Lifting the UW tuition freeze: A potential cash infusion as Wisconsin’s public colleges lag national counterparts

MADISON, Wis. — To some extent, it’s inevitable.

Dave Janke, a Racine dad whose daughter Anna is heading into her sophomore year at the University of Wisconsin-Madison, started a state-run education investment fund for her when she was born. That’s where her tuition paying for her art and psychology degrees comes out of now, he explained. And while he’s appreciated benefitting from the tuition freeze–

“You can’t stay at the same level forever,” he noted. “We’re gonna have to start paying a little more.”

Republicans in the Joint Finance Committee meeting this week opted out of including an in-state tuition freeze in the next biennium budget, setting up a floor vote that’s unlikely to put it back in–and the governor without a way to include it with his line item veto powers.

The freeze began in 2013 under Republican governor Scott Walker and was continued by Gov. Evers–who hoped to keep it for at least another two years. While UW leaders support it, they hadn’t requested that it be lifted for the 2021-2023 budget cycle.

But now, coming out of a pandemic that has shaken up both System and student budgets, the change is likely to have far-reaching impacts for the state’s public universities and its students alike.

Current picture for state’s public colleges is bleak

In a 2020 report, the non-partisan Wisconsin Policy Forum found Wisconsin’s public colleges and universities falling behind the nation in a number of metrics, including funding and enrollment. While state funding lagged behind the norms, its enrollment decreased at double the national rate in the last decade.

The freeze has been good for students, the report found, but at a cost to the System.

Dave Janke sees current UW-Madison tuition, sitting above $10,000 a semester, as a bargain when compared to other Big Ten schools.

In-state tuition at the University of Michigan-Ann Arbor, for example, is just shy of $16,000. At the University of Minnesota, it sits at about $13,000. At the University of Illinois-Urbana Champaign, in-state tuition ranges from $15,000 to $22,000. Campuses at the University of Nebraska, however, have a more comparable tuition in the $7,000-$9,000 range.

“Even if you raise it 10%, it’s still a great bargain,” Janke said. “It’s cheap.”

The WPF report found that across the board, the UW’s 2013-frozen tuition levels lagged behind its peer institutions.

“Very few states…have had a freeze in place like that over that period of time,” Jason Stein with the Wisconsin Policy Forum explained.

Declining state contributions

Since 2011, the state’s level of contribution has slid from first place to third in terms of the percentage of UW’s revenue budget. It’s a slide that’s continued for decades, leaving federal grants and student tuition as the largest streams of UW’s revenue, each accounting for more than a quarter of revenue.

“Tuition has become a more important source of revenue for UW, even during the freeze,” Stein noted.

Only two other states opted to control their system university tuitions in a similar way, but in all cases increased state funding to help offset it, the report found.

Both Washington and Florida controlled tuition at three institutions, but increased funding instead at the affected institutions–unlike Wisconsin. Since the freeze, the rate of support from the state has, instead, dropped off.

Historical Context: Surging tuition costs, millions in reserves preceded freeze

Tuition costs at UW rose rapidly throughout the first decade of the 2000s, according to the WPF report, more than doubling during that timeframe and rising well past the rate of inflation.

That helped set up a reserve of millions that Republicans put on blast after the Great Recession, one of several factors contributing to first capping tuition at 5.5% increase in 2012 and 2013 before the next budget froze tuition rates at 2013 levels.

But over the eight years since, that story has changed.

“Since the tuition freeze has been put in place, the university’s overall reserves and tuition balances in particular have fallen substantially.” The 2020 report found that reserves had dipped to their lowest levels since 2008, at $227.3 million–a figure likely impacted even further by losses from the pandemic.

Post-pandemic policy options

“Universities nationally are facing challenges but they’ve been particularly acute in Wisconsin,” Stein said.

Because tuition could continue increasing for out-of-state students, leading to enrollment pushes where nearly 50% of UW-Madison’s enrollment came from out of state in 2019. Lifting the freeze could lead to less focus on out-of-state enrollment, Stein noted.

UW System president Tommy Thompson and UW-Madison chancellor Rebecca Blank declined interviews but issued statements on Thursday in support of lifting the freeze, saying it enabled them to ensure “world class education” and ongoing “life-saving research.”

“Ending a budget lapse saves the UW over $90 million in the two-year budget and enabling the Board of Regents to be accountable for tuition is a positive development in the relationship between the UW System and the legislature,” Thompson said in a statement.

Lawmakers didn’t introduce a cap along with lifting the freeze, a surprising move given the cap going into the freeze during 2012 and 2013. Republicans warned UW in Thursday’s session that they’d be “watching” for unreasonable increases. Stein said there were options for policy makers to offset rising tuition for lower-income students by using those extra tuition dollars to increase state aid, which had largely remained flat over the last decade.

“It doesn’t have to be harmful on the lowest income and most vulnerable students and families,” he said.