What's Behind Surging Public University Tuition

May 7, 2015 | | CBS MoneyWatch |

Thanks to rapidly rising tuition costs, America has a $1.2 trillion student debt problem.

That's caused a lot of finger pointing, with some blaming soaring administrative hiring and pay, or the rash of expensive building projects on campuses. But when it comes to public universities, the real culprit is a more insidious force: cuts in state support for higher education, according to a new report from the left-leaning think tank Demos.

Declining state appropriations for higher ed is responsible for more than three-quarters of tuition hikes between 2001 and 2011, the analysis found. Increased spending on administration and building projects accounts for only about 12 percent of the tuition increases over that time. During the recession, when many states scrambled to cope with shrinking coffers, lawmakers slashed spending on public universities. But appropriations haven't returned to prerecession figures despite an improving economy.

"Normally, funding would have recovered to relatively high levels given where the economy is, but we haven't seen that," Demos senior policy analyst Robert Hiltonsmith told CBS MoneyWatch. "I think that's because we're seeing a divergence in the way states are viewing their responsibilities to fund their public schools."

[...]