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James Tinney

Last modified: Friday, April 5, 2002

Q&A on tuition increases

1. How does Indiana University's tuition increase compare with that of other major universities?

For the 2001-02 academic year, public universities raised tuition an average of 7.1 percent, according to the American Association of State Colleges and Universities. IU's increase of 7.5 percent at Bloomington and IUPUI and 6.5 percent on the regional campuses was in line with national averages. Some analysts predict an average nationwide increase of 10 percent or more in the coming year.

While some Big Ten institutions have not adopted their final tuition plans for the upcoming academic year, the trend is clear. The University of Iowa will increase tuition 18.5 percent this fall. University of Illinois trustees are considering a 10 percent tuition increase for the fall, on top of a 37 percent two-year jump for incoming students that began last fall. Ohio State will boost tuition for new freshmen by 19 percent, and for continuing students by 9.9 percent in the next academic year. At Penn State, officials are discussing a 10 percent increase. At the University of Minnesota, officials have said that tuition may have to increase 13 percent or more next year. IU's resident tuition is expected to remain at or slightly below the average of Big Ten public institutions in the next academic year.

Outside the Big Ten, the situation is similar. The University of Missouri recently enacted an 8.4 percent tuition increase, while also announcing plans to decrease course offerings, increase class sizes and reduce student services. Students at the University of North Carolina at Chapel Hill will be paying a 21 percent increase in the fall. At the University of Nebraska, trustees approved increases of about 10 percent for residents and 15 percent for non-residents for the 2001-02 school year, and the same increases are again scheduled for the 2002-03 year. The Tennessee Board of Regents has asked every school in the higher education system to submit plans to deal with a budget that is expected to result in tuition increases of 10 percent or more.

2. Why is tuition rising significantly at so many public universities?

As state governments have had to cut back their expenditures, they have not been able to maintain recent levels of support for higher education. In some cases, higher education has faced cuts in money already budgeted. Both have happened at Indiana University. IU has now absorbed more than $100 million in cuts and state appropriations that were withheld as the state's worsening economy prompted a series of budget reductions beginning last summer. While Indiana state leaders did their best to fund education adequately at all levels in the face of a difficult economic situation, increases for existing programs at IU fall far short of the inflation rate. Meanwhile, the costs of health care benefits and energy -- significant expenses for universities -- are rising much faster than inflation. In fact, in the area of health care benefits alone, IU's costs are expected to rise 20 percent next year.

Another factor impacting the budgets of public universities is the increased competition for the best faculty members. According to salary data compiled by the American Association of University Professors, private research universities in 1980 paid full professors, on average, $1,400 more than public research universities. By 2001, that gap had grown to $22,100. Clearly, public universities face increasingly difficult competition from private universities in retaining and attracting top professors. It is important to IU's students that they continue to have access to the best faculty members.

3. Will this budget plan allow IU to be competitive?

We believe so. It will allow for continued quality improvement, particularly in student-faculty ratios. It will also allow IU to continue its initiatives on the regional campuses to create new full-time faculty positions and to retain students.

At IUPUI and the regional campuses, a major challenge is retention -- providing the best opportunity for degree-seeking students to persist and graduate. That is vital in a state where the shortage of adults with bachelor's and higher-level degrees is a continuing concern. The tuition increases at IUPUI and the regional campuses will go toward funding the replacement of part-time instructors with full-time instructors, an important factor in improving retention and graduation rates. Funding will also be available to support other retention initiatives developed by the individual campuses in concert with the Office of Student Development and Diversity.

4. Will IU students, in effect, be paying more for less?

This budget proposal is designed to prevent that from happening. The university believes it is important to protect existing programs and not to allow the quality of the education that our students receive to erode. So every effort has been made to focus the bulk of the cuts on the administrative side of the budget. This budget plan will provide sufficient money to protect programs that are particularly important to students. Some notable examples are the freshman retention initiatives, cited by Time magazine in naming IU Bloomington as its College of the Year among research universities, which are fully funded in this budget plan.

5. Why doesn't the university do a better job of controlling its costs rather than asking students to pay more?

The university has been a good steward of the money it receives both from the state and from students. In February 2000, an outside evaluation of the university's administrative services functions uncovered no significant inefficiencies, and its recommendations continue to guide decisions on avoiding future costs. The recently announced cutbacks in state support will be directed as much as possible away from the core missions of the university: teaching, research and service. The challenge will be to minimize their impact in the longer term on the university's facilities and infrastructure.

A report by the Indiana Educational Policy Institute found that IU and Purdue ranked well below their peers in the share of their budget spent on administration, and well above in the share spent on instruction. That report also showed IU and Purdue well below their peer institutions in per student state support. Still, IU's tuition rates place the university around the middle of the Big Ten.

6. Why is the technology fee being raised?

The series of budget cuts has reduced state funding for technology to IU by more than two-thirds from the previous two-year budget. IU's information technology infrastructure is critical both to student learning and to faculty research. It must be maintained. The university plans to rescind the technology fee increase when state technology funding is restored.

7. How will financial aid be affected by this budget plan?

IU will continue to make financial aid available to the widest number of qualified students possible. Next year's budget proposal calls for continued increases in institutional support for financial aid across all campuses. That support, of course, is augmented by financial aid money that will be available from state, federal and private sources, as well as federal tax credits, Hope Scholarships and Lifelong Learning Credits.