A simple plan for a zero increase in tuition
I am sorry my colleagues on the Board of Regents dismissed
my idea for linking tuition in the coming school year to
state appropriations. I believe it would have ended up being
good for Iowa students and their parents, for the three
Regents universities, for the Iowa economy, for legislators
and for the Governor.
Indeed, we could have ended up with a zero tuition increase for next year — for the first time since 1980.
My proposal was never fully explained in the newspapers, so let me describe it:
There are two main sources of money for the so-called educational budgets at the three universities, and those are state appropriations and tuition. Historically, state appropriations provided the lion’s share of that money — the ratio was about 80-20 in 1980 — but in recent years the lines have crossed, and now tuition accounts for about 55 percent of the $1.2 billion educational budget and state appropriations account for about 40 percent. This is because state appropriations have been cut dramatically in recent years — about $180 million over three years — and tuition has continued to go up, rising about 20 percent between the time a freshman entered in the fall of 2008 and when she will graduate in the spring of 2012.
While universities work hard to control costs and increase productivity, their reflexive reaction when appropriations are cut is to look at increasing tuition. The Board of Regents, which oversees the universities, tries to temper this. For the coming year, the university officials after some discussion said they could produce balanced budgets with a 5 percent tuition increase even though it would take more than twice that amount to fill the budget cap.
So it was that a couple of weeks ago the Regents voted, 7 to 2, to implement that raise (which, when considering fees and special situations, is actually closer to 6 percent). Regent Ruth Harkin and I cast the two “no” votes.
I think the universities should be able to charge whatever they want in tuition for out-of-state students and for graduate students, so long as the out-of-state undergraduates pay an amount that is at least equal to the cost of their education. That is, in fact, the law, and each year the universities calculate that number; out-of-state undergraduate tuition easily exceeds it. Those fees should be based on marketing decisions and supply-and-demand.
But tuition for undergraduate Iowa residents is another story. One of the four prongs of the mission statement of the Board is to provide “high-quality accessible education to students.” To me, that means, especially, Iowa students. While we generally provide high-quality education, it is increasingly inaccessible because of the tuition and fees. In the coming year, tuition and fees will be around $7,500 a year, and the cost of attending the universities — as calculated by the schools, and including room and board and other costs — will be $20,495 at the University of Iowa, $19,658.60 at Iowa State and $18,925 at the University of Northern Iowa.
These are well beyond the reach of many Iowa students and their families. The majority of students graduate in debt, and, in fact, the graduates of Iowa’s public and private colleges graduate with more debt than counterparts in any other state. It takes 20 years or more for some of them to repay this money, a burden that dramatically affects their quality of life for decades and that drives some of them — young teachers and accountants, for example — to take higher-paying jobs out of state even though they’d rather stay in Iowa, close to family and friends.
Something has to be done about this.
My proposal was quite simple. The 5 percent tuition increase will generate about $17.5 million in added money from undergraduates who live in Iowa. Noting that the state is in better financial shape than it expected to be — indeed, the state now expects net receipts to rise almost $300 million this fiscal year and another $350 million next year — I proposed that we go to the Legislature or Governor and make a deal: For every $7 million they add back to the Regents budget for fiscal 2012, we will cut the proposed 5 percent rate by one percentage point. If they added $35 million — which could be done quite easily — we’d agree not to raise tuition at all for resident undergraduates.
The benefits are myriad. First, there would be no tuition increase for Iowa students for the first time in more than 20 years. Second, since it takes just $17.5 million to offset that whole 5 percent, the universities could add the other $17.5 million to their general budgets to be spent in whatever wise ways they deem. Third, it would help temper the frightening growth in student debt. Fourth, that in turn would prompt at least some students to stay in Iowa — if Gov. Terry Branstad wants to create 200,000 jobs, he needs those young graduates to stay here. Fifth, it would be political gold for the legislators who voted for it and the Governor who signed it. Sixth, it’s the right thing to do.
The Regents rejected this — “too late,” “not practical,” you “shouldn’t negotiate with politicians,” “it’s playing chicken” with the Legislature — and then voted for the 5 percent (really 6 percent) increase.
But it wasn’t too late, and it still isn’t. The Legislature and the Governor could still add back the money and put the conditions on it. They have the power to do it — and, I hope, the wisdom. CV
Michael Gartner’s term on the Board of Regents ends this month. He has served more than six years, including nearly three years as president.