The University System of Maryland, among the most expensive in the country for in-state students, is considering a major price restructuring that would include sharp tuition increases to offset flat state funding and to capitalize on the rising appeal of its campuses.
In what officials are calling a shift in philosophy, large tuition increases - potentially 10 percent or more for Maryland residents and even higher for nonresidents - would be coupled with an expansion of need-based financial aid for low-income students.
System Chancellor William E. Kirwan, who implemented a similar tuition overhaul as president of Ohio State University, has formed a task force to study Maryland's tuition policies with an eye toward increasing revenue. He said yesterday that he will announce the panel of administrators, faculty and parents at tomorrow's meeting of the Board of Regents.
"This is something I feel strongly about. The board policy on tuition and fees is almost 10 years old, and a tremendous amount has changed in intervening years," Kirwan said. "We have a large projected enrollment increase ... and we have a looming budgetary crisis. We need to develop a new policy."
System officials who have discussed the issue with Kirwan describe the proposed increases as part of a wholesale rethinking of the state's approach to higher education.
After years of trying to lure its top students to attend college here, Maryland is reaching the point where its public campuses are in such demand that the state can now charge more for the privilege of attending them, officials say.
"The details are to be determined," said Regent David M. Nevins, who is on the task force. But he said the panel will look for a way that "people who can't pay more, won't pay more, but the people who can pay more for a better product will."
Campus officials are cheering the re-evaluation, saying that with the university system facing at best a tiny increase in state funding next year, and at worst major cuts, the system desperately needs additional revenue to support its $3 billion budget.
"The chancellor is doing exactly what we would have hoped - to provide leadership in looking at the big questions we face," said Freeman A. Hrabowski III, president of the University of Maryland, Baltimore County.
As it stands, the average cost of attending a four-year college as an in-state student in Maryland is relatively high - roughly sixth-highest of the 50 states, depending on how one counts nontuition fees. At the flagship College Park campus, tuition and fees for this year total $5,670; at the University of Maryland, Baltimore County, they are $6,362.
System officials are quick to note, however, that in-state tuition in Maryland has not risen nearly as much in recent years as it has elsewhere. The state system for four years held annual increases to 4 percent before a 5.5 percent increase this year. Flagship campuses in North Carolina, Pennsylvania and Illinois, among others, experienced double-digit percentage increases in tuition this year.
At Ohio State last year, Kirwan sought an increase of 34 percent for new students. Under pressure from state leaders, he later compromised on increases of 19 percent for new students and 9 percent for returning students, with an expansion in need-based financial aid.
"Clearly, Maryland residents need to understand more about what others are doing around the country in higher education," Hrabowski said.
High among the measures to be considered is a large increase in tuition for out-of-state students. The state now allows its campuses to charge nonresidents no more than what it costs to educate them. Under that policy, out-of-state students pay $14,434 in tuition and fees at College Park and $12,546 at UMBC.
System officials say the reputation of Maryland's campuses has grown so much that the state could charge non-residents far more. At the flagships in Michigan, Virginia and Vermont, out-of-state costs, including room and board, now surpass $25,000.
"I have no problem raising tuition for out-of-state people," said Regent Joseph D. Tydings. "Look at our tuition when compared to the University of Virginia or Wisconsin and we certainly are a bargain."
Driving the discussions is the belief that interest in the state's campuses is so strong that most families would be willing to pay more - that, as some officials say, the system can charge what the market will bear.
Officials point to the University of Maryland, College Park, which last year received more than 9,000 applications for about 3,900 spots in its freshman class. They also note that many applicants come from upper-income families who previously may have picked private colleges; the average family income of students at College Park has increased sharply.
"You've got all these Montgomery County kids who could go to Ivy League schools saying, 'Why pay $30,000 a year when you can go to College Park for $5,000?'" said Tydings.
Still, the overhaul could run into opposition, warned former Regent Edwin S. Crawford, chairman of the state's college savings program. Some well-off residents who are already paying higher state income taxes might object to being charged more tuition simply because they can afford it, he said.
"People may say, 'My taxes are going to support public institutions, and now I have to take a second whack?' " he said.
Thomas G. Mortenson, a higher education policy analyst based in Iowa, said Kirwan is "on the right track" with his ideas. If implemented, he said, they could counter the nationwide trend toward merit-based financial aid, under which states offer scholarships to top students, regardless of need, to keep them in state - thereby leaving less aid for those who need it most.
The key to success, Mortenson said, is to set aside enough of the new tuition revenue for need-based financial aid - ideally, well over 25 percent - and to raise the income threshold for aid.
"As you attract students with higher academic profiles, you're attracting families from higher income backgrounds," he said. "There's not much reason to preserve financial subsidies for families who don't need it, if you have competing needs."
College tuition
Average tuition and fees for in-state students at public four-year colleges, 2000-2001
1. Vermont $7,134
2. New Hampshire $6,455
3. Pennsylvania $5,918
4. New Jersey $5,607
5. Delaware $4,797
6. Maryland $4,778
7. Ohio $4,740
8. South Carolina $4,684
9. Michigan $4,626
10. Connecticut $4,543
Source: Chronicle of Higher Education