A Motley Fool report dated November 23 examined the difference between college tuition paid by in- vs out-of-state students in the US. Data came from a study conducted by valorebooks.com. The study revealed that Colorado’s public universities had the fifth biggest difference and the University of Colorado Boulder had the eighth largest difference of all schools nationwide.
A non-resident can expect to pay an average of $5,418 more than an in-state student attending the same public university in Colorado. At CU Boulder, the difference is much larger. According to US News and World Report, the average Colorado resident undergraduate full-time student at CU Boulder will annually pay $11,091 in tuition and fees. This compares with an average of $34,125 for an out-of-state student-a whopping annual difference of $23,034.
Public colleges and universities are supported by taxpayer dollars and tuition. A portion of Colorado state taxes are diverted to support state schools. Students who come to study at these schools from out-of-state do not contribute to the school through state taxes and this is the reason they pay higher tuition.
This explains the higher tuition paid by out-of-state students, but not the amount of the difference. The simple explanation for the huge difference is that CU Boulder charges out-of-state residents much higher tuition “because they can”. Market principles inform us that a fair price is offered by the seller and accepted voluntarily by the buyer. If out-of-state residents deemed CU Boulder too expensive, they would attend college elsewhere.
Another factor is the dwindling stream of tax revenues diverted to state universities. Funding to public colleges was an early casualty of lower tax revenues resulting from “The Great Recession” beginning in 2007. State schools were forced to find ways to continue operating with less government assistance. Schools implemented solutions ranging from reducing costs to widening existing revenue streams.
Consequently, tuition rose at CU Boulder. An undergraduate arts and sciences student today pays $3,390 more than in 2007. Her out-of-state counterpart pays $8,766 more. In other words, an out-of-state resident brings over $5,000 more to the university compared to an in-state resident than she did in 2007.
The increasingly greater proportion of revenue brought in by out-of-state students represents an appealing option to bean-counters at CU Boulder. A non-resident is “worth” more to the University than a Colorado resident. This past fall, CU enrolled 6,208 new freshmen undergraduates. From this group 3,298 (53%) were state residents and 2,910 (47%) came from out-of-state.
The high percentage of out-of-state students indicates that CU Boulder presents an appealing option. Recruiters should balance their obligation to educate state residents with the temptation to bring in extra revenue from out-of-state residents. The high percentage of out-of-state students however makes one wonder if the former is being sacrificed at the expense of the latter.