Higher education

Tuition increases will cover cuts at University of Iowa, Iowa State

Shift in revenue pie illustrates fading state support

Two students sit on the grass in front of Curtiss Hall on the Iowa State University campus in Ames on Tuesday, Mar. 31, 2015. (Stephen Mally/The Gazette)
Two students sit on the grass in front of Curtiss Hall on the Iowa State University campus in Ames on Tuesday, Mar. 31, 2015. (Stephen Mally/The Gazette)

Last-minute tuition increases are expected to more than cover losses in state funding for University of Iowa and Iowa State University, according to Board of Regents documents made public Tuesday.

But for University of Northern Iowa, the rate increase won’t totally close the gap — with its 2018 budget still half a million under its budget for the 2017 fiscal year that ended June 30.

The Iowa Board of Regents, which governs Iowa’s three public universities, will consider approving the 2018 budgets at its meeting next week. Although the board’s proposed consolidated budget exceeds $5.8 billion — topping last year’s $5.7 billion — it includes previously unexpected state funding cuts that earlier this year prompted administrators to push for steeper tuition increases that the regents approved.

Those increases drove costs 5 percent over last fall’s rates for resident undergraduate students on all three campuses — and even higher for some students from out of state, in graduate school or in costlier programs.

Budget Projections

According to board documents, UI is expecting to bring in $17.6 million more in tuition revenue this year, covering the $15.4 million reduction in state appropriations inflicted during the most recent Legislative session.

That $2.2 million net gain, paired with another $1.5 million in indirect cost recoveries and interests, has UI reporting a revenue increase of $3.7 million for the current fiscal year — pushing its previous $736 million budget to $739.7 million.

Although UI is expecting more revenue, it’s a far smaller increase than it experienced last year — when tuition increases brought in $27.2 million, increasing its overall budget by nearly $31 million.

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Iowa State, likewise this year, is expecting $26 million more in tuition revenue — more than covering the $11.5 million reduction in state appropriations and helping increase its $636.7 million budget more than $16 million to $652.8 million, according to board documents.

New tuition revenue at UNI is expected to reach $2.6 million, and that won’t be enough to cover its $3.3 million loss in state support — decreasing its overall budget from $180 million to $179.5 million.

Tuition Revenues

As a result of the higher tuition and lower state support, the universities are relying on students and parents for a larger piece of their funding pie, according to the board documents. Tuition revenues now comprise 64.5 percent of UI’s general revenue budget, compared with 62.5 percent last year. State appropriations have decreased from 31.5 percent of the general university revenue to 29.3 percent — continuing the trend of plummeting state support.

At Iowa State, tuition revenue now accounts for nearly 70 percent of its general revenue, up from 67.6 percent last year. State funding now makes up 26.5 percent of its revenue pie, down from 29 percent last year.

Because UNI has more residential students who pay lower tuition rates, it relies more heavily on state appropriations. And yet, its dependence on tuition has grown — with 46 percent of its general revenue coming from students and families compared with 45 percent last year.

State support now accounts for 52 percent of the UNI revenue pie, down from 54 percent last year.

Task Force

The universities, in response to receding state support, have recalibrated their budgeting. UI President Bruce Harreld, for example, has instituted a new “collaborative process and budget model” that administrators say ensures buy-in and accountability at the college level, jives with the university’s values and mission and enables the institution to improve faculty salary competitiveness.

They’ve also called for more freedom in setting tuition — and a new Board of Regents tuition task force is meeting this summer to potentially give them that. Campus administrators have been asked to map out five-year tuition proposals, and Harreld — for one — has said he wants to increase rates by thousands for some students to bring UI on par with its peer institutions.

The tuition task force was supposed to hear from lawmakers and Legislative representatives on tuition-related issues later this week, but the board canceled that meeting due to low projected turnout.

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Sen. Herman Quirmbach, D-Ames, is one of just three who had agreed to present at the meeting, along with Rep. Cindy Winckler, D-Davenport, and Iowa Workforce Development Director Beth Townsend. Regents had invited representatives from the governor’s office, Legislature, Legislative Services Agency and the Department of Management to present, and Quirmbach on Tuesday expressed disappointment that more people weren’t willing.

“I’m disappointed that Republican legislators, Gov. Reynolds’ office, and other Reynolds state agencies failed to indicate any interest in participating,” Quirmbach said. “Republican legislators especially need to participate because their budget cuts to the state universities this year have caused steep tuition increases, more than double what the Board of Regents had initially planned.

“These late increases have slammed Iowa’s college students and their parents.”

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