White House’s Tuition Challenge Being Met in NJ

By MICHAEL W. KLEIN In his weekly radio address on August 16, President Obama challenged colleges “to do their part to bring down costs” and lighten the tuition burden on students.  The state colleges and universities in New Jersey have already accepted this challenge, cutting costs and implementing innovations that minimized tuition increasesThey range between 0% and 3% this coming year.

The nine institutions that are members of the New Jersey Association of State Colleges and Universities (NJASCU) have contained costs in a number of ways. They have significantly cut energy costs by, in some cases, building cogeneration plants; installing automated systems that conserve energy; and conducting energy audits. Some institutions eliminated or consolidated administrative departments; some use web-based data storage to reduce hardware costs; and they all participate in a library consortium that enables cost sharing.

Despite this hard work and solid results, the cost of attending a public college or university in New Jersey is higher than in many states. According to the College Board, the average in-state tuition and fees at New Jersey’s public four-year institutions was $12,715 last year, fourth-highest in the country.

It is important for New Jersey’s residents to understand why.

Principally, we are serving thousands more students with little extra support from the State. Enrollment is at an all-time high: last fall, our nine institutions enrolled 94,562 undergraduates, up from 73,072 in 2003, an increase of over 29%. Including graduate students, our nine institutions enrolled 108,627 students last year, up from 88,076 in 2003, an increase of over 23%.  Reflecting strong student demand, the number of applications from first-time freshmen to the nine members of NJASCU increased 49% between 2002 and 2012, from 41,062 to 61,081.

State appropriations have not kept pace with student demand. Institutional appropriations have been cut about 20% in the past 10 years. According to the most recent State Higher Education Executive Officers’ State Higher Education Finance Report, New Jersey’s educational appropriations per full-time equivalent student, adjusted for inflation, decreased from $10,398 in 2003 to an all-time low of $6,380 in 2013, a drop of almost 39%.

Moreover, the State provided little support for the cost of constructing academic facilities on our campuses until recently. The $750 million Building Our Future Bond Act of 2012 was the first significant facilities funding our institutions received since 1988. The institutions are now building high-tech classrooms, labs, and libraries without taking on large amounts of new debt. 

With the State’s fiscal constraints, the prospects appear dim for greater higher education appropriations in the next few years.  Our institutions are more entrepreneurial than ever in finding alternative revenue sources. Public-private partnerships with developers are enabling construction of mixed-use projects that benefit campuses and their neighboring communities. Institutions are renting out athletic facilities and meeting rooms during off-season, off-peak times. Continuing education programs bring in revenue while providing certificates and other credentials for adults to help advance their careers.

Over the long haul, students and the State of New Jersey itself should consider higher education to be an excellent investment. For students, several studies make clear that a college education pays off financially.  In 2011, median earnings of bachelor’s degree recipients with no advanced degree working full time were $56,500, $21,100 more (167% more) than median earnings of high school graduates. The Federal Reserve Bank of San Francisco estimated that, by retirement age, the average college graduate earns over $800,000 more than the average person with only a high school diploma. The Federal Reserve Bank of New York found that the return on a college degree has held steady at around 15% for more than the past ten years. According to recent research, the net cost of a college degree is about negative $500,000. To arrive at this figure, economists subtracted the cost of tuition and fees from the lifetime earnings gap between college graduates and high school graduates, and adjusted for inflation and other economic factors.

For the State, producing more college graduates is critical to our economy. Georgetown University’s Center on Education and the Workforce projects that by 2020, 68% of the jobs in New Jersey will require postsecondary education, six points higher than our workforce’s current college attainment. In fact, 29% of the jobs in New Jersey will require a bachelor’s degree, tying us with Colorado for the largest percentage of any state. The nine members of NJASCU produce over 45% of the bachelor’s-degree graduates in New Jersey each year, so the return on the State’s appropriations can be seen at each commencement ceremony.

Keeping college affordable is not just a challenge from the White House: it is essential for the prosperity of our citizens and New Jersey’s future. New Jersey’s state colleges and universities continue to work hard to fulfill their mission to provide an affordable, accessible education for the benefit of our students and the success of our state.

Michael W. Klein is the executive director and CEO of the New Jersey Association of State Colleges and Universities

White House’s Tuition Challenge Being Met in NJ