Missouri auditor Nicole Galloway: Higher education tuition increases, but fees lead to higher costs

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An audit released by Missouri State Auditor Nicole Galloway finds the state’s public universities are in compliance with a law designed to cap in-state undergraduate tuition increases, but they are increasing student fees to make up for a decrease in state funding. These fees are not defined or limited in statute, making college more expensive for many students and families.

“The purpose of the Higher Education Student Funding Act is to keep the cost of college affordable for Missouri students and families. It defeats the intent of the law when there is no cap or limit on certain fees,” Auditor Galloway said. “The General Assembly should take action to address this issue, because while fees continue to rise, state funding per student has decreased.”

The Missouri General Assembly established the Higher Education Student Funding Act in 2007, which limits the amount a public institution may increase certain required fees and in-state undergraduate tuition each year. The limit is based on how well the economy is performing, measured by the increase in the Consumer Price Index (CPI). Auditor Galloway recommended the General Assembly consider these additional fees when evaluating whether the Higher Education Student Funding Act is meeting its stated intent of limiting the cost of Missouri’s public institutions of higher education.

“Higher education has real and direct benefits to our state, both in its impact on our economy, and for individuals who want to better themselves through education,” Auditor Galloway said. “Those benefits must be reflected in the priority we place on state funding for higher education. This is critical at a time when public colleges and universities across the state are making tough decisions on how to best use the resources available to them in order to continue the important mission of educating future generations.”

In order to comply with the law, institutions must not raise in-state undergraduate tuition more than the increase in the CPI, unless they provide justification and receive a waiver from the Commissioner of Higher Education. These waivers were only provided once, in 2012, when cuts to state higher education funding led 11 of the 14 institutions to increase tuition above the CPI. Between 2009 and 2015, tuition rates rose, on average, about 1.6 percent per year. The CPI rose about 1.8 percent per year, which means the institutions followed the law, but supplemental fees continued to rise.

Although it has risen in the past two years, overall state funding for higher education decreased during the six years reviewed. State funding dropped $1500 per student during that same 6-year period, requiring institutions to find ways to limit costs and increase revenues from other sources. During that same time, supplemental fees increased 138 percent. 

Part of the problem is a lack of clarity over the definition of “required fees.” The law defines tuition as “tuition and required fees,” but many institutions charge supplemental fees that are required only for certain courses. These supplemental fees get left out of the calculation. The audit recommends the Department of Higher Education clearly define the term “required fees” to reduce confusion over what should and should not be included in the calculation.

The Coordinating Board for Higher Education and the Commissioner of Higher Education are charged with reviewing tuition rates submitted by Missouri’s 13 public 4-year institutions and the State Technical College of Missouri to ensure they are in compliance with the law. The 14 institutions included in the Higher Education Student Funding Act’s tuition limits are Harris-Stowe State University, Lincoln University, Missouri Southern State University, Missouri State University, Missouri Western State University, Northwest Missouri State University, Southeast Missouri State University, State Technical College of Missouri, Truman State University, University of Central Missouri, University of Missouri – Columbia, University of Missouri – Kansas City, University of Missouri – St. Louis, and Missouri University of Science and Technology.

This is the second in a series of four higher education audits. An audit of the Department of Higher Education was released earlier this month. Audits of higher education performance funding and the University of Missouri System Administration are ongoing.

A complete copy of the report is available online here.