Gregory Geoffroy Speeches: Iowa State University

"Why Does Tuition Outpace Inflation Even in Good Years?"

Op-ed
President Gregory L. Geoffroy
Appeared in the Des Moines Register, Nov. 17, 2003

A recent caller to my monthly radio program ("Talk of Iowa" WOI; WSUI) asked an important question about tuition at Iowa's public universities and inflation.

The caller understood that the main reason tuition has gone up more than 50 percent over the past four years was because of four years of successive cuts in our state appropriations. But then he asked: "Isn't it true that even in years when state funding has been relatively good, tuition has risen faster than inflation?"

He's right. Tuition throughout the nation -- even in good years -- has increased more than inflation measured by the Consumer Price Index (CPI). However, the CPI is not the right inflation index to measure price increases in higher education. The CPI measures the cost of a "market basket" of goods and services for American consumers, such as groceries, rent, heating, clothing, prescription drugs, medical services, and even cable television.

Higher Ed's "market basket" is different
The standard inflation measure for higher education is the Higher Education Price Index (HEPI), which keeps track of the cost of a different "market basket" of goods and services needed by colleges and universities, such as communication and data processing services, scientific equipment, laboratory supplies, library books and journals, and faculty salaries. (Board of Regents' policy requires that undergraduate tuition keep pace with HEPI and also provide support to enhance educational quality.)

The cost of items in the higher education basket has risen much faster than those in the Consumer Price Index. Since 1983, the Consumer Price Index increased 85 percent while the education index increased 122 percent. Since 1999, the education index has outpaced the Consumer Price Index nearly 2:1. Three higher education items contribute significantly to this differential:

Scientific journal subscriptions. These have escalated at a rate averaging more than 10 percent per year. Last year, a subscription to The Journal of Heat Transfer increased 25 percent. Since 1998, Physical Review has increased nearly 250 percent, The Journal of Physical Chemistry 212 percent. We subscribe to 29,000 such journals because they're important parts of students' education and faculty research.
Laboratory equipment. The cost of basic equipment increase each year, as does the level of sophistication to be competitive. Three years ago, a $25,000 high-pressure liquid chromatograph met most biochemistry lab needs. Today, a $120,000 mass spectrometer is standard. Similarly, a $30,000 light microscope was adequate for most metallurgical research a few years ago, but nanotechnology requires $100,000 atomic force microscopes and $150,000 scanning electron microscopes.
Faculty salaries. We are in a highly competitive market for faculty, especially in areas central to our land-grant mission, such as the biological sciences, engineering, information sciences, and business. Nationally, faculty salaries in these areas have increased rapidly because these experts are in high demand and are valued because of their contributions to economic development.

We all regret that tuition has been increased by so much over the past four years. It places a hardship on students and families, and it creates enrollment and financial aid challenges. The fact that public university tuition in Iowa is still lower than tuition at our peer universities doesn't soften the blow much.

College a very wise investment
Higher education tuition should not be thought of as an expense. It's a very wise investment. Over a working lifetime, someone with a four-year college degree will earn, on average, nearly $1 million more than someone with a high school diploma. Studies also show that higher levels of education correlate to better health, better parenting, greater involvement in community activities and greater personal satisfaction.

Since 1999, we increased grants from $48 million to $74 million, or 55 percent. With a combination of savings, loans, scholarships, part-time jobs and other resources, a public university education in Iowa is still within reach of most people.

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