A Differences-in-Differences Analysis of the Impact of the North Carolina Fixed Tuition Program on College Costs

ABSTRACT

In 2016, the North Carolina legislature implemented the North Carolina Fixed Tuition Program. This policy ensures that, once enrolled, an undergraduate student’s tuition rate at any of the state’s four-year public colleges will not increase for eight consecutive semesters of enrollment. While touted as an effort to increase affordability by helping students financially plan for college, prior research has found that these policies prompt institutions to raise the cost of attendance for undergraduate students. This study expands previous work on institutional pricing responses to tuition guarantee programs by both extending inquiry to another state context and by examining changes to revenue streams not included in prior work. Using differences-in-differences and event study approaches, I found that institutions in North Carolina increased in- and out-of-state graduate tuition rates and out-of-state undergraduate tuition rates in the wake of the Fixed Tuition Program.

KEYWORDS:

• State policy
• tuition guarantee
• college affordability

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Notes

1. Also referred to as fixed tuition programs/policies.

2. These institutions include: New College of Florida, University of Arkansas- Fort Smith, University of South Florida-Sarasota, New College of Florida, and Louisiana State University-Alexandria.

3. Texas is accredited by SACSCOC; however, I chose to exclude this state because Texas has implemented guaranteed tuition programs, which may bias point estimates. To maintain an adequate sample size, I included West Virginia in lieu of Texas. I chose West Virginia because it is in the same region as NC, and, thereby, may respond to a guaranteed tuition program in a similar way. Further, I excluded West Virginia University from the analyses because it reported data for two child institutions that were not in the sample. Results of the analyses did not change upon removal.

4. Institutions in graduate “low” group include Winston Salem State University, UNC School of the Arts, UNC-Wilmington, UNC-Asheville, North Carolina A&T State University, Fayetteville State University, and Appalachian State University. Institutions in graduate “high” group include UNC-Greensboro, UNC-Charlotte, UNC-Chapel Hill, North Carolina State University, North Carolina Central University, and East Carolina University.

5. Institutions in undergraduate “low” group include Winston Salem State University, Fayetteville State University, Appalachian State University, UNC-Greensboro, UNC-Charlotte, and East Carolina University. Institutions in undergraduate “high” group include North Carolina A&T University, North Carolina Central University, North Carolina State University, UNC-Asheville, UNC-Chapel Hill, UNC-Wilmington, UNC School of the Arts.

6. For brevity, parallel trends tests (and robustness checks reported later) were only discussed for the main models. See Tables 7 and 8 for subgroup leads test.