Alabama’s higher education costs rise like the nation’s, but not always for the same reasons

College tuition has gotten more expensive throughout the United States over the last two decades. Alabama is no exception. 

According to the Alabama Commission on Higher Education (ACHE), in-state tuition at Alabama’s public colleges and universities rose 28.2% over the last ten years. In that same time period, out-of-state tuition rose by 30.4%. 

According to the National Center for Education Statistics, the University of Alabama’s in-state tuition was $4,630 for the academic year in 2004. Tuition will be $5,550 per semester in the 2023-24 year. Auburn’s tuition was $4,610 in 2004 academic year and will be $6,628 per semester in the coming year. 

The cost growth in Alabama included factors seen all around the country, including reduced public aid to education during and after the Great Recession. Amid the 2007-08 financial crisis, Alabama cut funding from higher education. Between 2008 and 2009, the University of Alabama increased its tuition by $600 from $6,400 to $7,000, and Auburn increased by $360 per year from $5,880 to $6,240. 

While state funding is returning to the institutions, costs keep rising. And experts said particular features of Alabama’s higher education system played a role. 

“I think there is an argument to discuss whether tuition is too high in the state,” said Jim Purcell, ACHE’s executive director.

But Purcell said that many states are working to set education prices at the state level. According to a 2020 report from the Education Commission of the States, 11 states (Florida, Louisiana, Michigan, Missouri, Ohio, Oklahoma, Oregon, Rhode Island, Tennessee, Washington and West Virginia) have policies in place related to the capping or freezing of tuition at public four-year colleges and universities.

But Alabama does not have such a cap in place from the state. In fact, it gives institutions of higher education the power to set their own prices.

“So the UA system will determine the tuition rates for their institutions,” he said. “Auburn will do Auburn and AUM, the community college system will do all the community colleges, and all the other universities will do their rates.”

Michelle Miller-Adams, senior researcher at the W.E. Upjohn Institute for Employment Research in Michigan, who studies the movement towards tuition-free college, said that Alabama is right in the middle of tuition costs nationally. She said the problem is that Alabama is not in the middle when it comes to annual salaries. According to the U.S. Census, Alabama’s median household income was $53,913 in 2021, versus $69,717 in the nation as a whole.  About 23.7% of Alabama households make less than $25,000 a year. 

“So, as a percentage of Alabamians’ budget, college is still much more expensive,” she said.

When cuts come

Alabama has the fourth-highest tuition revenue in the country. Net tuition revenue is the amount of money paid by students minus any discounts they are offered. State Higher Education Finances (SHEF) uses it as a way to measure available resources.

When budget cuts come, Purcell said, many higher education institutions in the state make the decision to raise tuition rather than cut offerings. Some states have more state control over the cost of tuition in their states, but Alabama’s structure is that universities can set their own rates. 

When other states face budget cuts, they might try and cut offerings, but Alabama colleges and universities can simply raise tuition. Purcell said that when state appropriations and tuition revenue are combined, Alabama colleges and universities are ranked eighth in revenue per full-time equivalent.

Full-time equivalent is defined by NCES as the single value that comes from the combination of full-time and part time students.

“I have indicated several times that we need to keep an eye on making sure that our sticker price or our actual price is appropriate for a state that still has a lot of low-income people,” he said.

According to SHEF data provided by the ACHE, over half of Alabama’s colleges and universities tuition revenue comes from out-of-state students.

Renewed state support

According to an August 2023 report from the Texas Public Policy Foundation, state funding for higher education across the country is higher than it’s ever been. In 2007, Alabama’s colleges and universities were allocated $1.249 billion in the education budget. That fell to $1.147 billion in 2009 amid the Great Recession. 

Funding has since rebounded. In the 2024 budget, the state’s colleges and universities are scheduled to receive $1.554 billion. 

But university officials say the cuts during the Great Recession took a toll. Kelli Shomaker, senior vice president for business and administration and chief financial officer at Auburn University, said the cuts meant the school had to raise tuition. Inflation has driven recent tuition increases. 

“We had to raise tuition to help cover all of our everyday costs,” she said. “Our everyday costs of running an institution and providing the service we do to students is no different than the things that happen in your household, the things that happen in other businesses.” 

Shomaker said that the largest cost for Auburn is people, from professors to human resources staffers to accountants to many others. She said that they need to pay well because the market is competitive.

“We could lose instructors because the market would hire them away,” she said.

Shomaker said that Auburn’s tuition raises are below the national average, and they are concerned about pricing the school out of reach for Alabamians.

“We are a land grant, we take very seriously our commitment to providing access to all students, citizens of the state of Alabama,” she said. “And so it is obviously a concern, but there’s also a price to offering that exceptional experience. And we try to balance the two as much as we can.”

