Risks of a rising tuition

Tuition is rising
again. The Board of Trustees held their quarterly meeting this past weekend
and approved a tuition increase for the 2014-2015 academic year. Raising the
cost of undergraduate tuition from $44,020 to $45,800, the 3.9 percent increase
is the most recent hike to an already high tuition that has inclined
steadily over the past decade.

Less than a week after executive vice provost for finance and administration Jim Roberts announced in a National Public Radio article that the cost of Duke is a discount, President Brodhead attributed the tuition increase to the University’s continued investment in student education. While this investment is reflected in many University expenses, from the expansion of non-faculty staff to multimillion-dollar construction projects, the substantial risks of an increasing price tag cannot be overlooked.

The cost of attending Duke has increased over $20,000 in the past decade. With the latest price hike, the total cost of a Duke education—including tuition, room, board and fees—will total over $60,000, a figure nearly $9,000 above the median household income in the U.S. These increases put a disproportionate burden on middle-class students whose families already struggle to finance a Duke education. Such students, who often do not qualify for financial aid or receive small aid packages, are at risk of being financially squeezed out. If financial aid is not adjusted accordingly, the loss of these middle-class students could exacerbate socioeconomic gaps between students.

In addition, tuition increases risk jeopardizing the academic quality of the student body. Although the Office of Undergraduate Admissions boasts a need-blind admissions process and robust financial aid budget, the reality is that high-quality students who are not offered sizable aid packages may choose to enroll elsewhere. Not only do lesser quality schools often offer these students full funding, but the peer institutions we compete against also tend to have lower tuition rates. Duke might be a discount but, in the 2013-2014 academic year, Stanford’s tuition was $43,245. Given that Duke is not “blessed with both the resources and location” of Stanford, the decision to attend Duke might be hard to justify for qualified candidates concerned about Duke’s annual tuition hikes.

If, in order to maintain socio-economic diversity and retain top talent, financial aid is adjusted to account for the increased number of students needing assistance, Duke can reasonably expect greater financial aid costs. Given that 25 percent of tuition already goes toward financial aid, increases in aid spending would likely require further tuition hikes. Is it fair for full-tuition students to carry the burden of financial aid? While we believe such subsidization is fair within limits, we question the long-term sustainability of this kind of positive feedback loop.

Duke should maintain its commitment to promoting socio-economic diversity, inclusive of those who fall in the middle of the income distribution. In the tuition-financial aid tradeoff, we hope that the administration will think about cutting other programs before financial aid. By doing so, Duke can work to minimize the potentially adverse effects of tuition increases, including a squeezed out middle-class and lost top talent. Fortunately, given the steadiness of these tuition increases, Duke has time to think proactively about these risks.