Purdue University tuition freezes squeeze out in-state students

For four consecutive years, Purdue University has managed to freeze tuition rates, establishing the university as a pacesetter in the national drive to make college more accessible and affordable.

Yet putting tuition increases on ice might freeze some Indiana students out of Purdue altogether.

Since tuition rates were frozen at 2012 levels, 1,228 fewer undergraduates from Indiana attend the West Lafayette research institution, while 336 more non-residents attend the campus, according to the university's data digest.

Over the past decade, the land grant university has transformed from a majority-resident campus to one that now enrolls more out-of-state and international students.

It's a dilemma public universities across the country are facing in the wake of years of declining state funding and the economic downturn: How can a state institution uphold its mission to serve residents when those students, due to steep tuition discounts, are the least profitable?

Tuition freezes and faculty pay raises have only compounded the issue at Purdue.

It's no secret that out-of-state and international students pay much more to attend Purdue — think the equivalent of private university or Ivy League tuition. And as those applications grow, Purdue can select from the wealthiest, most talented students across the globe. Meanwhile, in-state students have ended up competing for fewer spaces on the prestigious West Lafayette campus.

Keeping balance

Alongside the issue of limited state funds — which have decreased more than $20 million between 2008-2014 — a conscious decision by previous administrations to become more selective put additional pressure on Purdue's main source of revenue, trimming the undergraduate student body by 2,506 spots. Enrollment dipped from a peak of nearly 32,000 undergraduates in 2008-09 to 29,255 in the 2014-15 school year.

Four consecutive tuition freezes and a 3.5 percent merit-based pay raise for staff next year cost another $90 million, according to information from Treasurer Bill Sullivan and director of financial planning and analysis Melissa Johnson.

Purdue President Mitch Daniels said some of the difference is made up by out-of-state and international students, who pay nearly $29,000 and $31,000, respectively, per year for tuition. That's compared to $10,002 paid by Indiana residents.

"It's also absolutely true that because we're so attractive to students from elsewhere, that's one thing that allows us to keep the cost of a Purdue education lower for Hoosiers," Daniels said. "There's no question about it, and everything has to be kept in balance."

Daniels said it's ultimately his decision on how many spots are available for specific student classifications. But Purdue's decision to enroll more non-residents, he noted, was made long before tuition was frozen, although the trend continued after Daniels took office.

"I don't know which was the chicken and the egg," he said. "In other words, becoming more selective ... meant that it was somewhat more non-resident students because people who apply from out-of-state have higher academic profiles. So seeking higher profiles led to the increase in non-resident percentage."

In the past seven years, Purdue slashed 4,614 spots for resident undergraduates and added 2,108 spots for non-resident undergraduates. At the same time, Indiana University increased the number of residents and non-residents seeking undergraduate degrees by nearly 200 and 1,000, respectively, according to the university's enrollment reports from 2008 and 2014.

During that time frame, Purdue reduced its share of in-state undergraduates by 10 percentage points, from 65 to 55 percent. IU's share fell 1.7 points, from 63.2 to 61.5 percent, said David Johnson, IU's vice provost of enrollment management.

In June, IU's Board of Trustees voted to freeze undergraduate tuition for the next two years, according to the Associated Press. Johnson said in an email that he doesn't anticipate the tuition freeze to significantly affect enrollment.

"At IU Bloomington, we are looking to hold relatively flat the number of non-residents we are seeking to enroll this fall," Johnson said in an email.

Privilege and prestige

Public universities are increasingly becoming "bastions of privilege," Stephen Burd, a senior policy analyst for the New America Foundation, said in a report titled "The Out-of-State Student Arms Race."

In a study of 424 public four-year colleges and universities, Burd found nearly half — including Purdue — provided merit aid to at least 10 percent of freshmen who had no financial need. He also found the institutions most entrenched in the practice tend to enroll more non-resident students than residents.

In other words, universities are using money that traditionally went to those with a financial need, Burd said, to entice their highest paying prospects to attend their school. The practice is becoming more and more pervasive nationwide, he noted.

"The search for additional money and the search for more prestige has led to schools looking for more out-of-state, for more affluent students," Burd said in a phone interview. "And so my big worry with all of this is that you're not only disadvantaging in-state students but probably the most vulnerable of them with fewer seats left over for lower-income, working-class students. ... (Universities are) spending huge amounts of merit aid on these affluent students so there's less money for students from lower-income backgrounds."

Purdue provided merit aid to about 10.3 percent of freshmen without need in 2014, according to its Common Data Set, a collection of information released by each institution reviewed in Burd's report. This fall, 550 out-of-state freshmen will receive some kind of merit aid, compared to 490 in-state freshmen, according to Pamela Horne, associate vice provost for enrollment management and dean of admissions.

During the 2014-15 school year, Purdue disbursed about $29 million in undergraduate merit aid that did not meet a need, compared to Indiana University's nearly $52 million and Ohio State University's $62 million, according to their Common Data Sets.

