Education

Iowa regents to take more 'holistic approach' to funding

Universities rely more on tuition, even as revenue comes in under budget

Regent Nancy Dunkel (from left), Regent Sherry Bates, Regent Jim Lindenmayer, Regent President Michael Richards, Regent President Pro Tem Patty Cownie, Regent Nancy Boettger, Regent Rachael Johnson, and Regent Larry McKibben look on during a Board of Regents meeting at the Iowa Memorial Union in Iowa City on Thursday, Sep. 13, 2018. (Stephen Mally/The Gazette)
Regent Nancy Dunkel (from left), Regent Sherry Bates, Regent Jim Lindenmayer, Regent President Michael Richards, Regent President Pro Tem Patty Cownie, Regent Nancy Boettger, Regent Rachael Johnson, and Regent Larry McKibben look on during a Board of Regents meeting at the Iowa Memorial Union in Iowa City on Thursday, Sep. 13, 2018. (Stephen Mally/The Gazette)

After hiking tuition rates and approving an $18 million state-funding ask, Iowa’s Board of Regents in September vowed to discuss in November the creation of a new multiyear tuition model to both bolster revenue while helping prospective students plan for their futures.

Thus, the board next week is scheduled to discuss ways to take a more “holistic approach” to funding its public universities.

In documents made public Thursday for next week’s regents meeting, board staff stressed the importance of three segments of public higher education funding in Iowa: state appropriations, tuition revenue, and campuswide efficiencies that produce in fiscal savings.

“The board’s strategic plan calls for adequate support of regent institutions from all sources,” according to the meeting agenda.

In September, Board President Mike Richards noted a multiyear tuition model could include annual baseline percentage increases for resident undergraduates. Documents for next week’s discussion don’t detail any such proposal, but rather stress recent declines in state support for public higher education — despite enrollment growth and increases in the state’s general fund budget — and show regent tuition rates have room to rise without creating a competitive disadvantage.

“Current undergraduate rates for (University of Iowa) and (Iowa State University) are at or near the bottom of their respective peer groups and significantly below the average,” according to board documents.

At the same time, tuition revenue accounts for the brunt of regent university general education funding, at 65 percent compared with 21 percent in 1981. State appropriations accounted for 77 percent of the general education budget at that time, compared with 30 percent today.

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Since the 2009 budget year, state funding levels for regent higher education have dropped $95.6 million, even as enrollment has swelled 7,500 students during the same period. State support for the regent institutions is $68 million below its 2001 levels, despite enrollment growth of 8,900.

Those declines have come through several rounds of midyear cuts following state budget shortfalls, including a $21 million takeback during the 2017 budget year and an $11 million year midyear hit in the budget year that ended in June.

The board in September approved asking lawmakers for an additional $18 million for the next budget year — and they reported Iowa’s Revenue Estimating Conference last month increased its projected 2019 general fund receipts by $102 million.

UI officials in regent documents this week reported needing $31 million in additional resources through state support, tuition increase, and savings to achieve its strategic plan. Iowa State, after internal reallocations and savings, projected needing $29 million a year to achieve its strategic goals. And University of Northern Iowa needs $6.5 million a year for its strategic plans.

Tuition Revenue

New documents made public Thursday show the public universities collectively failed to generate as much tuition revenue as expected — despite rate hikes. The schools brought in more tuition dollars than last year, but enrollment declines meant less money than budgeted.

For example, Iowa State projected $456.6 million in tuition revenue and instead brought in $450.3 million due to “enrollment leveling off.” Both UI and ISU administrators have said they want to scale back enrollment in light of state funding dips.

But UNI has sought student body increases, and its ambitions fell short — meaning $2.7 million less in tuition revenue than budgeted.

Enrollment Declines

Fall enrollment reports made public Thursday show across-the-board declines, with UNI reporting 695 fewer students, or a six percent drop; UI reporting 510 fewer students, or a two percent dip; and ISU reporting 1,001 fewer students, representing a three percent decline. Graduate and professional students also declined. And, when breaking down the numbers by residency, the three universities enrolled 563 fewer out-of-state students, 788 fewer in-state students, and 855 fewer international students.

“The single largest contributor to this drop in international students is China with 471 fewer students in fall 2018, a one-year decrease of 12.9 percent,” according to board documents. “This follows a similar drop (-522 students) from the year prior.”

Another area of decline came in the form of transfer students — most of whom come from Iowa community colleges. Iowa’s public universities collectively saw an 11-percent decrease in that group from fall 2017, with its percentage of community college transfers dropping 12 percent.

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“Iowa State University led the others with a one-year drop of 264 transfer students,” according to the board’s enrollment report.

The one area of enrollment growth came in students who identify as racial or ethnic minorities. This fall’s 11,729 across the three campuses — or 15 percent of the total — represented the largest ever. UI had the highest percentage, with 18, followed by Iowa State at 14 and UNI at 10 percent.

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

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