Thursday, October 6, 2011

If You Build It, They Will Come (Higher Ed in North Dakota)

By Ellen Cutter, Director of Research.  

Ok, this article has been sitting on my desk for a while. 

In July, the Wall Street Journal did a fascinating profile on North Dakota’s higher education strategies. Their leaders have, for a long time now, been aggressively investing in its public institutions’ capacity and quality while using state revenue surpluses (generated by a booming oil industry) to keep in-stateand out-of-state tuitions low. Of course, what makes this interesting is that this has happened while other university systems have slashed programs, increase class sizes, and raised tuitions as their state governments grapple with staggering budget shortfalls. 

The most notable of these systems is California, which has increased its share of out-of-state students from 12 percent in 2009 to 18 percent in fall 2011 as a way to increase its revenues. Non-resident students pay an additional $23,000/year for tuition and fees. Earlier this year, the New York Timesbrought to light how some students at UC-Berkeley have gotten married (in some instances, to near perfect strangers) to qualify as in-state students. The article notes that, “U.C. students from out of state must meet three requirements to establish residency — physical presence, intent to stay and financial independence — a complicated process that takes at least two years. The independence test is the hardest to pass. When students marry, they can automatically claim themselves as independent, provided their parents do not claim them as dependents on their taxes. After that, gaining in-state tuition is a breeze.” One woman noted that by marrying another out-of-state tuition paying student (who she found on Facebook), she saved over $50,000 in would-be student loans. California’s ratio of out-of-state students, while growing, is not in the top tier. Vermont (67%), Rhode Island (56%), Arizona (49%), New Hampshire (46%), Wyoming (45%), North Dakota (45%), and Iowa (41%) represent the states with the largest proportions of out-of-state residents.

Less extreme than marriage, some students raised in California (or Connecticut or Kolcutta for that matter) are opting to locate where they can get the best value for their money, meaning lower out-of-state tuition than their in-state tuition options and smaller classes taught by tenured-faculty. For many, this means relocating to North Dakota. Who would have thought 10 year ago that North Dakota (NORTH DAKOTA!?) would become a talent magnet?

Years ago, when state leaders were faced with closing down universities due to population loss and a declining number of homegrown students, its leaders decided to aggressively invest in its system. Fargo, home of North Dakota State University, has redefined itself as a booming college town attracting students from around the country and the world. The state’s association with a consortium of 20 other states gives students from these states a break on the already low out-of-state tuition (ranging from $9,000 - $17,000, depending on the school), charging only 1.5 times the in-state-tuition (which ranges from ($5,000 - $7,500 (or $7,500 - $11,500 for out-of-state reciprocity students). 

It’s a fascinating article; one that shows communities (and states) can reinvent themselves. In a time when high-cost for-profit universities have stepped in to fill student demands, North Dakota’s strategy proves to be leading edge.