South Dakota looks to lure away Iowa students with tuition break

South Dakota's public universities have seen fewer students from Iowa in recent years, which is why that state's Board of Regents has decided to start offering resident tuition rates to students from the Hawkeye State.

The board took action Friday on the offer, which will allow first-time freshmen or new transfer students from Iowa to qualify for undergraduate resident tuition at the University of South Dakota, South Dakota State University, Dakota State University, and Northern State University.

'Reducing non-resident tuition rates helps us strategically manage enrollments where needed,” South Dakota Board of Regents Executive Director Mike Rush said in a statement. 'This effort is intended to counter some of the push within Iowa to retain their students in state.”

Iowa's Board of Regents in recent years has urged its three public universities to do more to attract and retain Iowa students - even proposing a funding model in 2014 that would have tied a majority of state allocations to resident enrollment. State lawmakers rejected that proposal, but the campuses - especially the University of Iowa - still made recruiting changes, launched advertising campaigns, and rolled out new scholarships and financial incentives aimed at attracting more Iowans.

Monte Kramer, vice president of finance and administration with the South Dakota Board of Regents, told The Gazette on Monday that his state's universities have seen declines in Iowa students exceeding 20 percent over the last five years. He said South Dakota historically has been a popular destination for Iowa students - 270 Iowans enrolled as freshmen in South Dakota in fall 2012, according to The National Center for Education Statistics.

Kramer said South Dakota currently has more than 1,300 students from Iowa, a number its universities would like to see increase.

'Board policy allows the universities to propose reduced tuition rates to manage enrollments, and that is what was requested in this case,” he said.

Two of the regent universities on the west side of the state - South Dakota School of Mines and Technology in Rapid City and Black Hills State University in Spearfish - will not offer the reduced rate, according to Kramer.

The discount - based on current rates - would shave $2,170.50 off tuition for each new Iowa student over the course of a full academic year, according to the South Dakota Board of Regents.

Including both tuition and fees, the South Dakota system average for resident undergraduates in the current budget year is $8,039, compared with a systemwide average tuition and fee rate for non-residents of $10,789, according to a Board of Regents report.

Tuition and mandatory fee totals for resident students on Iowa's three public universities varies. In the coming fall, in-state students will pay $8,325 at the University of Iowa, $8,059 at the University of Northern Iowa, and $7,969.40 at Iowa State University.

Undergraduate non-resident tuition and fees across the Iowa campuses is much higher than in South Dakota - it will be $28,413 at University of Iowa in the fall, for example. That difference is part of the reason Iowa's Board of Regents says it isn't considering a similar offer to neighboring states in hopes of recruiting more out-of-state students.

'The tuition revenue obtained from non-resident students is used for student financial aid and program quality initiatives,” Board of Regents spokesman Josh Lehman said in an email to The Gazette. 'If our public universities lost non-resident tuition through reciprocity, they would need greater increases in resident tuition and/or state funding to offset that loss.”

Thus, Lehman said, reciprocity agreements would unduly place the cost of educating non-residents on Iowa citizens, who make investments in higher education through state appropriations. Those investments aim to 'provide access for Iowa students by maintaining affordability through relatively low tuition and to assure high quality.”

'The board believes that non-residents who attend Iowa universities also benefit from these state investments and should pay the full cost of attendance,” Lehman said. 'The Board of Regents does not provide reciprocity to students in other states because it would not serve the best interests of the state to do so.”

The South Dakota offer is effective beginning with the summer academic term.

According to an analysis of the discount, South Dakota system officials believe full-time equivalent enrollment would need to increase by 143 Iowa students annually 'to break even on the discounted rate.”

'The board monitors reduced tuition programs closely,” Kramer said. 'The hope is that the campuses will not lose any revenue given the competitive rate now offered to Iowa students.”

Iowa is not the only state receiving special treatment with the South Dakota universities. Since 2004, students from North Dakota have been able to attend Northern State University at resident tuition rates. Likewise, students from Wyoming have been able to attend Black Hills State University at resident tuition rates since 2013.

The state has maintained a reciprocity agreement with Minnesota since 1986 allowing students to attend in the other state at the higher resident undergraduate tuition and fee rate. And last year, South Dakota approved a children-of-alumni program that lets students from any state attend the same school that a parent or guardian attended at resident rates.