Purdue doesn't award any aid — merit or need-based — to international students, Horne said, unlike many of the university's peer institutions.

Minority majority

Non-resident students comprise the majority on Purdue's campus as a whole, accounting for 52 percent of the combined undergraduate, graduate and professional student population. In fact, Purdue enrolls more international students than any other public university in the country, according to a report by the U.S. Department of Homeland Security.

But Daniels said competition for graduate spots is a different process. That's why more than 75 percent come from outside Indiana.

"The graduate student decisions are made by individual faculty members in many cases and by the colleges and that's based on the strong reputation and attractiveness of our faculty and some of their programs," Daniels said. "Graduate students clamor and compete to come here and study with them, so that's a very different setting."

'An institution of first choice'

As Purdue's global profile continues to rise, the squeeze on in-state students may become only worse. Of the record-breaking 45,000 applications that flooded in earlier this year, fewer than 9,257 were from Indiana students, Horne said.

Until last spring, applications from Indiana students have declined in the past five years. Nearly 12,000 Indiana students applied to Purdue in 2010, while fewer than 8,700 students applied in 2014. High school guidance counselors, Horne said, have quickly got the message that it's difficult to get into Purdue.

"Word is out now that in order to prepare for what are really very rigorous academic programs at Purdue, students need to take the right classes in high school," Horne said.

Meanwhile, applications from foreign students nearly tripled between 2008-2014, increasing from 4,089 to 11,474.

"Purdue is becoming an institution of first choice for a lot of non-resident and international students," said Teresa Lubbers, Indiana commissioner for higher education.

Purdue's trend is one Lubbers has watched closely as Indiana attempts to build a highly skilled state labor force. Although about 65 percent to 70 percent of Indiana students who apply to Purdue are admitted to the West Lafayette campus, they have had more trouble getting into some of the university's most selective, sought-after programs, such as engineering.

Last year, 56 percent of Indiana residents who applied to the College of Engineering met its admission criteria; only a third chose to enroll. It's a problem that should be addressed from the K-12 level, as well, Lubbers said.

"What we need to do is make sure more Hoosier students in an area like engineering, which is so important to our economy, meet the engineering requirements to go into the engineering school," she said.

Another win-win?

Daniels said a Purdue degree is more accessible to Indiana residents than ever before. More than 90 percent of in-state students who finish the application process are accepted to the university or one of its regional campuses, he said.

He noted it's much more difficult to gain admission for non-residents, who on average must score 200 points higher on the SAT.

"We are meeting the Hoosier demand. It's much easier to get in here as a Hoosier applicant and the vast, vast majority of those who apply are accepted," Daniels said. "In fact, almost all of them are accepted somewhere in Purdue."

Of this year's Indiana applicants, Horne said a little over 500 students were left with no opportunity for admission.

"Most of those students, given their particular academic credentials, would probably be better off to start at Ivy Tech, where they're going to get more personal attention," she said.

Rep. Randy Truitt, R-West Lafayette, said he's "keeping a close eye" on accessibility to Indiana colleges.

"What we're looking at is ensuring that our universities have an application opportunity for Indiana residents, and that doesn't always mean going into the exact location where you want to go," said Truitt, who is chairman of the ways and means higher education subcommittee. "Our job is making sure there is an avenue for an individual to be successful."

Purdue is on the cusp of another major shift. Daniels' open letter last January set a goal of admitting 6,800 freshmen to the West Lafayette campus — about 400 more than last year — and discussed an overall move toward inclusiveness and larger enrollments.

"The answer has to be to bring aboard more students and still continue the improvement in success rates ... faculty have to embrace that it's part of their job not to weed them out in the old way, but to find and bring them along to the extent that they can," Daniels said.

The admissions office has apparently hit that goal, Horne said, although the mix of resident and non-resident freshmen won't change much. But more spots overall means more than 200 extra spots for Indiana students.

"We're very eager to admit more well-qualified students from Indiana," she said, "but for some programs it depends on the capacity we have available."

Horne noted shifts in enrollment don't happen overnight. It will take roughly four years for undergraduate enrollment to reach the 30,000-student target as smaller classes graduate and larger classes come in, she said. But more revenue and more in-state students could be the next win-win at Purdue.

"Life is a balance of all these questions ... in-state, out-of-state, high profile, more students," Daniels said. " ... Let's take in more. Let's accept the challenge to keep on improving our success."

A shift in student makeup

From 2008-2014, the number of spots for undergraduates:

-4,614 in-state residents.

+2,108 non-resident students.

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Who's applying?

Of 39,706 applications Purdue received in 2014, the number of applicants by residence:

8,685 in-state.

19,547 out-of-state.

11,474 international.

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But what does it cost?

The amount of tuition each type of student pays:

$10,002 Indiana residents.

$28,804 out-of-state residents.

$30,804 international students.