Board of Regents predict rising tuition without state help
“Some of that becomes pretty frightening,” Chancellor Charles Manning told the Tennessee Board of Regents on Thursday after seeing the equation’s results.
The model predicted tuition at East Tennessee State University would have to rise $1,400 to $4,000 over the next five years from its current level of $9,262 — an annual jump of 5.7 percent to 13.4 percent, Vice Chancellor Bob Adams said.
The calculation considered annual increases of 3.4 percent in economic inflation, 1 percent in enrollment, 2.5 percent in state appropriations and 3 percent in spending growth per student at similar schools. These factors would lead to the 5.7 percent tuition increase.
But Adams said a drop in state funding or a rise in peer schools’ spending could easily lead to the higher 13.4 percent hike.
Colleges and universities consider these factors already in setting tuition levels, but until now they had always figured the tuition rates last, after the Legislature adopted the state budget.
With the new formula, developed by the Tennessee Higher Education Commission, legislators will know the impact on tuition before they cast their budget vote.
“The masses cannot go to college, at some point, at these rates. You are pricing them out,” Regent William Watkins of Memphis said of the predicted trend.
“It will, in fact, certainly price that next 10 percent (of would-be college students) out of the market and maybe some going already if there is not a fundamental change in financing public education in Tennessee,” Manning said.
Regent Leslie Pope of Kingsport said she can anticipate legislators’ reactions.
“They will say, ‘Well, you have plenty of money now because you have a lottery,” Pope said of the $168 million from the lottery-funded Hope Scholarship program.
“But that is not in state support,” Adams said. “That is going to the student.”
Enrollment at the Regents’ six universities — ETSU, University of Memphis, Middle Tennessee, Tennessee Tech, Tennessee State and Austin Peay — was virtually flat in fall 2005 with 81,918 students and down slightly at its 13 two-year colleges to 74,817 students.
The doubling of tuition over the past decade against modest increases or cuts in state funding is considered a factor in lower enrollments.
The THEC formula does “a good job of putting something together so that hopefully legislators can start to visualize what the effects are (by) limiting appropriation increases,” Adams said.
State appropriations, up 3 percent, provided $642.9 million of the Regents’ $1.8 billion budget this year. Tuition was $501.3 million, up 7 percent, and various student fees added another $87.6 million, up 6 percent.
Adams calculated state appropriations would have to increase 7.5 percent every year for the next five years to prevent another tuition increase before 2010. That’s using the ETSU example; the percentage might be higher for other schools.
“And that,” Adams told the board, “isn’t going to happen.”
The Regents’ strategic plan for 2005-2010 would increase private fundraising and research sponsored by outside sources by 5 percent annually to help ease the tuition strain on students.
“I think our greatest concern has to do with increasing access with enrollments being flat,” Vice Chancellor Paula Short said, noting particularly a decline among students 25 years old and older. “That is going to have a huge impact on the state.”
In Tennessee, about one in five adults has a college degree.
Short said there is a suggestion the drop-off in community college enrollment is the result of the lottery, which provides larger scholarships to students attending a university than a two-year school.
THEC Executive Director Richard Rhoda called that an “unintended consequence” of the lottery scholarship program that may have to be addressed.
The Regents’ strategic plan would correct this by ensuring that Hope scholarships pay for all community college expenses, including books, by 2010.