Tuition and Mandatory Fee Recommendation University of Kentucky
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1 Council on Postsecondary Education May 9, Tuition and Mandatory Fee Recommendation University of Kentucky On April 25, Kentucky s public postsecondary institutions submitted tuition and mandatory fee proposals to the Council. The Budget and Finance Policy Group held tuition hearings on April 30 and May 1 to provide the institutions an opportunity to present their proposals. The policy group evaluated each institution s proposal on the basis of affordability, access, productivity, and funding adequacy. Upon approval by the full Council, the recommended rates will establish maximum tuition and mandatory fee charges that may be assessed to students enrolling at UK during fall semester 2008, spring semester 2009, and summer term ACTION: The Budget and Finance Policy Group recommends that the Council approve the following tuition and mandatory fee rates for the University of Kentucky. Recommended Tuition and Mandatory Fees Current Recommended Dollar Percent Rate Category Tuition & Fees Tuition & Fees Change Change Undergraduate (Lower Division) Resident $ 7,096 $ 7,736 $ % Nonresident 14,896 15, % Nonresident Multiple Undergraduate (Upper Division) Resident 7,302 7, % Nonresident 15,094 16,096 1, % Nonresident Multiple Graduate Resident 7,670 8, % Nonresident 16,158 17,228 1, % 1
2 Attachment A contains additional categories and rates for graduate master s programs in business (MBA), diplomacy, physician assistant studies, radiological medical physics, and health physics; for professional programs in law, medicine, dentistry, and pharmacy; and for professional doctoral and doctorate of physical therapy programs. The Budget and Finance Policy Group recommends approval of rates for these additional categories as proposed by the university. Supporting Data Affordability In , annual resident undergraduate tuition and mandatory fees at UK totaled $7,199 (an average of the university s upper and lower division rates). Between and , the average annual rate of change in the university s resident undergraduate tuition and fees was 12.6 percent (CPE data). In , UK s total price of attendance for resident undergraduates living on campus was $18,196. The five-year average annual rate of change in total price at UK was 8.6 percent (IPEDS data). In , the median net price of attendance at UK among full-time, resident undergraduates who completed and filed a Free Application for Federal Student Aid (FAFSA) was $10,781 (CPE Comprehensive Database). That same year, the median family income of UK students who completed a FAFSA was $61,300. This means that, on average, students from this group paid about 18 percent of their reported family income to attend UK in , the third highest proportion of family income paid among the state s public institutions (UofL at 28 percent was the highest, and KCTCS at 25 percent was the second highest). Compared to similar doctoral granting research universities around the country (i.e., research institutions with land grant missions and medical schools), UK s tuition and required fees and total price of attendance in both ranked slightly below the median, in the lower-middle quartile; and that same year, the university s tuition and fees as a percent of state median family income ranked at the 75 th percentile (IPEDS data). Access During fall semester 2007, full-time equivalent enrollment at UK was 23,430 and ranked highest among Kentucky public four-year universities. The university s FTE enrollment increased by 3,201 students or 16 percent between fall semesters 1997 and 2007, representing the second largest nominal increase among the public fouryear universities (WKU was highest with 4,052) and the fourth highest percent increase (CPE data). UK s total full-time equivalent enrollment during fall semester 2006 ranked at the 25 th percentile among a comparison group of similar doctoral granting research universities (research institutions with land grant missions and medical schools) around the nation (IPEDS data). 2
