The Changing Landscape of Tuition and Enrollment in American Public Higher Education

Abstract

The costs of public higher education have risen dramatically in recent years, causing anger among students and concern among policymakers worried about falling college completion rates. In this paper, we explore how public tuition costs affect postsecondary enrollment choices. We examine changes over time in the enrollment decisions of students in states where tuition and fees at public four-year institutions increased rapidly, compared with changes for observationally similar students in states with more modest tuition increases. Using student-level data on twelfth graders in 1992 and 2004 linked to institution-level data, we find a relative decline in the likelihood of attending an in-state public four-year institution among high school graduates from states where public tuition costs increased substantially over this period. Students in states where public tuition increased the most were considerably more likely to enroll in a public two-year college than their counterparts in states that adopted more modest increases. We explore heterogeneity in this pattern of substitution between institutions of varying selectivity and control and for students in policy-relevant socio-demographic subgroups, including those in different parts of the twelfth-grade achievement distribution. Generally, large tuition increases at public four-year colleges have weakened the propensity of high school graduates to enroll in such institutions in their state, and increased their likelihood of enrollment in less prestigious in-state public colleges, out-of-state public institutions, or private universities. These effects are most pronounced among students from families of low socioeconomic status, and nonelite students who perform below the 90th percentile on twelfth-grade math tests.