University World News - US: Fees worth $18 billion to economy

University World News - US: Fees worth $18 billion to economy


US: Fees worth $18 billion to economy

Only 3.7% of all students enrolled in American higher education institutions are foreigners, yet they contribute nearly $18 billion to the US economy, according to the US Department of Commerce. Most of this income is generated by tuition and other fees.

Data compiled by the non-profit College Board reveal that annual tuition fees increased by 5.9% from 2008 to 2009 in all sectors of higher education. In the context of the worst recession since the 1930s, it is noteworthy that these figures are only just up from the average 5% annual rate of increase over the past decade.

Disaggregation of the data shows that most private, non-profit four-year institutions were able to keep their fee increases to 4.4% while public four-year institutions raised their tuition between 6% and 10%.

But all economic indications suggest that these are still early days. Indeed, the fact that 48 states faced initial and mid-year budget shortfalls in December totalling $193 billion does not bode well for the public sector institutions they maintain.

For instance, the New Mexico state legislature, responding to its budget deficit of $650 million, has proposed reducing funding to higher education by an additional 4% (or $20 million) for the 2010-11 fiscal year. For the state's network of colleges and universities, this could translate intotuition increases of 6% to resident students and of 15% for non-residents.