MINUTES OF A MEETING

Transcription

1 MINUTES OF A MEETING Monday, April 27, 2015

2 TABLE OF CONTENTS Setting Base Tuition and Mandatory fees for the Academic Year (Item 1)...2 Approval of Differential Tuition, Program Fees, Class Fees, and Other Fees for the Academic Year (Item 2) Rates for Residence Halls (ASU, NAU, UA), Leased Apartments (UA), Family Housing (ASU, NAU) and Meal Plans (ASU, NAU) (Item 3)... 5 ADJOURNMENT

3 DRAFT ARIZONA BOARD OF REGENTS Minutes of the Business and Finance Committee Tuition Study Session Monday, April 27, 2015 A meeting of the Arizona Board of Regents Business and Finance Committee was held Monday, April 27, 2015 at Arizona State University, Student Memorial Union in Tempe, AZ. Present: Regent Jay Heiler (Chair), Regent Rick Myers (Vice Chair), Regent Mark Killian Regent Greg Patterson, Regent Valerie Hanna (phone), Regent Ron Shoopman (phone) Absent: Regent Ram Krishna Also present were President Eileen Klein (ABOR), President Michael Crow (ASU), President Rita Cheng (NAU), President Ann Weaver Hart (UA), Regent Bill Ridenour, Regent Mark Naufel Nancy Tribbensee (ABOR), John Arnold (ABOR) Lorenzo Martinez (ABOR), Gale Tebeau (ABOR), Mark Denke (ABOR), Morgan Olsen (ASU), Rich Stanley (ASU), Sheila Ainlay (ASU) Christine Wilkinson (ASU), Gregg Goldman (UA), Melissa Vito (UA), Dr. Andrew Comrie (UA), Jon Dudas (UA),Jennus Burton (NAU),Christy Farley (NAU), Bjorn Flugstad (NAU), Sarah Bickel (NAU), Sue Sosa (ABOR). Regent Heiler called the meeting to order at 9:05 a.m. Regent Heiler stated that today s process is designed to encourage in-depth discussion on the tuition proposals. Setting Base Tuition and Mandatory Fees for the Academic Year (Item 1) Approval of Differential Tuition, Program Fees, Class Fees, and Other Fees for the Academic Year (Item 2) Items 1 and 2 were presented in conjunction, reviewing one university at a time. President Eileen Klein commented that the Tuition Study Session this year provides information that the Regents have requested and is designed to better align the tuition setting cycle with the Operations and Financial reviews; providing a comprehensive look and understanding of the business plan associated with each university. Each university will discuss how they will achieve their academic, research and impact goals and align those with a discussion about revenue and what the state contribution may be. In June, the Regents will be adopting the budget along with the revised business plans, which will be adjusted accordingly to the decisions that will be made on May 4, 2015, regarding tuition. Regent Myers commented that the business plans were put together per the goals the Regents established. John Arnold, Gale Tebeau and Mark Denke provided a detailed analysis, including PowerPoint presentations on the undergraduate and graduate tuition proposals, financial aid, cost of attendance, differential tuition and class and program fees for each university. 2

4 Arizona State University Regent Patterson commented on PowerPoint slides 24 (Avg % of Undergrads and with Debt at Graduation) and 25 (Average Debt at Graduation-For Students with Loans). He stated his concern that these charts are very confusing to the public. He requested a chart to distinguish the average debt at graduation, composed of two groups, showing 60% of students that have an average debt of $23,000 and the other 40% with no debt at graduation. President Crow suggested differentiating between in-state and out-of-state students. The committee and presidents discussed a variety of issues, options and history regarding tuition increases, fees and the use of those fees at the university level, as well as the impact of state funding and budget reductions. President Michael Crow, Morgan Olsen, Rich Stanley and Sheila Ainley presented an overview of Arizona State University s tuition proposal. Achieving the significant objectives of producing 25,000 world class university graduates per year by 2020 and performing $700 million in funded research activities per year by The market positioning of in-state, out-of-state and international student tuition. Not to increase the resident tuition rate and instead implementing a one-time, one-year only, temporary fee of $320, which represents about 25% of the state budget reduction of $1,200 per student. The fee is being requested to allow time to regroup, secure additional revenue sources and change operations. No anticipation of any in-state tuition increase requests for the foreseeable future. Requesting tuition increases of 4% for non-resident students, between 10-11% for international students, and 2% for online students. No class fee increases and just a number of graduate student fee increases. The graduate programs operate under a market value policy. Tuition is set based on fair position in the market. ASU is a value within those prices, compared to other institutions. School of Journalism differential tuition increase of $250, mostly to replace extra ordinary equipment used in this program. Barrett s Honor s College per semester program fee increase of $250, the costs of the program exceeds its ability to generate revenue. Making budget adjustments by reductions in academic units, non-academic units, support units and delaying projects, at the same time investing additional revenue to maintain the university s strategy. In response to Regent Heiler, Sheila Ainley stated that the cost increase at the Barrett s Honor College is due to an increase in faculty, additional advisors from enrollment growth and the cost of building out the program on all four campuses. In response to Regent Killian, President Crow responded that ASU would need to enroll approximately 5,200 more out-of-state and international student to eliminate the proposed $320 one-time fee for in state students. In response to Regent Ridenour, President Crow stated that increasing the tuition for out-ofstate and international students by $13 million as an alternative to the $320 one-time fee for resident undergraduate and graduate, could possibly create a net negative outcome. There is a balance in the market elasticity for out-of-state and international students. 3

