COUNCIL BLUFFS — Using a model that Iowa’s Board of Regents unveiled last year to help families plan for the rising cost of education, undergraduate students who are residents of Iowa attending Iowa State University and the University of Iowa next fall will see at least another 3 percent tuition increase — and as much as a 5.3 percent increase.
Board President Mike Richards announced that range Thursday during a regents meeting in Council Bluffs, confirming the board’s continuation of a five-year tuition model it debuted last fall. The hope was to give students and families a line of sight to annual increases several months in advance, while still allowing for flexibility depending on state appropriations that go before the Iowa Legislature.
If lawmakers fully fund the board’s request for $18 million more in general education support for the next budget year — a request the board formally agreed Thursday to make — ISU and UI resident undergraduates will see a 3 percent bump in the cost to attend next fall.
If lawmakers keep funding flat next year and reject the regents’ request for more money, UI and ISU rates will increase the 3 percent plus the Higher Education Price Index, which is projected at 2.3 percent.
“If the state partially funds our appropriation requests, the base resident undergraduate rate will be somewhere within the defined range,” Richards said.
That’s what happened this year, for which the state appropriated $12 million more in general education support for the public universities — $6 million below the board’s $18 million request.
Regents raised the UI and ISU base tuition rates 3.9 percent. The University of Northern Iowa, which did receive its full state appropriation, held tuition flat. Richards said the board hopes to do that for UNI students again next year.
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UNI President Mark Nook has said his institution needs to become more competitive with its regional peers. UNI’s enrollment drop this fall marks UNI’s smallest student body since 1975.
He told the board that even with this fall’s rate freeze — which applied to every UNI student, including graduate students and non-residents — his institution still has a long way to go in matching regional competitors, such as Eastern Illinois University and Truman State University in Missouri.
Where UNI’s tuition is $515 below the cost to attend Iowa’s research universities, its regional peers report an average cost gap of $2,488. Room for increase
While UNI leaders stressed the need to hold down costs, UI and ISU administrators said they have room to increase — with both reporting costs at or near the bottom of their peer groups.
“Iowa State rates are 20 to 80 percent less than other universities across the Midwest, and we offer the lowest tuition and fees compared to our peer land grant universities,” ISU President Wendy Wintersteen told the regents Thursday.
That has created a revenue problem, as what had been surging enrollment in Ames begins to come down.
“Our lower tuition rates, combined with fewer students enrolled at Iowa State this fall, is further reducing our overall income,” Wintersteen said.
Compounding the effect are rising costs for employee salaries, infrastructure, technology and other services.
“As a result of increasing costs and lower tuition revenue, Iowa State made some extremely difficult decisions to reallocate $23 million in our (fiscal 2020) budget,” she said. “This equates to 3.1 percent of our general university budget.”
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UI President Bruce Harreld said his institution needs $33 million in new resources annually to implement its strategic plan — which supports ways to improve student retention and graduation rates, increase faculty research and citation and support the state’s economic growth.
That $33 million could come from improved efficiencies, tuition increases, state appropriations and a new public-private partnership the university is considering to outsource the operation of its utility system.
Although administrators haven’t finalized any decision to move forward — and they’re still vetting potential partners — Harreld said an endowment made possible through the collaboration could yield $14 million annually.
To ensure “we maximize the use of these proceeds,” Harreld unveiled a proposed grant process.
Grants of up to five years would be available, and existing work groups, steering committees and the university’s budget review board would consider applications, Harreld said.
“Anyone on campus could apply for a grant so long as it specifically and directly impacts the strategic plan,” he said.
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