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Wednesday, April 17,2013

Trustees to vote on tuition hike, look at ‘guaranteed tuition’ plan

When the Ohio University Board of Trustees meets Friday, it will be asked to approve a 1.6 percent tuition increase for undergraduates on the Athens campus, as well as an increase in room and board rates.

The Trustees will also hear a detailed outline of how a proposed "guaranteed tuition" approach might work to help stabilize OU's tuition income and students' tuition costs, as well as providing an added incentive for students to stay at OU and finish their degrees.

The immediate tuition-hike proposal calls for a 1.6 percent hike in undergrad tuition and fees, with no increase in the surcharge paid by out-of-state students. The room-and-board increase would result in students paying 3.5 percent more for a standard double room, and 0.5 percent more for meal plans.

Regional campuses would see a 1.6 percent "blended" increase rate, meaning some would go up by 2 percent, and some by 0.8 percent. The Heritage College of Osteopathic Medicine would increase its tuition by 5 percent, and enact an additional 5 percent to the out-of-state surcharge.

The proposed tuition increase will generate about an extra $2.75 million in revenues, which according to Trustee agenda material will be used "to make essential investments in employee compensation, health care, capital improvements and heating plant replacement." OU plans to replace its old coal-burning Lausche steam-heat plant with something cleaner and more energy efficient.

IN THE STATED HOPES of lessening the frequency and impact of such tuition hikes in the future, and in an era of dwindling state support for higher education, OU officials have said it's imperative to change their "business model," including its tuition component.

In past meetings, the Trustees have discussed switching to either a guaranteed or a differential tuition model. In the latter, different tuitions are charged for different majors based on such factors as how much it costs OU to run the degree program, how much student demand there is for the major, and how much the average degree-holder can expect to earn after graduation.

OU officials have apparently decided to pursue the guaranteed tuition approach instead. That approach essentially locks in an annual tuition rate for each four-year cohort of students. According to a letter to the board from OU Provost and Executive Vice President Pam Benoit and Vice President for Finance and Administration Steve Golding, "Tuition guarantee programs do not eliminate increases but slow the rate."

Projections included in the agenda material seem to suggest that this could mean spreading roughly the same amount of increase out over a given time period in a different way.

The material projects what staying with the "historical model" might mean in terms of future inflation for the cost of an OU degree, compared to switching to a guaranteed plan that included room and board fees in the guarantee amount. From these, assuming that the increase percentages OU punched into the projection for each approach are those that would actually be applied, it would appear that under the guaranteed plan an incoming student would start out paying more than under the old system for his or her freshman and sophomore year. Then a price advantage would kick in by the junior and senior years as inflation continued to push tuition costs up, but the guaranteed tuition amount was held constant.

The projections assume that under the historical model, tuition would go up 2 percent a year (a proposed state cap), while room and board rates would go up 3.5 percent each.

One set of projections makes the comparison assuming a guaranteed tuition system is adopted for fiscal year 2014. Under the old system, a student would enter OU paying $21,855 for the first year (tuition, room and board, and general fees), while a student under a guaranteed program would pay $22,514 – $659 more.

By the fourth year, however, under the old system a student could probably expect to have seen his or her annual bill go up to $23,736 a year, while the first-year student with guaranteed tuition would still be paying $22,514 – or $1,222 less.

Even by OU's projections, however – which presumably contain more than a little guesswork – the overall savings for the guaranteed-tuition student over four years would be less than $1,100, or around 1 percent.

OU extends the comparison into the future as well. Based on the agenda material – and again assuming the projection fits reality – it appears that a student entering with guaranteed tuition in fiscal year 2018 could expect to save about $435 over four years compared to the old system.

OU OFFICIALS SAY they hope such a system would allow them more reliable forecasting of how much tuition money they will have coming in over time, save students money, and also offer students an obvious incentive to stay at OU for the full four years and finish their degrees.

According to the agenda material, OU would vary the length of the guarantee for different programs, as some require more than four years to complete. OU would have the option of including room and board, course fees and other mandatory fees in the guaranteed amount, which it has suggested it would probably do.

The guarantee would not cover tuition for e-learning, graduate school, study abroad or continuing education. It would be applied before any grants, loans or scholarships were taken into account.

While some institutions make such programs optional, the material suggests, the most effective programs are mandatory.

The program would be "flexible," OU officials suggest; thus, while the guarantee would be extended past four years if the student's credit-hour requirements for a degree couldn't be finished in that time, while a student who took an extra year that wasn't required, that student would be bumped up to the going guarantee rate for that year. The four-year period could also be extended for students with disabilities.

If a student took a leave of absence for, say, medical reasons or military service, the student's original guarantee rate would still apply when he or she came back to OU.

The agenda material notes that OU (and presumably other Ohio public colleges) will not be able to implement a guaranteed tuition program unless the Ohio General Assembly passes legislation allowing this approach. It will also have to be approved by the Trustees, as well as by the Ohio Board of Regents.

Some students are opposed to the hike and the guaranteed tuition idea. A rally took place on the campus Tuesday on the theme of "raise hell, not tuition," and in a letter to The Athens NEWS, one student labeled the guaranteed tuition proposal "nothing more than a tuition hike in disguise."

See separate article in this issue on the student rally.


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