Despite both political and media attention, the student loan crisis has not improved. The average student loan balance has grown 39% from 2008 to 2022.
One potential idea to improve the situation: charging different tuition rates depending on a student's major. For some education experts, it seems unfair that a pre-med student would pay the same amount as an art history major. This is known as differential tuition.
However, despite the seemingly clear rationale - future doctors can afford to pay more than philosophy majors - there are still important considerations.
Do Colleges Currently Charge the Same Amount
It’s not clear exactly how many colleges charge the same base tuition rate for all majors compared to how many schools use differential tuition. Either way, it’s not unheard of to find schools that have begun the process of charging different rates.
For example, at the University of Illinois, a chemical engineering freshman starting in the fall of 2025 and taking 15 credit hours will pay $9,186.00. According to the Bureau of Labor Statistics, the median salary for a chemical engineer is $112,100. The same tuition rate applies for computer science majors, where the average salary for a software developer is $130,160, according to the BLS.
However, a journalism major would only have to pay $6,886.00 for the same number of credit hours. A painting major would pay slightly more, at $7,310.00.
The University of Iowa practices a similar approach. The base rate for tuition for in-state undergraduate students is $11,283, but students in more lucrative fields may pay up to 30% more per year.
Students at the University of Iowa in the following categories pay more for:
| Major | In-State Rate | Out-of-State Rate |
|---|---|---|
| Base Rate | $11,283 | $33,371 |
| Business | $13,375 for first and second-year students and $15,324 for third and fourth-year students | $35,526 for first and second-year students nonresidents); $37,673 for nonresidents for third and fourth-year students |
| Computer Science | Same rate for first and second-year students; $12,395 for third and fourth-year students | $33,371 for first and second-year students; $34,496 for third and fourth-year students |
| Engineering | $12,802 for first-year students and $14,801 for second through fourth-year students | $34,887 for first-year students and $37,203 for second through fourth-year students |
| Nursing | $14,799 for all students | $37,083 for all students |
Part of the difference may be due to other factors. For example, business school faculty often have higher salaries than professors in other fields. Also, science students often pay extra for lab fees.
Should Colleges Charge Different Tuitions for Different Majors
While some schools may charge the same hourly tuition rate for all majors, other expenses can differ. For example, STEM majors often have to pay extra lab fees that liberal arts majors don’t incur.
Some states have also used differential pricing to either increase supply in underrepresented fields or decrease oversaturation in certain fields.
“If you need more college graduates in specific fields, perhaps you should charge less to students who will work in those fields,” Kantrowitz said. “So, while STEM majors may earn more after graduation, you might want to charge less to encourage more students to major in those fields.”
The Downsides of Tuition Differential
While it seems to make sense to charge more to students who will be able to afford to pay more later, some critics worry that a higher price tag will dissuade students from choosing those potentially lucrative majors.
And for students who pick a high-paying field, like business or engineering, only to discover that they hate it, they may face a penalty for switching. For example, if they’ve taken out thousands of dollars more only to switch to a liberal arts major, they’re still responsible for paying back that money - even if their future high-paying salary is gone.
Also, some researchers worry that differential tuition will result in continued inequality in certain fields. A 2013 paper from the National Bureau of Economic Research found that when tuition rates increased for certain majors, fewer women and minorities enrolled. The higher tuition rate could serve as a barrier to entry, because it still requires that students with fewer resources fund their education.
“Differential tuition may be problematic if it affects the ability of low-income students to pursue degrees in fields of study that pay more,” said Mark Kantrowitz, author of “How to Appeal for More College Financial Aid.” “There's also often a lack of transparency, where the published tuition and fees are the lowest tuition figures and fail to disclose the higher costs for specific fields.”
“Sometimes, these definitions work in different directions,” Kantrowtiz said. “For example, an art class may have higher costs for supplies, but artists tend to earn less after graduation. So, do you charge more because of the higher cost of instruction, or less because the graduates will be less able to repay the debt?”
Alternatives to Tuition Differential
Some schools have already tried this method, in a roundabout way. For example, up until 2022, Purdue University offered income-share agreements (ISA), as an alternative to student loans.
An income-share agreement is where you agree to pay back an amount based on your earnings, not the amount you borrowed.
For high-paying majors, this can result in students paying back significantly more than they took out. But if you’re in a low-paying job, then you may get a better deal. Theoretically, this would help students who struggle to find work, can only work part-time or take time off due to disability, childrearing and more.
However, because ISAs are categorized differently than loans, refinancing them to get a lower rate is nearly impossible. Also, ISAs are still often only available for those in higher-earning majors, which somewhat defeats the purpose. It’s those with lower-earning degrees that need more help paying back their student loans after they graduate. This is another reason why many ISAs have been heavily criticized lately.