5 Northern State University Regent Killian requested from each university a comparison of the cost of attendance and the cost of a degree from 2008 to present. Mr. Arnold responded that we would get that information for him. President Rita Cheng, Jennus Burton, Christy Farley and Bjorn Flugstad presented an overview of Northern Arizona State University s tuition proposal. Since 2008 the Pledge Program has given students and their families the security of predictable tuition costs and incentive to graduate in four years. 96% of Flagstaff undergraduate students are covered under the Pledge Program. Any tuition increase will only affect new students. The pledge program is available to undergraduate students on the Flagstaff campus only. The 4-5% tuition adjustment for the extended campuses and online programs will bring the rates up closer to market. NAU continues to work on diversifying its portfolio of revenue sources. NAU is highly dependent on state general funds and tuition revenue. In the enrollment mix today and what is expected in 2020, NAU is primarily dependent on Arizona residents, which is part of the challenge in the revenue mix. Most nonresidents students are part of the Western Undergraduate Exchange (WUE) program, whose tuition is 1.5 times the resident tuition rate which is less than the out- of-state tuition rate. The WUE tuition rates cover the cost of attendance, but do not bring in the revenue margin. Adopting guiding principles on the campus to address the impact of the reduction of $17 million in state funding. Academic units are looking at a 4.5% reduction and non-academic units an 8-10% reduction. Identified permanent reductions in the workforce of 60 positions Possible closures of extended campus sites through the state. Notified two policy and research institutes that there will be a closure. Expanding class size and increasing course loads. Delayed construction and deferred maintenance, in particular, the postponement of the construction of a new Engineering Lab. Looking at leasing off campus space in the interim. Modified reimbursement policies, reduced travel allowances. All new hires are being reviewed by the president s office, renegotiating contracts to provide one time revenues and identifying other ongoing savings. NAU has refinanced and restructured its debt, and increased cash-on-hand. In response to Regent Myers, President Cheng stated that they chose not to include a surcharge due to it being counter to the intent of the Pledge Program s guaranteed rates. Regent Myers suggested that the board discuss the idea of a one-time surcharge for students. Regent Heiler stated he shares the same concern as President Cheng regarding the Pledge Program. President Cheng commented that they are proposing a $24 fee increase for information technology for all students. 4

6 University of Arizona In response to Regent Patterson s question concerning non-institutional financial aid on slide 62 (University of Arizona- Student Costs FY 2014), Mr. Arnold responded that the data does not include loans. President Hart stated that the data shown for non-institutional aid is Pell and endowment monies President Ann Weaver-Hart, Melissa Vito, Gregg Goldman, and Dr. Andrew Comrie presented an overview of the University of Arizona s tuition proposal. President Hart commented that the tuition proposal being presented was a process that included working with the student body leadership. Net loss of approximately $2,500-$3,000 per in-state student. Proposed zero percent increase for students in the tuition guarantee program and at the request of student body leaders, to extend the guarantee program to continuing students that did not accept the option of the program last year. This totals $2 million in foregone revenue. Tuition proposal is built around five key objectives: Maintain and expand predictability for our students and their families. Meet the state budget cuts through a shared approach, which includes tuition revenue, internal cuts, efficiencies and reallocation. At the request of our graduate students, establish a pilot of several master s degree programs as part of a guaranteed tuition plan. Reevaluate, at the request of our students and with their partnership, all processes related to course and program fees going forward into the future. Use the Never Settle plan presented in depth to guide both our investments and the reductions that will be necessary as a result of this proposal Rates for Residence Halls (ASU, NAU, UA), Leased Apartments (UA), Family Housing (ASU, NAU) and Meal Plans (ASU, NAU) (Item 3) Mark Denke presented an overview, including a PowerPoint presentation of the housing and meal plan rates for Jim Rund (ASU), Jane Kuhn (NAU) and Melissa Vito (UA) were available for any questions. Regent Heiler suggested if the Board has any questions or anyone needs additional information prior to the May 4 Tuition Setting meeting to contact President Klein or the Business and Finance staff. ADJOURNMENT The meeting adjourned at 1:15 p.m. Submitted by: Sue Sosa Sue Sosa Committee Secretary 5