John Hult, South Dakota Searchlight
South Dakota’s state universities have lower tuition prices than any surrounding state, but the final price students pay is still the highest in the region on average.
That’s because other states allow their schools to set custom tuition prices for students, and they all have more robust income-based financial aid programs than South Dakota, Board of Regents Director Nathan Lukkes told lawmakers on Tuesday.
The note on “sticker price” vs. net price of regional tuition was part of a discussion on the board’s performance measures with the Government Operations and Audit Committee meeting in Pierre.
The price of college in comparison to South Dakota’s neighbors was among the metrics Lukkes presented to lawmakers, alongside figures on student retention and academic completion, nursing licensure and the percentage of graduates in teaching, health care, business, science, technology, engineering and math.
Sen. Dean Wink, R-Howes, wanted to know how South Dakota schools’ regional net price ranking is so high in spite of their lower tuition rates.
“Where are we getting outgunned? Is it public or is it private?” said Howes.
Private institutions and public universities in other states have advantages South Dakota does not, Lukkes said, even in the face of price controls.
Recent tuition freezes have held down the sticker price at schools like South Dakota State University or Black Hills State University, Lukkes said. In 2020, he said, Montana, North Dakota and Wyoming had lower sticker prices for tuition.
Moving to number one in that metric hasn’t moved the needle on South Dakota’s regional net price ranking, though. Surrounding states have more financial assistance options for students with lower incomes. Minnesota’s North Star Promise program offers free in-state tuition to families with an adjusted gross income of $80,000 or less each year, Lukkes said.
A 15% increase in funding for the South Dakota’s Opportunity Scholarship in 2023 and the launch of the Freedom Scholarship in 2022 have helped improve the options for students with lower incomes.
“Even though we’ve gotten a lot better, we’re way behind the competition,” Lukkes said.
Private institutions, as well as a handful of out-of-state public institutions, also adjust prices for students.
“They’ll have a sticker price, and then they can essentially cut off 10%, 20%, whatever they think they need to give you to sweeten the deal,” Lukkes said. “That’s not something that we do here in South Dakota.”
There are advantages to that practice, he said, but he also said “it’s easy to get in a spot where you’re chasing your tail and giving away more than you can recoup with enrollment growth.”