Tuition compact will not benefit the university
The compacts are more smoke and mirrors than hard solution to the university's budget problems.
By Peter Soto
Thursday, June 19th, 2008
Last Thursday, the Kansas Board of Regents voted to allow the University to increase tuition costs and implement a tuition compact that is to be enforced on all incoming freshmen. Students in the University’s tuition compact will pay an 8.4 percent increase in tuition while students who are not in the tuition compact will pay a 6 percent increase in tuition. Students who are locked into the compact will pay the same amount of tuition for four years. Students not in the compact will pay a level of tuition that is subject to future increases until they finish their degree.
While, at first glance, the tuition compact looks like a money saver for students, it will not benefit the University or its students in the long run. The tuition compact does not give the University the flexibility to address economic concerns during times of economic hardship and economic boom.
In 2001 and 2003 tuition increases were less than 5 percent. If a similar situation occurs in the near future and the University decides to lower the noncompact tuition increase by two percent or less, the students who are locked into the tuition compact will be paying more than noncompact students. If tuition costs do not rise, compact students will be carrying an unnecessary economic burden. The University will receive more money than it would have if all students were paying the noncompact rate.
While a decrease in tuition is unlikely, a more serious and more probable situation could occur. If three years from now, there is a situation that causes the University to want to raise tuition by 25 percent, it will not have a large population of its student body to call on because they will be locked into set four-year plans that will only account for the increases of previous years. The worst case scenario involves students who pay the noncompact rate of tuition (i.e. transfers, fifth, sixth and seventh year students and non traditional students) taking the lion’s share of the monetary burden along with the incoming freshmen class. Such extreme jumps in tuition are not uncommon. Only six years ago, the University proposed a 25.21 percent tuition increase. The following years saw proposed increases of 20.75 percent, 15.9 percent and 14.3 percent.
The economic burden placed on students who are not covered under the compact would be financially taxing to an extreme degree. Students not under the compact would be paying for the education of those participating in the compact.
Even if tuition cost increases don’t reach double digits, problems with the tuition compact still exist. Between 1990 and 2005 (the only years that offer sufficient data), only about 70 percent of freshmen continued at the University after their sophomore year. If trends continue, an average of 30 percent of students will not enjoy the full payoff of being part of the tuition compact. Students who drop out or transfer after their freshmen year would pay 2.4 percent more than students who pay the noncompact rate. Additionally, only about 56 percent of freshmen complete a degree after six years. This means that students who do stay at the University more than four years will have to pay the noncompact rate eventually, which could possibly cost a great deal more than they are used to.
Over the past six years, the cost of tuition at the University has almost tripled from $77.75 per credit hour to $229.25 per credit hour. Instead of coming up with new gimmicks to disguise tuition increases as savings, the University needs to solve the problem of out of control tuition costs.
— Peter Soto for the Kansan editorial board
Discussion
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Its "Damned if you do and damned if you don't." Those who buy into the tuition compact should do so because they want the predictability factor, not because they think it will save them money. That predictability is a huge benefit to some families as they budget for education. Whether or not it will actually save money in the long run is just a gamble.
The University isn't advertising compact tuition as a money saver: http://www.tuition.ku.edu/faq.shtml#save
I'm not sure of the stance of this editorial board: First you are pro semi-unrestrained University spending (i.e. "The tuition compact does not give the University the flexibility to address economic concerns during times of economic hardship and economic boom") and then you are pro-students saying they will carry an unnecessary economic burden.
The tuition compact is in Year 2 now, so I don't know if this is news anymore. The real story here is why other Kansas universities don't have compact tuition (Is something wrong with it that we don't know about?). And why does it takes so damn long for someone to get out of KU?!?!
Other schools do not have compact tuition because they simply do not want it. The KSU admin has approached their students a few times about it and they have turned it down each time. I think they might have even had a referendum about it, but I am not very sure.
As for the other Regents schools...most have laughed at the idea. If you want to know why just look at the tuition rate at those schools. FHSU has not even crossed the $100 per credit hour mark and ESU might not be there yet either. So the tuition increases have not been as hard hitting at many other schools.
The tuition compact was the best option for many to ensure funds increased and public anger over tuition increases decreased. If you want to know the problems with the system just look at how it works. The only reason this system is viable is that there are a great number of students that do not complete their degrees in 4 years at KU. The costs are front loaded to the first two years...also the time when students are most likely to discontinue their KU education. So this allows the university to collect money at a higher rate and then not need to carry the burden of the lower rate of return they feel on the jr and sr. year. All in all, those of you in the compact need to thank those who drop out for making your costs lower. In addition, should the student extend their stay to a fifth year...well they will collect on average about $1000 per semester above that student's compact rate.
I think what the editorial board/author of this article fails to realize is that the compact is not a binding contract. If for some reason the admin needed money fast they are not bound to the compact. The admin could simply go to the Board of Regents and ask for the increase. The compact is only as solid as the benefit it provides the university. If at anytime it becomes impossible to project tuition 4 years out and then charge that rate for 4 years...the compact will most likely vanish. As for now the disguised tuition increase remains the best policy option in a climate that is sensitive to massive tuition increases.
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