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

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.