The Market Strikes Back

The College Fix reports (h/t: Best Of The Web) that Evergreen State in Washington has a $2.1 budget shortfall.  Evergreen State is notorious for its behavior last year related to its Day of Absence.  If you missed it the Fix article has details.  The financial details are even more interesting:

In an Aug. 28 memo to the campus community titled “Enrollment and Budget Update,” officials report that fall 2017-18 registration is down about 5 percent, from 3,922 students to 3,713. But the problem is nearly all of the students they lost are nonresidents, who traditionally pay a much higher tuition to attend, officials explained in the memo, a copy of which was obtained by The College Fix. [Emphasis added]

At Evergreen State, like almost any four-year state university, out-of-state students support in-state students.  According to Evergreen State:

Evergreen’s tuition is about $6,700 per year for Washington state residents and about $24,000 per year for nonresidents.

Attracting and retaining out-of-state students is a critical budget item for for many if not most state schools.  The reason is that in-state tuition is somewhere near the marginal cost of education but out-of-state tuition is much higher than the marginal cost.  Is is easy to see why as the $17,300 per student difference times approximately 200 students (see bold above) would be almost $3.5 million.  As the budget shortfall is $2.1 million we would suggest that nearly all bolded in the first quote above might be an overstatement.

It is hard to be sure that Evergreen and the University of Missouri are being punished for their behavior.  It does look likely that that is the case for Evergreen because the out-of-state students are in demand and they can go almost anywhere for similar prices. It looks like the market is offering advice to state schools.  Will they take it?

 

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