3 Productivity In 2006, UK s full-time retention rate was 78 percent and ranked highest (along with UofL) among Kentucky s public four-year universities. The university s retention rate increased by 1 percentage point between 2003 and 2006 (IPEDS data). During academic year , UK s six-year graduation rate was 59.1 percent. Between 1997 and 2006, the university s graduation rate increased by 10.7 percentage points, from 48.4 percent to 59.1 percent (CPE Accountability Report). UK awarded 3,613 bachelor s degrees during academic year Between 1998 and 2007, the number of bachelor s degrees awarded at UK increased by 366 awards or 11 percent (CPE Accountability Report). In , UK s full-time retention rates, six-year bachelor s degree graduation rates, and bachelor s degree production per 100 undergraduate FTE all ranked in the bottom quartile among a comparison group of similar doctoral-granting research universities around the nation (IPEDS data). Between fiscal years 1997 and 2005, the amount of federal R&D expenditures generated by UK faculty increased from $62 million to $143 million, or by 130 percent (NSF data). As a result of this increase, UK moved up in public university rankings of federal R&D expenditures from 45 th to 40 th between 1997 and 2004 (Center for Measuring University Performance data). UK s extramural R&D expenditures increased from $83 million to $215 million, or by 159 percent, between fiscal years 1997 and 2005 (NSF data). Funding Adequacy In , the amount of UK s total public funds per full-time equivalent student was $24,158. Between fiscal years 1998 and 2008, the university s public funds per student increased at an average annual rate of 3.4 percent, the lowest level of growth among Kentucky s public four-year universities (CPE data). That same year, the university s net General Fund appropriation per FTE was $13,787. Over the last ten years, UK s appropriations per student increased at an average annual rate of 0.8 percent per year, the lowest level of growth among the state s public four-year universities (CPE data). In , the university s gross tuition revenue as a percent of total public funds was 42.9 percent and ranked second lowest among the public four-year universities (only KSU s was lower at 39.4). Between fiscal years 1998 and 2008, the university s student share of public funds increased from 26.4 percent to 42.9 percent (CPE data). Compared to similar doctoral-granting research universities around the nation (i.e., research institutions with land grant missions and medical schools), UK s state appropriations per FTE and total public funds per FTE ranked in the upper quartile in , while its gross tuition revenue per FTE ranked at the median (IPEDS data). That same year, the university s student share of total public funds ranked in the bottom quartile relative to the comparison group (IPEDS data). Staff preparation by John Hayek, Ron Carson, Bill Payne, and Jonathan Thompson 3
4 Council on Postsecondary Education Institutional Tuition Proposal Summary University of Kentucky 1. Change in Annual Full-Time Tuition & Mandatory Fee Charges Current Proposed Tuition & Mandatory Tuition & Mandatory Dollar Percent Category Fee Charges Fee Charges Change Change Undergraduate Resident $ 7,096 $ 7,736 $ % Nonresident 14,896 15, % Nonresident Multiple Graduate Resident 7,670 8, % Nonresident 16,158 17,228 1, % 2. Change in Gross Tuition & Mandatory Fee Revenue Estimated a Estimated a Gross Tuition & Gross Tuition & Dollar Percent Mand. Fee Revenue Mand. Fee Revenue Change Change $ 228,948,700 $ 235,196,000 $ 6,247, % 3. Change in Full-Time Equivalent Enrollment Estimated a Estimated a Number Percent FTE Enrollment FTE Enrollment Change Change 23,485 23, % 4. Support for Scholarships and Institution-Based Student Financial Aid Programs -- Additional $2.2M for undergraduate scholarships, additional $1M from the General Assembly for the Robinson Scholars Program, and the new Catalyst Scholarships and UK One Year Grants which are both need-based. a. Estimate provided by institution as part of the tuition and mandatory fee proposal. 4
5 5. Anticipated Uses of Proposed Tuition Revenue -- Fund salary increases, benefits cost increases, fixed cost increases, and investment in strategic priorities. -- Offset a $20 million reduction in state operating funds. Unrestricted General Fund Expenses $1,271,400 Faculty compensation market catch-up adjustments (effective 1/1/08). 1,111,800 "Fighting Fund" to retain faculty and research assistants. 446,200 Faculty promotions. 662,300 Health insurance benefits. 2,200,000 Scholarships. 1,146,700 Tuition revenue dedicated to colleges for enrollment expansion programs. 2,589,700 Operating expenses. $9,428,100 Total 6. Rationale for Tuition Increase -- A 3 percent reduction in state appropriations in the current fiscal year. -- A 3 percent budget cut in as part of the budget of the Commonwealth. -- Total $20 million reduction in operating dollars. -- Fund fixed cost increases. -- A 9 percent increase in tuition and fee charges will generate approximately $5.6 million. -- Internal reallocations and efficiencies will redirect $4.8 million. -- President Todd has asked for $14 million in operating cuts from UK's colleges and other units. 6
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