UMass Trustees Approve Fee Increase, Call for Future Two-year Freeze
Freeze possible if state returns to 50-50 funding
DARTMOUTH - Calling it an action needed to protect quality and offset a decade of state budget cuts, the UMass Board of Trustees today approved a 4.9 percent tuition and fees increase for undergraduates and most graduate students - but pledged to freeze charges in Fall 2013 and Fall 2014 if the state agrees to fund 50 percent of the University’s education budget.
"If the state agrees to take on a more equitable share of the funding burden over the next two years, we will keep tuition and fees frozen at this new level," said James J. Karam, chairman of the UMass Board of Trustees.
"We would be the first public university in the country to hold the line on tuition and fees for two full years if the state joins us in this effort," Karam said. "This would send a powerful message that we are all serious about controlling the cost of higher education and easing the debt burden on our students."
The budget for the coming year and the proposal to freeze costs to families for the next two years contingent on increased state funding passed on a 15-2 vote of the Board.
"The state needs to make a commitment to fund UMass -- it can’t simply dump more costs on students and their families. If we can get the commitment President Caret has asked for, we can be the first public university system to freeze costs to families for two full years. I hope the governor can get on board with this," said UMass Dartmouth student Trustee Peter Schock, who voted for the fee measure.
During this past academic year, the state provided 45 percent of the funding for the University’s educational programs, while students and their families shouldered 55 percent of the burden. Next year, the state’s share is expected to dip to 43 percent. The state most recently provided 50 percent of the University’s general education funding in Fiscal Year 2009 - and only a decade ago, in Fiscal Year 2003, the state provided 61 percent of the funding for general education programs and students and their families 39 percent of the cost.
"We need to get back to a footing where the state is funding its public university at some reasonable level, at least equal to what students and their parents are paying," said UMass President Robert L. Caret. "To do otherwise is to take the ‘public’ out of public higher education."
Under the proposal approved today by the UMass Trustees, tuition and fees on average will increase by $580 for in-state undergraduate students during the 2012-2013 year. The 4.9 percent increase - which applies to all undergraduate and most graduate students -- will generate $25 million in additional revenue for UMass academic programs.
The Board also voted to expand the scope and activities of its efficiencies taskforce and asked the taskforce to report back on "findings and strategies for achieving cost savings for the University."
In voting to approve the fee increase for next year, Trustees noted that UMass faces $63 million in rising costs in just two areas next year as a result of negotiated contractual increases with its 10,620 unionized employees and because of increased debt service resulting from the $2.4 billion construction/renovation campaign the University has undertaken over the past decade. The contracts were negotiated based on guidance and parameters established by the state.
Under the new student-charge structure, tuition and fees for in-state undergraduates will on average rise from $11,901 during this past year to $12,481 in 2012-2013. The 4.9 percent increase is lower than the average increase for other Massachusetts public institutions and is generally lower when compared to public universities in the region and the nation.
"We are trying to steer a moderate course on this difficult issue," President Caret said.
"On one hand, I was attracted to the idea of freezing tuition and fees, but that would have forced us to make dramatic and unacceptable cuts in a range of programs to offset rising labor and debt-service costs. Conversely, we could have mirrored the near double-digit increases we are seeing in other states to more fully cover rising costs, but that would have imposed too great a burden on students and their families. We see this as the reasonable and responsible course," President Caret noted.
"This is never an easy issue," Karam said. "Certainly, the easiest decision would be to never increase our student charges. But to take that course would be to consign the University to decay and decline, particularly in an era where this state, like states all over the nation, no longer funds public higher education at the level that it once did. And decay and decline is something we can never accept. We are determined to move forward, understanding that we need to safeguard affordability in a number of ways, particularly by making sure that sufficient amounts of financial aid get to the students who need aid most. We are proud to see that the University’s own spending on financial aid reached record levels during this past year, and the Board of Trustees considers aid to be a top priority."
While the new state budget for Fiscal Year 2013 has not been finalized, the University appears to be in line to receive an additional $25 million - all of which would be earmarked for previously negotiated contract increases.
The state appropriation and student fees are the University’s chief funding sources for its education programs, and the additional $25 million that UMass stands to receive from the state and the $25 million in additional fee revenue combined would not cover the $63 million jump in collective bargaining and debt service expenses. UMass will look to new efficiencies in other areas and growth in smaller revenue sources to cover the gap.
While the state is set to provide $25 million to cover part of the cost of union contracts, the state’s share of funding for the University’s general education budget is expected to drop to 43 percent in FY 2013, with students and their families funding 57 percent. Ten years ago, the state provided 61 percent of the funding for general education programs and students and their families 39 percent. State support per full-time student is expected to be $8,130 in Fiscal Year 2013, down from $10,015 per student in Fiscal Year 2008.
INCREASES IN MASSACHUSETTS AND ELSEWHERE:
Average 2012-2013 Fee Increases:
Mass State Universities: 6.3%
Regional Publics: 6.2%
National Average: 6.5%
UMass Peers: 7.4%
A FOCUS ON FINANCIAL AID:
UMass provided its students with a record $158 million in grant funding during the recently completed academic year - funding that comes directly from the University and is an important component in the $736 million in financial aid that UMass students received from all sources. The University’s own grant funding is expected to grow by at least $5 million next year. Additionally, UMass plans to step up its student debt-counseling efforts in 2012-2013. According to the most recent financial aid report, in-state, undergraduate students had 91.8 percent of their demonstrated financial need met last year through a combination of grants and loans. Nearly two-thirds of the University’s in-state, undergraduate students received need-based financial aid during the 2011-2012 academic year. Financial aid is available to families at most levels of the economic spectrum. For example, the average grant award in the $75,000 to $100,000 income range last year was $4,484. Over the past decade, UMass funding of financial aid has grown by 483 percent while state scholarship funding for UMass students is up 31 percent.
CAPITAL SPENDING AND DEBT SERVICE:
UMass has dramatically improved the faces of all five campuses over the past decade, constructing science and research buildings, new classrooms, student recreation centers and new dormitories, as well as making progress on a backlog of deferred maintenance projects. UMass has completed $2.4 billion in construction and renovation projects over the past decade. This work has been critical to advancing its academic and research mission and has helped to drive interest in the University of Massachusetts, which is experiencing record levels of applications and enrollment system-wide. But because of the state’s inability to fund capital projects for UMass at traditional levels, UMass was forced to shoulder 85 percent of the cost of this $2.4 billion building boom, leaving it with manageable but rising levels of debt service.
UMASS EFFICIENCY STEPS:
The University continues to move forward with an array of efficiency and effectiveness initiatives, taking significant steps in areas including electronic procurement, energy conservation and employing new technology to reduce administrative costs. Additionally, UMass has eliminated 645 positions over the past four fiscal years through layoffs, retirement and attrition.