STATE ROLE IN COLLEGE AFORDABILITY
College Savings Plans
Support state efforts to provide and sustain fiscally sound state prepaid tuition plans. Encourage states to make every effort to keep enrollment open to future enrollees.
Encourage state policy reforms of 529 savings plans to increase future savings for lower-income families. Consider "seed" funding initiatives that provide an initial contribution and/or matching monies up to a specified dollar amount. Provide greater individual protection of 529 savings plans from creditors. Urge states to extend tax benefits to families using any state's 529 plan.
Recognition of Inflationary Pressures Impacting Higher Education
■ Encourage states to recognize the higher-than-average relative price level of the goods and services purchased by colleges and universities, and to choose appropriate inflation indexes when drafting state policy that affects tuition
pricing, state operating support and grant aid programs. Alternative indices to the CPI include the Higher Education Price Index (HEPI), administered by the Commonwealth Institute, and the Higher Education Inflationary costs for the typical market basket of goods purchased by higher education institutions were 2.3 percent, more than doubling between FY 2010 and FY 2011, according to the Commonfund Institute. This reversal of recent trends was driven by increases in every market basket cost factor except administrative salaries and service employee salaries.
Inflationary costs for the typical market basket of goods purchased by higher education institutions were 2.3 percent, more than doubling between FY 2010 and FY 2011, according to the Commonwealth Institute. This reversal of recent trends was driven by increases in every market basket cost factor except administrative salaries and service employee salaries.
Cost Adjustment (HECA), administered by the State Higher Education Executive Officers (SHEEO) association.
Improved Transparency of Tuition Cost Changes
Urge states, coordinating boards and other agencies to improve transparency and comparability by expressing tuition changes in dollar terms as opposed to percentage terms—especially as it may relate to formal policy affecting state institutions, such as the provision of state operating support. Reporting tuition cost changes in dollar figures rather than in percentages leads to greater transparency and clarity. For example, according to the College Board, in-state tuition and fees rose by an average of 8.3 percent in 2011-2012 at state public four-year colleges, higher than the 4.5 percent increase at the nation's private four-year not-for-profit colleges and the 3.2 increase at for-profit institutions—yet, the actual dollar increases paid by students were $631, $1,235 and $447, respectively.
Reporting tuition cost changes in dollar figures rather than in percentages leads to greater transparency and clarity. For example, according to the College Board, in-state tuition and fees rose by an average of 8.3 percent in 2011-2012 at state public four-year colleges, higher than the 4.5 percent increase at the nation's private four-year not-for-profit colleges and the 3.2 increase at for-profit institutions—yet, the actual dollar increases paid by students were $631, $1,235 and $447, respectively.