By Tom Still

MADISON – Imagine you’re shopping for a car, groceries,
clothing or almost any consumer product. Price matters… but so does quality. In
fact, survey research indicates you may be turned off by prices that are too
low because you may suspect something is wrong with the product.

The same phenomenon can apply to college tuition rates.

An emerging dilemma at the UW-Madison involves state
government’s two-year ban on raising tuition, not only for in-state
undergraduates, but for out-of-state students of all descriptions as well as
professional school students in fields such as medicine, veterinary science,
business and pharmacy.

The tuition freeze for in-state undergraduates may make
sense from a policy perspective: Wisconsin needs more “brain workers” and high
tuition is a barrier for many students. The freeze is out of whack with market
realities, however, when it comes to out-of-state students who are willing and
able to pay more and professional school students who already pay some of the
nation’s lowest prices.

Read this column in the Wisconsin State Journal here

Veterinary students from Illinois, Michigan, Ohio or
Minnesota can pay less to attend Wisconsin’s School of Veterinary Medicine at
non-resident rates ($25,899 in 2013-2014) than they would pay in resident
tuition in their home states. Wisconsin’s non-resident tuition rate for
veterinary medicine was the lowest of 28 U.S. schools in that academic year –
by more than $5,500. Within the Big Ten Conference alone, Wisconsin’s vet
school tuition for non-residents is nearly $19,000 cheaper than the next lowest
non-resident rate at Purdue University.

It’s a similar story in the School of Medicine and Public
Health, where Wisconsin’s tuition and fees total $25,919 for a first-year
resident and $34,815 for a first-year non-resident. That’s $17,606 less per
year than the Medical College of Wisconsin on resident tuition and well behind
Iowa, Indiana, Michigan, Michigan State, Minnesota, Illinois and Northwestern
in every category.

Skeptics might ask: Well, is that price gap because
Wisconsin’s professional schools are ranked below those in other states or
within the Big Ten Conference?

While there’s always a better school some place, Wisconsin
competes well on quality with most of its peers. That may not be true for long
if the tuition gap continues to widen.

“We are falling farther behind each year, as other schools
proceed with annual increases of 3 percent or so, and we remain frozen,” said
Dr. Robert Golden, dean of the medical school and vice chancellor for medical
affairs. “We are at the point where we cannot maintain the technologies and
other key aspects of our educational program without relief in this area.”

UW-Madison Chancellor Rebecca Blank has argued that her
campus needs more flexibility to set tuition rates that are market-driven.
That’s particularly true with professional schools, which are expected to
provide unique services to students, and to create more financial independence
for such schools. It’s hard to argue that Wisconsin should be cranking out more
veterinarians or general practice physicians if the school is struggling.

There’s also a disadvantage to attracting top student talent
if there’s a perception that low tuition is somehow tied to low quality.

“Few students think it’s an advantage to go to one of the
cheapest schools in the country,” Blank said.

The tuition freeze was enacted in 2013 when the Legislature
discovered a $648-million program revenue surplus within the system. In April
2014, Gov. Scott Walker announced he would like to see the freeze extended for
another two years.

Lawmakers are right to be concerned about Wisconsin students
paying more at a time when reserve funds appear high, but as UW System
President Ray Cross noted during an October Board of Regents meeting, the raw
revenue balances should not be confused with “true reserves.” Often, reserves
are committed funds tied to performance metrics on research grants and other

“We can account for every dollar,” Cross said.

Budget and tuition freezes have political appeal and can
work for a while, but an across-the-board approach can hurt over time if market
conditions are ignored. The market is telling policymakers that out-of-state
students will choose to pay more (which helps to underwrite Wisconsin students)
and that most professional school costs are too low to be sustainable. When the
next state budget debate gets underway in 2015, proposals to grant more
flexibility would make market sense.