South Dakota loses money, sticks with plan to offer Iowans in-state rate

In its first year offering Iowa residents in-state tuition rates at four of its public universities, the South Dakota Board of Regents system actually lost $541,633 in tuition revenue, according to a new report out of Iowa's northwest neighbor.

The calculation assumed the schools, without the tuition bargain, would have had the same number of 2016-17 Iowa students - a tally that did increase from 2015-16, just not as much as was needed to break even.

South Dakota's regents in March 2016 agreed to drop Iowa's undergraduate tuition to equal the resident rate at University of South Dakota, South Dakota State University, Northern State University and Dakota State University - the schools that sit closest to Iowa in the eastern portion of the state.

The offering, according to regents, aimed to reverse years of declining Iowa enrollments and to boost overall South Dakota numbers. It also hoped to counteract an Iowa Board of Regents proposal to reward its universities for educating more Iowans and the resulting marketing push among the campuses to attract and retain those students.

'There was a big campaign in Iowa to keep their students in Iowa,” Monte Kramer, vice president of finance and administration for the South Dakota system, told its Board of Regents on Thursday morning when presenting the report on the Iowa tuition bargain.

The deal for all first-year and transfer Iowa students at South Dakota State and University of South Dakota, for example, dropped the rate from $346.20 per credit hour to $238.50 - amounting to a savings of $3,231 for an Iowa student taking 30 hours.

At USD for this academic year, an Iowa resident would pay a total $8,772 in tuition and fees - compared with its out-of-state rate of $12,019. University of Iowa's in-state tuition and fees rate this year is $8,965; Iowa State University's in-state tuition and fees rate is $8,636; and University of Northern Iowa's in-state tuition and fees rate is $8,699.

And, in the wake of deep state funding cuts in the last Legislative session, Iowa's regent universities have proposed tuition increases for resident undergraduates over the next five years - should lawmakers fail to increase financial support going forward.

Iowa's Board of Regents is scheduled to approve next year's tuition rates later this month. It has expressed no interest in offering reciprocity deals, like in South Dakota, to residents of neighboring states.

For South Dakota to break even on its Iowa bargain, according to its regents' report, the four participating universities collectively needed to enroll the full-time equivalent of 447 students - or 139 more than the schools enrolled the previous year. The schools only upped their Iowa enrollment by 63.

University of South Dakota reported the biggest Iowa jump, with the equivalent of 36 more students than the previous year, followed by South Dakota State, with 19 more Iowa students. But because USD needed the equivalent of 69 more full-time Iowans to break even, and SDSU needed 66, they lost $245,379 and $337,042 in tuition revenue, respectively.

And yet, the board report noted other ways the additional Iowans added revenue - like through fees, housing and meals. That spending amounted to a total $333,893 in the first year.

The board also provided the caveat that it approved the Iowa bargain just months before the 2016-17 school year and after many would-be freshmen already had applied for and accepted admission to schools of their choice.

'The campuses did not really have time to market the program, and many students had made up their minds about where they were going by that date,” according to board documents. 'The universities feel that another year will provide a better measurement of the success of the program.”

And, based on this fall's new enrollment numbers, 'a growth in Iowa residents is clear.”

'It would appear that we will achieve or exceed the break-even point in fiscal year 2018,” according to the board report.

University of South Dakota, for example, enrolled the full-time equivalent of 249 new Iowa students this fall - representing a 28 percent increase over last year's new Iowa enrollment of 195. This fall's new Iowa student tally was 56 percent above the 157 in 2015, before the tuition bargain was in play.

'We couldn't be more pleased to see Iowans finding an increased value in South Dakota's flagship university,” Scott Pohlson, USD vice president of enrollment, marketing and university relations, said in a news release. 'I think the message is starting to resonate - which is great for USD's future.”

All the other participating schools also saw larger Iowa increases this fall, which Vice President Kramer said gives him confidence South Dakota will move into the black on the tuition deal this academic year.

'I think ... the next time I bring this report, you'll see positive numbers, and not negative numbers,” Kramer said.

He did urge the board, as it considers similar proposals to other states like Nebraska, to approve the bargains earlier in the application cycle to ensure students know the options within their budget as soon as possible.

'In the future, we want to get these proposals to the board in December,” he said.

l Comments: (319) 339-3158; vanessa.miller@thegazette.com