Tuition Freezes: Is it getting cold in here?

By Joe Messinger, CFP®

April 26, 2018

2 min READ

Have you heard the news about the University of Cincinnati? For the past five years, the university has frozen tuition for both in-state and out-of-state students. They are not the only college to do this. Tuition freezing has been an appealing marketing trend to attempt to increase enrollment in recent years. What does freezing tuition mean and how are families and colleges impacted?

A tuition freeze means just that…the tuition remains unchanged from year-to-year for all students. Most of the time room, board, and fee costs continue to rise however. Level tuition also known as a tuition guarantee like at Ohio State is a tuition freeze that applies to a certain incoming class for the four years they remain in school. The tuition for subsequent incoming classes may be increased.

Ohio is among many states who have proposed freezing tuition or promoting tuition guarantees at public universities. Ohio ranked 45th out of the 50 states in college affordability. The rising rate of tuition is a factor in this problem (in addition to the lack for financial aid for families). Ohio colleges have been forced to become leaner.

Parents are often surprised when their student is not at a tuition freeze or guarantee college as their costs rise 2 to 3% every year. Even if tuition is frozen, parents may be surprised to see the rate of increase for room, board, and fees. Parents need to understand what all four years will look like using estimated increases in your calculations.

What does it mean for colleges?

While families and students are enjoying the benefit of a tuition freeze, colleges have to make some tough choices. At Purdue where they froze tuition for seven years, they have had to attract students (and their higher tuition dollars) from outside their home state as well as making cuts in their budgeting especially as health care costs continue to rise.

A tuition freeze is a great marketing idea and universities hope that enrollment will grow. However, they have been forced to look at increasing out of state enrollment as one hedge for helping their budget, and this practice has been criticized. At Purdue, an in-state student is paying $9,992 in tuition while out-of-state is paying $28,794 and international students are paying $30,954. You can see where students from outside Indiana would be attractive. This practice is happening everywhere…not just at Purdue.

As more public universities look to freezing tuition as an option, they also face state funding cutbacks. Colleges have to be very careful to maintain a balance. They must show they are keeping down costs as they try to prove to their states they deserve funding. Some states are asking for tuition freezes with the promise of more state funds in return.

The future of freezing

Experts worry that there will be a breaking point in the future where colleges coming off a freeze will need a much larger increase. Also, they worry about lowering the quality of the education because of budget concerns. The ideal would be a combination of smart budget choices, reasonable tuition increases, and continuous state funding, but the ideal may be a pipe dream.

For parents, tuition freezes can be an attractive plus. Don’t forget to pay attention to that university’s room, board, and fee increase practices. You can look at past price increase percentages to get an estimated idea for your student’s four years. Remember that the dollar amount of any scholarships remains the same from year to year even if the cost increases. Think ahead to avoid a shock to your budget.