Colleges Seek Out-of-State Solution of Financial Crisis
 Universities in America cannot survive on tuition alone. There are a dozen reasons why colleges need increased funding every year, but the bottom line is that many are being affected by the financial crisis.
Take Colorado Mesa University (CMU) for example. Like most universities in America, Colorado Mesa was par for the course. Before the financial collapse in 2008, the university had a slim 5% of out-of-state students making up their student body. And unless we’re speaking about popular universities in a state, every other university within that—which is the majority of universities—deal with roughly a 90% in-state student body.
This causes many colleges to suffer financially, because in-state students pay exponentially less money to attend the school than out-of-state students. Coupled with reduced funding from states and the federal government’s loan-backing driving tuition costs up for all universities, many institutions are suffering and are forced to cut programs and members of faculty to make ends meet.
So Colorado Mesa University’s solution was simple: attract more out-of-state students to make up the loss. Since out-of-students pay upwards of 50-60% higher tuition costs, an increase in the out-of-state portion of the student body could very literally save a university from financial crisis.
CMU’s Simple yet Brilliant Approach
How do you attract out-of-state students to your school when you’re not even the most sought-after school in your own state? Well, you go on a PR campaign to spread the word about your university.
While every high-school graduate dreams of attending schools like Harvard and MIT and Cal Berkley and the University of Miami, the overwhelming majority of students have to quickly face a few realities, like the exceedingly high standards of the best schools and their outrageous costs for attendance. This means, at the end of the day, students settle on simplistic universities that emphasize a quintessential collegiate atmosphere and higher learning – universities like CMU.
Knowing this, CMU realized they only needed to get the word out, so they placed a recruiter in California, and also placed other admin representatives of the school in other “feeder” states like Utah, Wyoming, and even Hawaii.
To date, CMU’s work has paid off in a big way. Last fall, out-of-state students comprised just over 12% of CMU’s study body, adding an additional $5 million in revenue to the school’s coffers according to some estimates.
CMU president Tom Foster, the man responsible for this new approach, states that he wants to see CMU’s out-of-state percentage reach 25% within five years. At this rate, he may not only hit that number but may also exceed it.
According to Foster,” If we can continue to grow—but grow out-of-state faster—that will work well for us.”
Many schools around the nation are also trying this same approach. Schools from Ohio to California are doing what they can to target out-of-state students. For schools with large sport programs and national notoriety, this isn’t an issue. But for everyone else, the extra tuition is needed to flourish.
In California, state funding to the university education system has been slashed by over $650 million this year alone, and unless the state can meet its new revenue projections, funding could be slashed by an additional $100 million going forward.
The University of California’s Commission on the Future suggested that many California colleges use an out-of-state approach to help make up budget cuts. In only a year, UC’s out-of-state admission has increased to 12.3%, up from only 8% last year.
California is hoping for a 10% increase statewide, and many other states are now trying the same approach to put the onus on the students to fund the universities instead of the taxpayers of the particular state.
In the long run, this approach is certainly one that could backfire. After all, most students do not realize that attending a school in-state is so much cheaper universally. They fall in love with a school and go into dept—or put their parents into debt—to go there, so universities are playing with fire in a sense, relying on increased out-of-state traffic to pay inflated rates.
In the short-term, however, this measure is working for many schools across the country whose budget cuts have led to many program cuts. If these universities can keep their heads above water until the economy bounces back, tuition rates are suspected to drop in order to permanently accommodate out-of-state traffic.
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