In 2010, the average college-tuition bill ate up nearly 40 percent of median earnings in the United States. In 2001, it accounted for less than a quarter of a family’s paycheck.
As the cost of higher education has spiraled upward and incomes have lagged in recent years, how to pay for college has turned into a kitchen-table issue for more and more American families. Unless, of course, you happen to work on a college campus.
At many higher-education institutions, employees rarely write tuition checks—or at least not sizable ones—for their children, who receive free or discounted tuition. That perk, which nearly 90 percent of colleges provide, according to the College and University Professional Association for Human Resources, has for many people been one of the most attractive reasons to work in academe.
While colleges have tightened the benefit in recent years—for instance, many no longer cover tuition at other institutions, or the full cost of education—the generous subsidy smacks of an entitled ivory tower that is far removed from the concerns of everyday people. After all, how can faculty members and administrators truly understand the financial pain that comes with rising tuition if they don’t need to pay it themselves?
Tuition hikes are fine when someone else pays the real cost, and in this case, it’s typically other students at a college who end up footing the bill for some professor’s kid to go there free or at a reduced price. As tuition rates have increased, tuition remission has evolved from a nice extra to a big-ticket benefit, surpassing health care for those workers who take advantage of it in a particular year.
Tuition benefits for employees are one of the third rails of campus life; few talk about how they contribute to the uptick in compensation costs over all, which is one of the primary reasons college costs so much. At public research universities, the cost of benefits per full-time employee rose 5.2 percent a year from 2002 to 2008. Over all, about 20 percent of payroll costs come from employee benefits, the Delta Cost Project estimates.
At Duke University, some 1,200 children of employees enjoy discounted tuition this year, not only there but at other colleges eligible under the benefit program. Duke officials refuse to say how much the program costs, but by my calculation, if every child received the maximum grant ($16,507 per semester), the benefit could run the university upward of $39-million this year alone.
College officials like to point out that all types of employees receive this benefit, including the children of secretaries and janitors.
But given that students from higher-income families attend college in disproportionate numbers compared with the rest of the population, it’s likely that the spoils go largely to dependents of highly paid administrators and professors (and usually to full-time ones at that, not to adjuncts or the contract workers dishing out food in the dining hall). At one elite private college in the Northeast, of the 30 employees taking advantage of free tuition at the institution (more than $43,000 this year), only seven are hourly workers, with 17 administrative employees and six faculty making up the rest.
The time has come for colleges to rethink whether all of their employees should fully benefit from this subsidy, and for Congress to tax the perk, as it has considered doing in the past. In 2005, a Congressional committee that conducted a widespread review of the federal tax code to find ways to generate more revenue estimated that taxing tuition benefits would bring in $1.9-billion over a decade. In its report, the committee said failing to tax the benefit was unfair because it was available to only a “limited group of taxpayers.”
Within higher education, the panel noted, the perk “may be available primarily to those working for educational institutions which have the greatest resources and by employees of the most resource-rich schools within such institutions because such institutions and schools may be in the best financial position to provide such benefits.” Indeed, the tuition subsidy is often most generous at wealthy, private institutions.
The history of the tuition benefit harks back to a time when colleges needed to offer such perks to attract candidates to lowly paid campus jobs. But the academic job market today is flooded with too many applicants for too few jobs in plenty of disciplines.
What’s more, the benefits offered in higher education are now seen as generous when compared with those in other major industries, which cut back during the recession. For example, employees in higher education are more confident that they’ll have enough money to live comfortably in their retirement, compared with the American work force in general, because of retirement contributions provided by colleges, according to surveys by the TIAA-CREF Institute.
Colleges should adopt a more progressive system for tuition reimbursement by focusing their dollars on the workers who need it the most—staff and lower-paid faculty members, including part-timers—and then offering smaller payments to higher-paid employees until the benefit disappears altogether for the employees at the top of the pay scale.
In fact, it’s staff members at colleges who seem to care most about this benefit. In The Chronicle’s annual Great Colleges to Work For survey, tuition reimbursement is a greater predictor of overall workplace satisfaction for staff members than it is for professors or administrators.
Reducing tuition benefits for some faculty members and administrators, and eliminating it for a few, would send a strong message to the American public frustrated with rising college costs. It would show that academics can relate to their anxieties about paying tuition bills while still recognizing this as an important perk for those college workers who need and care about it the most.
