Freezing tuition: It’s not such a hot idea

With steep increases in tuition becoming the norm, it makes sense that many families would benefit if they were able to predict the cost of a college education for all four years. They could plan accordingly, instead of suddenly facing a bill for several thousand dollars more than they had expected. Yet there are potential downsides to tuition guarantees, which are currently offered by a few dozen colleges. Under the guarantees, the price stays the same for the duration of a student’s education. Each year’s freshmen pay a higher rate, which is then guaranteed through their years in college.

But tuition guarantees do nothing to prod colleges to manage their expenses better or otherwise control the price of higher education. Though they make financial planning more predictable, they could cost families more in the end. Colleges would have to guess at their own expenses over several years, which gives them an incentive to protect themselves against unforeseen costs by overcharging for the freshman year.

There are other possible consequences. About 1 in 3 college students transfers to another school at some point. If tuition freezes become the default model for colleges, students would feel less able to change schools because they would be entering at a new, probably higher tuition. It might be worthwhile for more colleges to offer guarantees as a pilot program or as an option — though families who choose this should expect to pay higher initial prices than those faced by families choosing the traditional route. At Baylor University, freshmen who choose that option this year will pay $3,000 more than other incoming students.

Those problems are compounded by others that make a proposed initiative to force tuition guarantees on all of California’s public colleges and universities an unwise idea. Public colleges have no control over one major revenue source — the state. Should the budget rug be pulled out from under them while they’re forced to hold tuition flat, the results would be catastrophic, and the increases for future freshman classes would be astronomical.

A more reasonable model might be guaranteed caps on tuition increases, allowing families to plan for regular price hikes while still giving universities some ability to react to rising expenses. But even these wouldn’t be feasible for California’s public colleges given the precarious condition of the state budget.

Realistically, families should start planning for steeply rising tuition many years before their children even apply to colleges. And ultimately, what’s needed is more commitment on the part of colleges and universities to keep costs down, rather than rejiggering the formula for paying the ever-more-crushing price of a bachelor’s degree.