The Impact of UMass Tuition and Fee Hikes on Student Debt

Student debt has reached astounding levels.  At nearly $1.2 trillion, outstanding student debt is nearly the highest form of debt in the country, second only to mortgages.  The situation has become a salient issue, not only part of a national conversation but also here in Massachusetts.

Recently, Pioneer published a blog on the rising cost of tuition and fees at the University of Massachusetts that questioned why UMass was not looking to cut costs instead.  This past June, the Board of Trustees voted to increase tuition and fees for in-state students at UMass by more than 5 percent.

Graduating student debt at UMass Amherst grew by nearly 20 percent from 2010-2014, highlighting the crippling long-term effect of the hikes.  Stakeholders have begun to act.  In May, students at UMass Amherst wrote a letter to the Board of Trustees petitioning them to reconsider a new mandatory $250 technology fee.  Today, unions representing faculty and staff will make presentations at the Board of Trustees meeting to demonstrate the burden that this academic year’s tuition and fee increases will put on students, and ask the Board to reconsider the decision.

Although tuition and fees at UMass were frozen for the two previous years, annual increases in the university’s budget are all too common.  With budget increases comes tuition and fee hikes, and in turn, a rise in student debt.  If tuition and fees continue growing at this rate, student debt will further dampen graduates ability to seek the American dream.

By using tuition and mandatory fee data for the last five years, Pioneer calculated the average annual percentage increase in tuition and fees at UMass since 2010.

(From UMass Fact Sheets from 2010-2015 and the Admissions pages for each University)

Even accounting for the tuition freezes in 2013-2014 and 2014-2015, the cost of UMass tuition and mandatory fees has increased an average of 4.17 percent across its campuses since 2010.

Since 2010, the average debt of graduating students at UMass Amherst has increased significantly, as well as the percent of graduates that hold debt.  From 2010-2014, average debt load increased from $25,420 to $30,453, and the percent of graduates with debt has increased from 68 percent to 72 percent.

(From: 2015 Report on Annual Indicators and UMass Fact Sheets from 2010-2015)

Also from 2010-2014, the ratio of graduating students’ debt to tuition and fees has been 2.25 on average at UMass Amherst.  Using these data averages, it is possible to project tuition and fee costs over the next four years for this year’s freshmen at UMass Amherst.  By multiplying the previous year’s tuition and fees by the average annual percent change, and then adding this to the previous year’s tuition and fees, we projected tuition and mandatory fees for 2017-2019.  Then, by multiplying tuition and fees by the average debt to tuition ratio, we projected the average debt load of graduates for 2015-2019.  According to our projections, we have found that approximately 70% of this year’s freshmen at UMass Amherst will graduate with, on average, a debt load of over $36,000— an increase of more than $6,000 over four years.

The effect of increased student debt is dramatic.  With the rise in student debt in the U.S., there has been a corresponding postponement in marriage, having children and home ownership.  Student debt also prevents graduates from saving for retirement, causing them to miss out on significantly higher yields by starting at a young age.  Many graduates also have moved back in with their parents because of their inability to be financially independent.  Graduates with hefty loan payments are often pressured to pursue higher-paying starting jobs, foregoing their long-term professional and financial goals.

Students, faculty, and other stakeholders are rightfully speaking out.  Some are calling for increased state support, but this is not necessarily the best option, especially in the long-run.  The state already provided UMass with an additional $20 million in funding from last year, bringing the state’s contribution to $531 million, yet far short of UMass’ requested $578 million.   But why is no one questioning the scope of UMass’ request?  Why does UMass need the additional $47 million?  Non-instructional cost reduction should be a primary concern.

A broader issue is the trend— both nationally and in Massachusetts— of rising tuition and fee costs, which are pushing students further and further into debt.   Students simply cannot afford it.