Obtaining a degree from an institution of higher learning is a major expenditure, and knowing how much you’re going to pay over a time period is vital. But, many or most institutions don’t offer a fixed rate tuition option.
Would you buy a house knowing that your mortgage could go up every year? Some people do opt for a variable interest rate, but most prefer the fixed rate option, because they can budget their expenses and plan more effectively.
We all know that tuition rates are far outpacing inflation rates. From 2003-2014, inflation rates have ranged from 0.1% to 4.1%, but certainly haven’t eclipsed 5%. From just 2009-2011, tuition rates have increased from 6% to 18%, depending on private, public, profit and nonprofit status. It seems logical that tuition rates should keep pace with cost of living increases, but not far outpace them.
Some institutions offer a fixed rate tuition, recognizing that it can help students and parents plan more effectively, and encourage students to graduate within a certain period of time. These fixed rate tuition plans all differ from school to school. Some offer a truly flat rate and some charge a premium for the first year or so. These contractual agreements also require students to meet specific criteria like taking a certain number of hours per semester or earning a degree within a certain period of time.
Recently, the state of Texas passed a bill that requires all of its universities to offer a fixed rate tuition option. The University of Texas-Dallas, the University of Texas-El Paso and Texas A&M currently offer a fixed rate tuition option, but the rest are soon to follow.
It just makes sense. Large financial commitments, like buying a house, leasing a car or even running up charges on a credit card need to have some certainty about them. The smart institutions of higher learning recognize this, and we applaud them.
Tuition Heroes™ tracks tuition (including required fees) for full-time, first-time degree/certificate-seeking undergraduate students at Title IV institutions. This includes institutions that charge students by academic year and institutions that charge by the program. Tuition and fees for the largest program are used for institutions that charge by the program. For institutions that charge different tuition for in-state, or out-of-state students, the minimum tuition is used.
The Tuition Hero™ designation is given to institutions that have a fixed rate tuition option. By fixed rate tuition, we mean that students are guaranteed a predefined tuition rate over a period of time. The contractual agreement between the student and institution may contain specific criteria that students must meet in order to maintain the predefined tuition rate. As long as the institution has made this logical effort to control costs to students and allow them to foresee future expenses, the institution will be granted the Tuition Hero designation. The designation is also given to institutions that maintain a 2.5% or lower compound annual (tuition) growth rate over the last four consecutive years.