Feb. 4, 2010

Regents approve tuition increase, rescind spring surcharge

by Anne Krapfl

Meeting Feb. 4 in Ames, the state Board of Regents approved a 6 percent tuition increase for in-state students at Iowa State for next year, but moments later unanimously voted to rescind a $100-per-student surcharge already billed this spring. Tuition for out-of-state students will be 4.1 percent higher next year.

Returning the spring surcharge to students is contingent on the Iowa Legislature approving Gov. Chet Culver's proposal for supplementary appropriations to the three regent universities yet this fiscal year. Iowa State's supplemental appropriation is a proposed $10.8 million. The student surcharge would have generated an additional $2.4 million.

Vice president for business and finance Warren Madden told the board that returning the surcharge would create "minimal administrative issues." He said the surcharge (prorated for part-time students), would be credited to student accounts once the Legislature approves the proposed supplemental appropriation to Iowa State. Ideally, all that occurs before many students leave campus in early May, several thousand of who will graduate, he said.

Noting that the surcharge wasn't terribly popular among the regents when they approved it in December (in fact, three voted against it), regent Robert Downer said that the possibility of additional state funding would change -- at least a little -- the financial situation at the universities. In that scenario, the surcharge should be returned to students, he said.

Tuition and mandatory fees

The board's vote on tuition and fees was not unanimous, with regents Michael Gartner and Ruth Harkin voting against them. Mandatory student fees at Iowa State -- which cover things like health insurance, student activities and computer support -- will remain at $895, the same as this year. So, the combined tuition and fee increases next year look like this:

Approved tuition for 2010-11

Tuition Increase (%) Tuition and fees Increase (%)
Undergraduates $6,102 6.0 $6,997 5.2
Graduates $7,120 6.0 $7,969 5.3
Undergraduates $17,668 4.1 $18,563 3.9
Graduates $18,548 4.1 $19,397 3.9

College of Business junior and senior undergraduates will pay an additional $500 next fall, the second of a proposed three years of supplemental tuition intended to improve faculty-student ratios and expand student leadership opportunities. The board first approved this schedule in December 2008.

Possible supplement yet this spring

Culver's proposed FY11 budget, released Jan. 27, includes some one-time supplemental appropriations for the current fiscal year. A condition of allocating and spending federal stimulus funds is that state support of units receiving those one-time funds not fall below FY2006 levels. Culver's proposed supplemental appropriations, including $10.8 million to Iowa State's general university line item, are necessary to satisfy that condition. The 2010 Legislature still must approve the supplemental appropriations, which would become part of the base budget for FY11.

There are no supplemental funds proposed for other Iowa State units that receive a direct state appropriation, such as the Agriculture and Home Economics Experiment Station, Veterinary Diagnostic Lab, Leopold Center or Cooperative Extension.

A closer look at student debt

The board accepted a report from a task force working since June to find root causes of high average student debt levels in Iowa and strategies for enrolling more low-income students at the regent universities. ISU executive assistant to the president Tahira Hira chaired the task force and members included business and finance VPs, financial aid and foundation directors and student government presidents from all three universities.

Hira reported on six factors that impact student debt. Three of them -- tuition levels, student demographics and cost of living -- are favorable or neutral in Iowa, she said. The group's recommendations focused on the other three, which are not so favorable in Iowa: volume of student scholarship funds in university endowments, university financial aid packages, and state policies covering student aid. For example, the study found that state need-based aid in Iowa for students attending public universities is the lowest in the country. To counter these, the task force developed seven proposals:

  • Create and adequately fund a need-based state grant program dedicated to students attending Iowa public universities
  • Fund the Iowa Work-Study Program at no less than the FY2000 level (about $1.6 million, current funding is $0)
  • Develop strategies for collaborative lobbying efforts to increase federal student aid funding opportunities for Iowa public universities
  • Maintain Iowa public university undergraduate tuition set-aside rates at no less than current levels (minimum requirement is 15 percent; at Iowa State this year, the actual level is about 22 percent)
  • Continue the fundraising priority for need-based and merit-based scholarships
  • Add financial education staff, as needed, to the universities' financial aid departments
  • Require all undergraduate students, including transfer students, to complete a financial education component during their first year

The board referred the task force's recommendations to board staff to develop a comprehensive plan that addresses the issues. Board members also presented several questions to Hira for her group to answer. They included:

  • If parent debt for their students' educations were to be factored in, how does Iowa rank nationally? (Current data only considers debt in the students' names.)
  • Do we know if Iowa students spend/borrow more due to lifestyle choices they make?
  • What's the financial hit to universities (considering tuition, residence hall and meal fees, etc) when they succeed at graduating more students in four years, instead of five or six?

Name changes in Business college

The board also approved these changes in the College of Business:

  • Rename the department of logistics, operations and management systems to: department of supply chain and information systems.
  • Merge two bachelor of science programs (logistics and supply chain management, and operations and supply chain management) into one: supply chain management.

New student scholarship

Board president David Miles opened the meeting by announcing a new need-based student scholarship at the three regent universities. Beginning in fall 2011, approximately $36,000 will be available each year at each school. The scholarship fund was created by the Axel and Mary Peterson Charitable Trust at the Community Foundation in Bettendorf. Axel Peterson died in 1997, Mary in 2009. About half of the scholarship funds will assist nursing and engineering students, the other half will assist students in any academic discipline.