Tuition Heroes™ exists to reward performance of higher education institutions for their tuition stability. We want to be part of the solution to the problem of rising tuition rates in America.
Education allows us to differentiate ourselves from others in our competitive environment. It helps us get jobs and be better at what we do. But, increasing tuition rates at higher education institutions have reached a point to where students either can’t afford to attend college or choose to be saddled by huge student loans upon graduation.
We expect prices for goods and services to go up. But when tuition increases outpace overall inflation rates, there’s a problem. Annual inflation rates averaged 2.8% over the last 30 years and only averaged 2% over the last ten. But tuition rates for 4-year, public institutions increased 8% from just 2013-2014. In 1985, annual tuition at the state school I went to was $5,000. Now, it’s $25,000. That’s a 400% increase, while median income only increased 100% during that time.
Various causes for tuition increases have been offered, including decreased state funding, bloated administrations, increased enrollments, and the ease of getting student loans. With Americans shouldering $1.2 trillion in student loan debt, and about eight million of them in default, many solutions have been offered. Recently, some politicians have proposed new spending by the federal government that would help undergraduates pay tuition at public colleges without needing loans. Some have even proposed spending that would allow for zero tuition. Although these sound like great ideas, they’re not. These policies to subsidize tuition would stick it to Americans with tax increases, and enable institutions to increase tuition as if it were a drug addiction.
Tuition Heroes has a different approach. We establish a goal to drive behavior and reward performance when it’s achieved. We track the tuition for all US institutions and calculate a compound annual growth rate (CAGR). This gives us a percentage that describes the rate at which tuition would have grown if it grew at a steady rate. We then designate each institution that has a 2.5% or less CAGR a Tuition Hero™. The institutions are given the option to activate their Tuition Hero Badge. In fact, anyone that supports an institution can activate the badge for them, including alumni or local governments and businesses. When the Tuition Hero Badge is activated, it’s published on the institution’s page on the Tuition Heroes website. Anyone can then display the badge on their website and have it linked back supporting evidence on Tuition Heroes
Everything in America works better when there’s competition. The competitive spectrum ranges from highly differentiated competitors that can command a higher price to low-cost competitors who are so efficient that they can price their offerings at a point where no one can compete. The higher education institutions living at either end of this competitive spectrum will succeed. The ones stuck in the middle will struggle to compete and eventually fail. The institutions prepared to weather state funding decreases with efficient operations, that have taken measures to update facilities to accept more students, and that don’t take advantage of the proliferation of student loans are more likely to keep tuition rates stable.
These institutions are the Tuition Heroes.
Let’s recognize these institutions for their tuition stability. They’re run like a business with their eye on the bottom line. They’re able to maintain a steady tuition with increases that don’t outpace inflation. Give them a goal to strive for and reward them when they achieve it.