Steeper tuition seen as recessionary fallout

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Ever since the end of the Great Recession, net tuition income has represented a substantially higher percentage of total educational revenue for public higher education institutions in the United States—a state of affairs that likely reflects higher tuition costs. The trend is explained in the 2017 AVMA & Association of American Veterinary Medical Colleges Report on the Market for Veterinary Education, in which the report's authors also ruminate about potential reasons behind this trend.

"Escalations in tuition appeared during and right after recessions in past decades as tax cuts were implemented to jump-start the economy and public support of colleges was slashed to comply with shrinking budgets and focus on other priorities," observed Bridgette Bain, PhD, assistant director of analytics in the AVMA Veterinary Economics Division, which generated the report. "A consequence of this reduced public support was an increasing share of educational costs shouldered by students."

The amount of funding for public higher education from state governments has been in a continuous decline, concurred Gina Luke, assistant director of the AVMA Governmental Relations Division. "This has driven up the cost of tuition. A decade ago, state governments paid about two-thirds of the cost of education at public universities per full-time student; (currently), states pay only about one-third of the costs, with students now paying about two-thirds of the costs."

The report notes that during recessionary periods when government budgets were slashed or held constant in nominal dollars, schools were forced to make do with less—and that after the recessions, education budgets tended to remain lower than they had been previously.

"This erosion of allocations," Dr. Bain explained, "caused a 'step increase' in the percent of public higher education comprising tuition, with each step up a product of the preceding recession."

Chart: Net tuition income as a percentage of public higher education total educational revenue, U.S., fiscal 1989-2015
Source: 2017 AVMA & AAVMC Report on the Market for Veterinary Education (View larger)

Relying on public funds to contend with costs isn't expected to get any easier in the near term. "State budgets are increasingly tight," Luke observed. "Where to devote limited discretionary dollars for education is a delicate balancing act between K-12, undergraduate education, and graduate-professional education," she added, in addition to other important items on a state's budget ledger, such as roads, bridges, and first responders.

Against the backdrop of public funding challenges are the various costs that schools are facing. Factors mentioned in the AVMA/AAVMC economic report as contributing to higher costs per student are the cost of administration, burgeoning pension and health care costs, and expanding state and federal red tape. With the prospect of these pressures on school budgets remaining unabated in the foreseeable future, stakeholders in public-supported veterinary education will have to be proactive in finding financial relief.

"I anticipate the graduate-professional sector to be continually squeezed," predicted Luke. "There is a good understanding by veterinary deans that controlling costs, limiting increases to tuition, and maintaining quality are all desirable. Veterinary college leadership, faculty, and students will need to get involved and engage with state legislatures to make the case for continued investments in veterinary education. Absent their voices, someone else is making the case for the state funding available for education."

Barbara Dutton is the economics writer/content coordinator for the AVMA Veterinary Economics Division.

Related JAVMA content:

Students limited in ability to control educational debt (June 15, 2017)

Tool details, compares cost of veterinary education (Nov. 15, 2016)

Pulling together to lower the debt-to-income ratio (June 15, 2016)