As the Trump administration has tried to influence a wide array of higher-ed policies, from institutional neutrality to international enrollment, it’s also weighed in on a long-running debate among administrators and politicians alike: how to make college more affordable.
Trump’s much-talked-about compact — which so far no college has signed — would require institutions to freeze tuition for a minimum of five years. “Too many young adults have become saddled with life-altering debt that has affected, among other things, their ability to have a family or purchase a home,” states the document, which promises preferential access to federal funding for institutions that endorse it.
Tuition freezes aren’t a new concept: Public-university systems, like those in Indiana and North Carolina, have for years enacted annual freezes and caps on the rate at which campuses can increase tuition. The University of Arizona, which declined the compact, said in its response to the Trump administration that it had already decided to freeze in-state tuition this year. Cost ceilings aren’t as common at private universities, where tuition revenue typically makes up a much larger share of operating budgets.
While tuition freezes may sound like a slam dunk for students, they can have surprising consequences. Here’s what you need to know.
What Is a Tuition Freeze?
For public universities, a tuition freeze occurs when a state legislature or governing board restricts a college’s ability to raise tuition for students. At private institutions, the board makes that call, though much more rarely.
Freezes are not to be confused with tuition “caps,” which mandate that tuition can only increase by a set amount, say 2 or 3 percent, in a given year. Caps are more common.
How Do Tuition Freezes Differ From Fixed-Tuition Plans?
Fixed-tuition plans ensure that prices can’t increase once a student commits to attending the college. The University of North Carolina system has instituted such a policy for in-state residents, which guarantees tuition rates will not increase for eight consecutive semesters.
Carolyn Fast, director of higher-education policy and senior fellow at the Century Foundation, said fixed tuition is a popular tool used by colleges to provide reassurance amid rising costs, but it’s not necessarily an affordability strategy. “It would theoretically save students money also, but I think it’s more aimed at giving people predictability,” Fast said.
What Are the Benefits of a Tuition Freeze?
Research has shown that mandatory freezes do bring tuition rates down, making the sticker price of a degree more appealing to prospective students.
A report by the Postsecondary Education and Economic Research Center, which examined state-driven tuition freezes and caps between 1990 and 2019, found that cost regulations reduced the growth in average sticker price by 6 percentage points per year among four-year colleges and 7 percentage points for two years after the freeze or cap ended. In the period examined, 22 states enacted at least one cap or freeze.
What Are the Drawbacks?
Policy experts warn these freezes may not actually make college more affordable for many students. When tuition is frozen, universities have to cut costs to make up for the loss, and experts say that usually harms financial aid.
Lois Miller, assistant professor of economics at the University of South Carolina at Columbia and co-author of the study, told The Chronicle that because, on average, “students who get financial aid tend to be lower income, it could actually even make college more expensive for those people,” and benefit “wealthier students who don’t get financial aid.”
After a freeze ends, tuition may even increase, Fast said. When state budgets are tight and federal support is dwindling, as is the case now, lawmakers often “decrease their investment in public-college systems,” she said. “If that happens, schools are going to be in a situation where they’re losing state investment, and usually they can respond by increasing tuition. That’s sort of a safety valve for them.”
Why Haven’t More Private Colleges Instituted Freezes?
While income-based free-tuition programs have gained traction among private institutions in recent years, freezing and capping tuition isn’t common. Even private colleges with billion-dollar endowments are hesitant to enact such changes.
“While student access remains at the forefront, institutions must also balance a number of budgetary needs, including adequate expenditures for quality teaching and research, and the amount of revenue available from other sources,” said Timothy McDonough, senior vice president of strategic partnerships and communications at the National Association of College and University Business Officers.
Tuition freezes can be a temporary way to help with college affordability, but McDonough warns they are not an effective mechanism in the long run. “Without adequate alternative sources of revenue, such as state appropriations at public institutions or endowment earnings at many privates, long-term tuition freezes are seldom sustainable and can lead to costly, long-term financial deficits,” he said.
Should Colleges Use Frozen Tuition to Advertise Their Affordability?
If colleges really are able to keep tuition level for a number of years, Fast argued, why not advertise it? “That actually could be a real benefit to an individual student and I don’t think that’s necessarily misleading or concerning in terms of using it as a marketing tool,” she said.
Miller agreed that freezes could have benefits. She said the study she co-authored proved that tuition freezes don’t always decrease institutional aid; in other words, costs at some colleges do go down. The study also found that well-resourced institutions could easily make up the difference in revenue. “It could really be that at some of these places, it really is becoming more affordable for students,” she said.
Still, Miller said, state governments should consider all of the potential consequences before making a decision.
