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ERIC Number: EJ1082321
Record Type: Journal
Publication Date: 2015
Pages: 32
Abstractor: ERIC
ISSN: ISSN-0098-9495
Guaranteed Tuition Policies and State General Appropriations for Higher Education: A Difference-in-Difference Analysis
Delaney, Jennifer A.; Kearney, Tyler D.
Journal of Education Finance, v40 n4 p359-390 Spr 2015
This study explores the impact of state-level guaranteed tuition laws on state general appropriations for higher education. Using the "Truth-in-Tuition" law that was implemented in Illinois in 2004 as the treatment condition, this study analyzes data from 2000-2012. To test the direction and size of the effect on state general appropriations, this work uses a quasi-experimental, difference-in-difference methodology with a national panel dataset of public four-year institutions. Institutions in Illinois experienced significant decreases in state appropriations following the introduction of the guaranteed tuition law compared to the secular trend. In the baseline model presented in this paper, the magnitude of the cut to higher education institutions is shown to be $29.6 million, or approximately 20%, compared to the 2004 mean, on average, as compared to institutions that were not subject to guaranteed tuition laws. Both the direction and the magnitude of the finding are robust to alternative specifications including models that compare institutions with similar governance structures, Carnegie classifications, and in models that consider the impact over time. The results of the study have implications for both state policymakers and university leaders. While there is clearly a value to the predictability offered by guaranteed tuition (the increasing number of institutions that voluntarily offer these programs is evidence of the increasing demand for predictability in tuition pricing), this study highlights that these programs may have unintended consequences. Coupled with the evidence that state level guaranteed tuition laws drive tuition increases, the findings from this study provide more evidence that these laws may not be beneficial to all stakeholders. The mounting evidence seems to suggest that these laws may not be advisable public policy and it is hoped that this study will shape policy discussions in states that have implemented (i.e., Illinois, Oklahoma, Texas) or are currently considering these policies. [This paper was presented at the 2014 National Education Finance Conference in Louisville, KY, and the 2014 American Educational Research Association Annual Conference in Philadelphia, PA.]
University of Illinois Press. 1325 South Oak Street, Champaign, IL 61820-6903. Tel: 217-244-0626; Fax: 217-244-8082; e-mail:; Web site:
Publication Type: Journal Articles; Speeches/Meeting Papers; Reports - Research
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: National Center for Education Statistics (ED); National Postsecondary Education Cooperative (ED); National Science Foundation (NSF)
Authoring Institution: N/A
Identifiers - Location: Illinois; Oklahoma; Texas
Grant or Contract Numbers: RG1332