UA employees--get the facts on tuition proposals

You may have heard or read about tuition increases being proposed by President Hamilton and supported by the three chancellors. Unfortunately, the news reports have had some incorrect information. We thought employees would like to know the real deal, so here’s a brief overview.

The proposal is two pronged and, if approved by the Board of Regents in September, would affect the 2011-2012 school year for 100 and 200 level courses only; and all levels except graduate for the 2012-2013 school year.

The dollar amount for the 2011-2012 proposal would result in an $8 per credit increase from previously approved levels for 100 and 200 courses only, or a potential $120/year increase for a student taking a 30-credit load (half of which are lower division). Students taking no lower division wouldn’t see an increase over previously approved amounts that year.

For the 2012-2013 school year, tuition would increase under one of these scenarios (not both):

  • At 10 percent: a $16 per credit increase for lower division/$19 per credit increase upper division, or roughly $525 annually for a student taking 30 credits, a 50-50 mix of upper and lower division courses, or;
  • At 12 percent: a $19 per credit increase for lower division/$22 per credit increase for upper division, or roughly $615 annual increase for a student taking 30 credits for the year, with a  50-50 mix of upper and lower division courses.

In other words, students taking 15 lower division courses in 2011-2012 would see a $120 increase over previously approved levels. For the 2012-2013 school year, the change would range from an additional $525 to $615 increase in tuition, depending on the student’s credit load and mix.

UA’s tuition rate is on the low end compared to Western states and the rest of the nation. (See http://www.alaska.edu/files/opa/Western-States-Tuition.pdf  and http://www.alaska.edu/files/opa/National-Tuition-Report.pdf).

Nine of the 15 Western states in the WICHE region have higher tuition at their public universities than Alaska. Nationally, UA tuition is the 44th lowest of all 50 states.

President Hamilton, per board policy, must notify the regents and student government leaders of tuition proposals by April 15 of each year. He sent out his notice April 14, but Associate Vice President Saichi Oba began notifying student government leaders and other governance groups prior to that as an early head’s up.

This proposal comes after thorough discussion and support of all three chancellors. However, it will be up to the Board of Regents to make the final determination. The board will discuss this issue at the Sept. 2010 meeting in Juneau. The April 14 memo marks the start of the conversation. All three chancellors intend to engage students in the discussion, and some have already begun to do so.

For comparative purposes, current year annualized tuition is roughly $4,500, assuming resident undergraduate taking 15 lower division and 15 upper division credits, for a total 30 credit load. This doesn’t include fees, room/board or books. Also note that tuition is slightly lower at Prince William Sound Community College and Kodiak College. Tuition always depends on credit load and can vary from student to student quite a bit.

The UA administration is pleased to see healthy enrollments right now. But additional students, while good news, means additional subsidy is necessary. As you may know, tuition revenue only covers roughly one-third of the actual cost of delivering the education and training.

So, why do university leaders think UA should increase its tuition? It comes down to prudent fiscal management. While the university has received an increase in state general fund dollars in recent years, this level of state funding hasn’t kept pace with real day-to-day costs, despite aggressive cost containment measures and reallocations on the part of the administration. It also hasn’t kept pace with expanded workforce programs for students in high-demand job areas.

In addition, the university is looking at tougher financial times in the years ahead. The Legislature’s budget includes intent language that says, in the future, the university must restrict its budget request for state general funds to 129 and then eventually 125 percent of actual UA generated receipts. This means for every $1 UA generates, the Legislature will provide state general funds up to a cap of $1.29-$1.25. This cap hasn’t existed previously and represents a challenging future budget environment. (See URL for latest Legislative update).

There are other fiscal pressures as well. These include increased day-to-day costs to simply maintain existing levels of service; reductions in private giving last year due to the economic recession; responding to student demand in new or expanded academic programs; and a leveling off in research capacity (ie federal research grants).

New programs for students in recent years have been among the most costly. This is because they’re mostly in highly technical and skilled fields that are expensive to deliver, such as allied health programs, including radiation technology, dental assisting, nursing, process industry technologies (oil/gas/mining), and other high-demand workforce fields.

But this doesn’t mean the university only concerns itself with the revenue side of the balance sheet. The expense side is just as important.

The president and chancellors constantly work to seek program and administrative efficiencies and cost savings while minimizing impacts to programs and students. The administration has already worked aggressively in this area. Some examples include:

  • UA Choice health care: Plan costs continue to rise, so UA has begun to trim back on services while asking employees to pay more.
  • Caps on pensions were put into place years ago, saving $3.2 million annually compared to the state’s SBS. (SBS is $6,700 per person/UA pension cap is $3,200)
  • UA’s per diem is the lowest in state government ($44/day).
  • Aggressive negotiation for lower vendor rates for health care and pharmacy benefits, preferred health care providers, expanded disease management and a three-year vesting requirement under the university’s Optional Retirement Program resulted in an $11million cost avoidance last year alone.
  • Travel costs at the System office were reduced by 37 percent in FY09.
  • President Hamilton hasn’t replaced two vice presidential positions.
  • Executives did not receive across-the-board pay increases last year.
  • New job openings are held open while they are scrutinized by UA leaders known as the Statewide Executive Group. 

While discussions about tuition increases are never popular, it’s important that our employees know that UA’s policy aims to inform and engage students early. This practice is unusual among universities and colleges but UA finds it’s important to students and families for planning purposes.

UA also will continue to support and advocate for increased financial aid in Alaska, which is a state responsibility. Many others states in the union have robust financial aid programs, making postsecondary education and training affordable. Sadly, that hasn’t been the case in Alaska. This issue received considerable attention in the Legislature this year, but more must be done. As they have in the past, UA leaders will continue to support increased need- and merit-based aid in Alaska.

There is some good news with financial aid. Pell Grants increased this year to the current $5,350 level and are scheduled to increase again next year by $200, to $5,550. The state-run AlaskaAdvantage program will increase its award for need-based grants from $2,000 per year to $3,000. These are positive steps.

The Legislature is considering options to expand financial aid in Alaska, and has appointed a task force to look into merit and need-based scholarships. The university has long supported increasing the amount of financial aid available. The university intends to fully engage in the task force process and will continue advocating for financial aid for students.


Back to Top