University tuition increases near maximum allowed in Mo.

JEFFERSON CITY, Mo. -- In the first year of a law capping tuition increases, most Missouri universities are raising tuition by nearly the maximum amount allowed during the upcoming school year.

A new state law limits tuition and fee increases to the rate of inflation, with an allowance for slightly higher increases at schools whose tuition is below the state average. The inflation rate from 2007 to 2008 was 4.1 percent, according the department.

Southeast Missouri State University raised tuition in May by the maximum 4.1 percent allowed under the law. Combined with general fee increases approved by students, tuition will rise $11 per credit hour to $208.50. For an undergraduate from Missouri, a semester of college will now cost $2,502 at Southeast.

Figures provided by the state Department of Higher Education to The Associated Press show most of Missouri's other public universities are also raising tuition, either by the full amount allowed or by just a few tenths of a percentage point less than the maximum.

The average tuition increase at Missouri's public universities and technical colleges will be 4 percent for the 2008-2009 school year.

That's an indication that the new law is working to hold down college costs that likely would have risen by more, said sponsoring Sen. Gary Nodler, R-Joplin.

"The consumers of the state are unquestionably being protected, and it's an incentive to the universities to achieve greater efficiencies," Nodler said.

But some university officials fear that tuition limits could hamper their services in the long term.

At Northwest Missouri State University, for example, tuition likely would have risen in the range of 6 percent if not for the state-imposed limit, said president Dean Hubbard. The Maryville school offers several perks to students, including laptop computers and cheaply rented textbooks.

"What I worry about long term is that those kind of amenities will get knocked off in the interest of trying to stay within price controls," Hubbard said. "I can't find a time in history when price controls can work, particularly in a capitalist environment."

Budget troubles and an unsteady economy led state lawmakers and then-governor Bob Holden to reducing funding to universities beginning in 2001. That led to a couple of years of sharp tuition increases -- an average of more than 16 percent in the 2002 fall semester and more than 14 percent in fall 2003.

Missouri's money for higher education institutions, as a whole, still has not returned to the levels that schools were supposed to receive before the cuts took effect. Tuition generally has continued to rise by more than the inflation rate. It went up an average of 6.1 percent in fall 2007, according to Department of Higher Education statistics.

Tuition increases this fall will range from 3 percent at Lincoln University in Jefferson City to 5.6 percent at Missouri Southern State University in Joplin, which had the greatest ability to raise rates under the new law because it had the state's lowest tuition.

Tuition at the four-campus University of Missouri system will rise by an average of 4 percent.

Absent the tuition caps, "I would have expected there would have been more variation. There would have been some that would have been further below and some that would have been higher," said deputy Higher Education commissioner Paul Wagner. "I don't think that anyone could argue the policy didn't have an effect."

Higher education institutions had to report their tuition and fee increases to the state by July 1. Student-approved fee increases are exempt from the limits. None of the universities used a provision of the new law allowing schools to seek a waiver to raise tuition by more than the capped amount.

University of Missouri officials went through a cost-revenue analysis and determined they had a more than $8 million gap between projected revenues at the inflation-capped tuition rate and projected costs, said Nikki Krawitz, the university's vice president for finance and administration.

Instead of asking the state for a waiver, the university is asking each campus to trim its expenses.

"We wanted to comply with the spirit of Senate Bill 389 [the new tuition-limit law], which was to continue to try to ensure that our institution was accessible and affordable," Krawitz said.

Missouri Southern bucked state trends by reducing tuition slightly in fall 2005.

Even with a 5.6 percent tuition increase this year, the school cannot afford to provide a general salary increase for its faculty and staff. The university's various departments are receiving only half their spending authority until their budgets can be reassessed in January, said Rod Surber, director of university relations and marketing.

Hubbard said the caps virtually assure that universities will raise their tuition by the maximum, because institutions can't carry over one year's potential increase to the next.

"You would be derelict in your responsibility to your institution as a president if you'd come in and say, 'We're going to raise it less than inflation or less than what's allowable,' because the next year, they're not going to give you credit for the fact that you held back," Hubbard said.