Purdue University's Tuition Freeze: A Decade of Affordability
For over a decade, Purdue University has implemented a tuition freeze, a strategy that has garnered national attention amid rising college costs. While many universities have raised tuition in the last decade, Purdue University has frozen those costs. This article explores the details of Purdue's tuition freeze, its impact, and the broader implications for higher education affordability.
The Genesis of the Freeze
Prior to 2013, Purdue University had increased its price for 36 consecutive years. Mitch Daniels, the former Republican governor of Indiana and then-president of Purdue, questioned this trend and initiated a one-year timeout. This timeout eventually evolved into a decade-long commitment to keeping tuition costs stable.
The symbolic importance of keeping tuition under $10,000 was also a factor. Daniels even convinced the board of trustees to eliminate a pre-existing $10 fee for the rec center to maintain the $9,992 tuition.
Strategies for Maintaining the Freeze
Purdue University has not sacrificed quality or accessibility to maintain the tuition freeze. The university has grown the faculty and paid its faculty and staff above the peer group average every single year. Daniels insists he took no one big step to balance the books. He asked alumni for more contributions and made an annual effort to manage expenses.
Increased Enrollment
One of the key factors enabling Purdue to maintain the freeze is substantial growth in enrollment. The university is 30% bigger than it was when the freeze started. The revenues that have come from that without a price increase are the biggest single factor in allowing Purdue to avoid one.
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Efficient Cost Management
Purdue has focused on efficient cost management. Purdue flips that. They start with tuition, and they adjust revenue goals and spending to meet what they can afford.
Impact on Students and Families
The tuition freeze has had a significant impact on students and their families. If Purdue had grown its tuition and fees at the Big 10 average or the national average, our students' families would have sent us over $1 billion cumulatively more than they did the last 10 years. More than 99% of Purdue graduates pay back their student loans. It reflects the fact that they had to borrow less money, but also the fact that they left with a sense of personal responsibility that says you ought to live up to your obligations.
Income Share Agreements
Purdue inaugurated at Purdue income share agreements in which the student is not at risk. If life doesn't work out and they can't pay back or can't pay the stated percentage of income that was anticipated, the risk remains on the school or those who help the school provide those funds.
These agreements have triggered criticism. The federal Department of Education says, in fact, they do count as loans. Private investors finance students' educations in exchange for a percentage of their future incomes. Some Purdue students told the Indianapolis Star they did not understand the agreements they signed and didn't realize how much more they had to pay the investors later. Purdue itself has paused the program, saying it's changing vendors. But it supports legislation to establish national standards for the practice.
Broader Implications and Criticisms
Mitch Daniels believes that schools knowing that they were at risk for at least something would have been more careful about what they charged and probably a little more attentive to making sure they were teaching things that would enable a graduate to be successful and pay back the money they'd received.
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National Context
As a sector that has raised prices at the fastest rate of any category in the economy, including health care, collectively, our performance has not been admirable.
Other Initiatives
Indiana’s 15 public colleges and universities will freeze tuition through the next two academic years, Gov. Mike Braun announced Tuesday -- but there's a catch. The participating campuses will still be able to increase out-of-state and graduate tuition. “Keeping tuition flat keeps the door open for students of all backgrounds, all ZIP codes, and all walks of life,” Samantha Fleischaker, a commission member and student at the University of Southern Indiana, said in the release.
Future Outlook
Just in: #Purdue trustees endorse an unprecedented 14th consecutive year of frozen tuition for fall 2026. Base undergraduate tuition will remain $9,992 for in-state students and $28,794 for out-of-state through 2026-27. Decision will require formal approval in June.
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