Economics club research discovers tuition increases less than inflation


For the first time in at least seven years, K-State students will see their tuition increase by less than the inflation rate, according to the KSU Economics Club.

Each fall for the last seven years, the club has researched and recorded a student price index. This year the SPI rose 7.3 percent, while tuition rates at K-State increased 5.9 percent.

“I know in the past, like last year for example, tuition increases were a big part and a big component in our increase of inflation,” said Victoria Tidwell, senior in economics who helped research the SPI for the club.

The SPI is a compilation of prices of goods and services that students regularly buy. The prices are weighted by the percent of an average student’s income that is spent on those goods and services. The club’s study allotted 32 percent of a student’s budget to tuition.

The tuition increase this year was significantly less than in previous years, as tuition at K-State increased 8.7 percent and 13.5 percent the last two years, respectively.

“I thought it was interesting because tuition usually goes up a lot, and this year that was changed,” said Lisa Taylor, the club’s secretary and junior in mathematics and economics. “And that is good news for us as students.”

From 2002 to 2007, tuition at K-State increased a total of 117.4 percent, according to the economic club’s records.

“Contrary to some folks’ beliefs, no one wants to be increasing tuition at the rates that it has been going in recent years,” said Daniel Kuester, the club’s faculty adviser. “But when public sources of funds are diminishing, as they have been, it puts the emphasis on the university to raise funds some way to keep the lights on and keep a good staff in place.”

Kuester said he thought the decrease in public funds available to universities has caused tuition rates to rise. Tuition rates are decreasing this year, he said, because the reduction of these public funds is slowing.

“We had under a 6-percent increase in tuition,” he said. “This is now basically in line with inflation, which is certainly reasonable.”

From 2006 to 2007 the SPI increased 6.3 percent as students were coping with less inflationary gas prices. This year, students saw a 37 percent increase in gas prices, compared to just a 13 percent increase from 2006 to 2007.

“I would say that gas is certainly a primary culprit,” Kuester said of the reason for the rising SPI.

To conduct their study, club members volunteered to go around town and record prices. Each year the club records the same products and brands at the same time to ensure the results will be comparable to previous years.

Along with the increases in gas and tuition prices, the research showed increases in all but one category they recorded.

The price of housing has increased 6.2 percent this year. For the first time the club included greek housing prices in their report.

“That is a pretty common expense for people, so we decided to add it to the index this year,” said Taylor.

Without using the data from greek houses, the price index for student housing would have risen 7.1 percent rather than 6.2 percent.

Kuester said every year since he came to K-State in 2004, the SPI has increased more than the overall consumer price index, which is information students can put to use.

“I think it is good for students to be aware of where their money is going,” Kuester said. “I think it can be used as a good reason to [tell] mom and dad — if you are getting some help from home — ‘Hey, we’re being hit harder by inflation than the average American citizen.'”

The club started figuring the SPI in 2002, and was the first university to do so. K-State attracted coverage from CNN and USA Today, Kuester said.

“This has been our little innovation,” Tidwell said. “We decided to do this to see what students spend their money on, and how much price changes affect students.”

Since K-State pioneered the practice of establishing a student price index, several other schools have followed suit, but K-State has not collaborated with any other schools.

“I guess it would be interesting to find a national student price index,” Kuester said. “But we are mainly doing this as a service to the K-State students, and as an activity that can promote the Economics Club and give folks an opportunity to be involved with the Econ Club.”