When asked about the balancing of the “exceptional experience” with keeping costs low, Shomaker said that the experience was mostly needs, such as career advising and making sure that students are prepared for the workforce.

“I don’t think we provide them a whole lot more than they need, but we provide them what they need,” she said.

Shomaker said that Auburn is lucky to have “really great support from the state.” She said that many institutions across the country have not been so lucky, and she is often disappointed to see headlines about rising tuition.

“Their appropriations have actually continued to decline and decrease, and that’s why tuition has had to rise and that side of the story is usually left out by reporters,” she said. “Only one side is usually told.”

The University of Alabama has not increased tuition for this upcoming school year for in-state students. Prior to last year, the university had not increased tuition for in-state students for five years and out-of-state students for three years, wrote Emma O’Brien, a spokeswoman for the university, in an email Monday afternoon.

She said that the University of Alabama has also been impacted by state budget cuts, and support per student has dropped by 51% since 2002. In that same time frame, student services have increased $1,086 per student.

“Student support services look vastly different and are much more involved than 20 years ago, but these investments in our students are worthwhile,” she wrote.

She said tuition has increased by 21% over the last 20 years, and more out-of-state students have enrolled in the time frame, which has increased tuition revenue for the university. She also said that aid has increased by 336% per student.

“Even amidst exponential growth, UA remained committed to providing an exceptional educational experience at an affordable cost,” she wrote.

O’Brien wrote that operating expenses dropped from $34,433 per student in 2002 to $32,606 per student in 2022.

Moving toward discounts

Purcell said that aid has tripled under Gov. Kay Ivey’s tenure, and the state has allocated money for adult learners for the first time this year.

“We’re still a low-aid state and a high-tuition state, which is not a good place to be,” he said.

Alabama has begun moving towards adding that money back to the higher education institutions, but other states have begun offering free and discounted tuition for many groups.

Tennessee allows students to attend community and technical colleges for free under the Tennessee Promise program. The program is a “last dollar” program according to the website, which means it covers tuition and fees not covered by a Pell Grant, Hope Scholarship or TSAA funds.

“So there are other places that actually almost guaranteed students who are doing the thing we want them to do, which is to get a credential to move forward,” Purcell said.

Miller-Adams said that many of these programs, especially last dollar programs, allow for students to be confident that community college is accessible for them, even if the state does not end up paying for most of the costs associated with the education.

“Community college is affordable in most places, not everywhere, but in most places, so a lot of the times, these last-dollar community college only programs like the Tennessee Promise are, they’re almost more important for their messaging than they are for the actual amount of new money they bring to especially low-income students,” she said.

Other states extend discounts at their colleges to students. In 2020, the University of Tennessee Chattanooga began offering discounted tuition for students in surrounding states. Admissions data for the school shows that the number of Alabama residents enrolled at the school has been increasing since 2016. In Fall 2016, 64 Alabama residents enrolled. In Fall 2023, 108 Alabama students attended.

Stacie Graham, interim vice chancellor of enrollment management and student affairs, said over email that they had 1400 out-of-state students in fall 2022, and 68% came from neighboring states.

“We think having affordable options for out-of-state students can help families consider choosing UTC for their educational journey,” she wrote. “We know college affordability is a concern, and programs like this make college more accessible for more students.”

She said they also recently expanded their border state rate to all out of state students.

Mississippi State University Meridian offers in-state tuition for six west Alabama counties. Full-time enrollment at the school with in-state tuition is $4,505 per semester.

Miller-Adams said that the free college part of Biden’s Build Back Better program would have been valuable because it was a “first dollar” program, allowing students’ Pell Grants to cover living expenses. 

According to the New York Times, the proposal for free community college was originally part of the Build Back Better program and was championed by First Lady Jill Biden. The proposal was dropped in attempts to whittle down the bill for better chances of passage.

She said she hopes it’s something that will be revisited. 

Some community colleges in Kentucky have started offering free tuition to some students. Louisiana has also begun offering tuition-free community college to some adults.

Ryan Morgan, CEO at the Campaign for Free College and a Montgomery native, said that he thinks many of the programs around the country, especially those in surrounding states, that offer more money to Alabama students contribute to the “brain drain” from the state.

“I think that when a state has a free college program, especially if you’re looking at four-year public universities, free college is a way to prevent brain drain,” he said.

Morgan said that when he was in high school, he was deciding between the University of North Carolina and University of Alabama, and UNC had the more attractive offer.

“I didn’t personally move back to Alabama, I moved up to Virginia,” he said.

Miller-Adams said that red states often take the approach of workforce development when analyzing free college programs. She said the business community is often enthusiastic about these free college ideas as a way to train and keep workers in the state.

“And so that’s how, Kentucky and Louisiana and Tennessee, and many other conservative states have managed to get these tuition free college programs in place,” she said.