December 26, 2014

HIGHER EDUCATION BUBBLE UPDATE: Belt Tightening 101: Mitch Daniels has helped Purdue keep costs down for students.

Prior to his arrival in 2012, tuition at Purdue had gone up every year for 36 years, with annual hikes averaging close to 6 percent in the previous decade. Daniels has frozen tuition for three straight years and slashed room and board costs by 10 percent. “Instead of asking our students and their families to accommodate their budgets to our spending,” he says, “let’s see if we can’t adjust our spending to their budgets.” Purdue’s class of 2016 may graduate without ever having seen a tuition hike.

Erica Smith, a recent communications graduate from Michigan City, says that the tuition freeze was long overdue. She financed her education with loans she’ll be repaying for at least 25 years. “I feel hopeless almost,” she says. “But most of my friends have as much debt as I do. We joke about paying it till we die.” Smith says that cost hikes while she was a student added between $4,000 and $6,000 to her overall debt. “If tuition continues to rise, Purdue will be out of reach for middle-class people, like my niece,” whom she hopes will one day follow her to West Lafayette.

Daniels achieved the tuition freeze in part by postponing raises for some administrators, and some faculty members volunteered to forgo raises as well. Information-technology consolidation, bulk purchasing, eliminating off-campus storage, disposing of surplus property, and improving cash management also contributed—all techniques from Daniels’s playbook as governor. The former Indiana governor’s efforts to control costs have attracted national attention.

As they should. There’s a lot of low-hanging fruit, because universities haven’t really tried much to control costs. That will have to change.

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