This article first appeared in the St. Louis Beacon, Dec. 6, 2012 - Tuition for students attending the four campuses of the University of Missouri system next fall would rise by the projected cost of living, about 2 percent, under a preliminary proposal presented to the university’s Board of Curators Thursday.
Under a state law passed in 2010, tuition and fee increases for resident undergraduate students at public colleges and universities may rise only as much as the Consumer Price Index in December, unless a school receives a waiver from the department of Higher Education.
Meeting at the St. Louis campus, the curators heard a financial analysis that showed students paying a larger share of the cost of their education as levels of state support drop.
Nikki Krawitz, the university system’s vice president for finance and administration, noted that in a weak economy, the university wants to try to keep access as open as possible and graduates’ debt load low. As a result, she said, faculty salaries are not as competitive as they could be, while classes are larger and the list of deferred maintenance projects is growing.
Still, she said, based on the fact that from 2001 to 2012, the University of Missouri has accounted for 90 percent of the enrollment growth at public four-year schools in the state, the campuses at Columbia, St. Louis, Rolla and Kansas City continue to be attractive. She also noted that with the number of high school graduates shrinking, schools face a more competitive environment to attract good students.
“An education at any one of our four campuses is a great value,” Krawitz said. “We have to offer a combination of high quality education and competitive prices, or they won’t come.”
For the current school year, according to figures presented at the curators’ meeting, tuition at all four campuses of the university is below the national average of tuition and fees for resident undergraduate students at public doctoral institutions.
It ranges from $9,257 at Columbia to $9,350 at Rolla. Over the past five years, annual increases in tuition and fees for resident undergraduates have ranged on average from 2.1 percent at UMSL to 3.1 percent at UMKC.
For the first time, UMSL students will pay an all-in-one charge that includes tuition and fees instead of separating the two amounts out. It is the only campus in the system to do so, in an effort to give students a more realistic idea of what their education will cost.
In terms of student debt, Krawitz said, the national average for students is about $25,000, with UM students averaging between $20,000 and $25,000. She noted that in many cases, much of the money owed by graduates has gone to pay not just for tuition, fees, books and other educational costs but for students' living expenses.
“It’s not necessarily the increase in tuition and fees at public institutions that is driving the growth in the loan obligation,” she said.
Final recommendations on tuition increases will be presented to the board at its meeting Jan. 31-Feb. 1 in Kansas City.
Preliminary budget figures presented to the curators showed, once again, a gap between the amount of projected revenue and the amount of projected expenses. This year’s preliminary funding gap is $25 million, smaller than it has been at times in recent years.
Noting that the university faces an annual challenge to close that gap, Krawitz said:
“I’ve never gotten up here and shown a preliminary budget that did not have a deficit, and I’m going on 11 years.”
With flat state support and a limit in tuition increases, a major emphasis on cost control has led to savings of more than $80 million in the current fiscal year, university officials said; since 2009, savings and revenue enhancements have totaled $411.7 million.
“We have long considered ourselves good stewards of state resources,” university President Tim Wolfe said in a statement, “and our ability to identify continued cost savings and revenue enhancements year over year is something we are very proud of.
“Not only does it demonstrate our commitment to utilize well the resources that are invested in us, but it also shows our continued effort to rethink normal business processes, seek new revenue streams and continually think about how to deliver our mission in the most effective and efficient ways…. We recognize that it is our new normal to do more with less.”
One of the financial challenges presented in detail to the curators is the cost of benefits for the system’s 22,000 employees. Out of a total of $1.5 billion for compensation and benefits, $295 million of that goes for benefits. The largest component of that, medical benefits, has risen to $130 million from $60 million since 2004.
Betsy Rodriguez, vice president for human resources, noted that the university self-insures for health benefits, so it wants to maintain a good balance among employees who are enrolled.
“We want to make sure we don’t have all the unhealthy people in our plan and all the healthy people go to the health insurance exchange,” she said.
She noted that many university employees who earn less money can’t afford to buy family health insurance coverage so may be insuring only themselves.
Outlining steps the university has taken to control costs, Rodriguez said she believes that nearly a quarter of the school’s health-care costs are avoidable, and it is trying to encourage employees to modify their behavior to engage in healthier habits.
“We’ve pulled most of the levers we think we can pull,” she said.
You can view detailed presentations to the curators, in pdf format, on tuition and fees, financial aid, health and welfare benefits and academic affairs.
Curators also gave approval to a longstanding project on the St. Louis campus to construct a building addition and renovate existing space to the Benton Stadler Science Complex.
Current laboratory space in Benton and Stadler halls and the research building – three of the five buildings in the complex – are 45 years old and have never been renovated.
The first of three phases in the $32 million project will be construction of a 74,000-square-foot, five-story addition immediately south of Benton Hall, including teaching labs for biology, chemistry and physics.
The project will be paid for by $2 million from reserves from the St. Louis campus and $30 million in debt financing.