its new student enrollment among underrepresented students, it said.

COVID relief funds

Alabama has received $4.44 billion in federal COVID-19 relief funds for education support, Purcell told the commission. Of that, $1.1 billion went to higher education.

“We should be in good shape to provide the right programs and support,” he said.

Some of that federal money has gone directly to students.

Last year’s CARES Act set aside funds  for “institutions to provide emergency financial aid grants to students whose lives have been disrupted, many of whom are facing financial challenges and struggling to make ends meet.”

To date at Auburn, $15.6 million has been distributed to students to assist them, the university said. Another $20.5 million will be available to students for the fall 2021 and spring 2022 semesters.

Systemwide, about $92.5 million in federal COVID aid has been allocated to UA students, including funds in this year’s American Rescue Plan Act that have not yet been distributed. As of March 31, $32.6 million has been distributed to students.