Financial disparities among public universities: How leading institutions drive widening tuition gaps

Financial disparities among U.S. public institutions of higher education are a growing concern, as these gaps contribute to broader educational inequities and the closure of smaller institutions. This quantitative study clarifies the extent of these disparities and examines whether leading institutions are primarily responsible for driving this divide. We analyzed 18 years of tuition per student and retention rate data from 1619 public institutions of higher education across the U.S. – categorized into flagship (a mode of elite public university which has been replicated in many other countries), public four-year, and public two-year institutions – using 2004–2021 data from the Integrated Postsecondary Education Data System (IPEDS). Employing a Linear Quantile Mixed Model (LQMM), our results show that tuition per student is rising significantly faster in flagship institutions, which started from a higher revenue base, than in other public four-year and two-year institutions, widening the gap. Furthermore, within each institutional category, institutions in higher tuition percentiles show steeper tuition increases compared to those in lower percentiles. Despite the widening tuition gap, the gap in retention rates has remained consistent over time, suggesting that the highest-cost universities have little incentive to rein in cost increases. These institutional disparities may further deepen educational inequality by intensifying socioeconomic stratification within an increasingly market-driven higher education landscape, thereby prompting critical reflection on the role of U.S. public universities in widening tuition gaps.