Tuition increase explained

Funding going towards building costs, student employment, salaries

Earlier this year a tuition increase was proposed to cover the cost of running older and newer facilities such as the Learning Innovation Center, hiring faculty to teach the increasing amount of students both on campus and online and salary increase for university employees, including some of the 7,000 student employees.

The proposed increase is due to a large influx of new students, primarily through the eCampus program, according to Sherman Bloomer, OSU director of budget and fiscal planning.

Next year, OSU’s funding from the state will increase from $106 million to $109 million, which makes up 20 percent of the roughly $500 million education and general operations budget, according to Bloomer.

The education and general operations budget goes to cover expenses such as running the library and funding the academic units of OSU – the colleges and the schools within them.

Running OSU as a whole costs around $1.1 billion dollars, the other $500 million goes towards research, grants from the government, athletics, housing and dining, and other non-academic programs. This $500 million comes from outside revenue.

The current proposal calls for a 2.2 percent increase for undergraduate residents, 2 percent for students in the Doctor of Veterinary Medicine program, 3 percent for Doctor of Pharmacy. students and a 4 percent increase for non-resident graduate students.

Non-resident undergraduate students, including international students, will not see an increase in their tuition costs.

According to Bloomer, this year’s increase in state funding follows years of decreased funding by the state after the 2008 economic recession.

In 2008 the state was funding around $5,972 per full time equivalent (FTE, one full time student or two half time students = 1 FTE), which was already lower than a majority of the states.

After the recession hit, money had to be reallocated, and in 2012 the state decrease of 29.4 percent was funding $4,214 per FTE, according to the State Higher Education Finance (SHEF).

Now, the state is funding about $6,100 per FTE (not adjusted for inflation), according to Bloomer

“(The State) made a significant reinvestment in higher education but they’re still not back to the level they were at in 2008 per student because we’ve grown a lot since then,” Bloomer said.

According to Bloomer, Oregon is still trailing other states in terms of funding per undergraduate resident student.

State funding increases do not make tuition increases go away, according to Bloomer. Over time costs go up and salaries increase.

The state pays a portion of costs related to higher education, as does the student. However, costs to keep the institutions running increases over time, and in turn, so does tuition, according to Bloomer.

“Costs go up, benefits go up, utilities go up, but the affordability part comes from who’s paying what share – 20 years ago when the state was paying 70 or 80 percent of that share, that cost increase to the students, their share was much smaller. Now the student is paying two-thirds or 70 percent or 80 percent of that cost, those cost increases are a much larger dollar amount to the student,” Bloomer said.

Along with that there is the split of how higher education is viewed, according to Bloomer.

According to OSU Vice President of University Relations and Marketing Steve Clark, financial support of higher education has shifted over the past 10 to 15 years. In the past, two-thirds of fees were covered by the state and the other one-third was covered by tuition.

Due to decreases in funding, those numbers have inversed and now students are paying a majority of the costs.

The tuition increase, if passed, would increase price of credit hours for resident undergraduate students by $4, meaning students would pay $187 per credit instead of the $183 they pay now. Non-resident graduate students would see a price increase of $31 per credit hour, according to Clark.

According to Salvador Castillo, OSU director of institutional research, the average undergraduate on the Corvallis campus and including eCampus undergraduate students, takes an average of 13.2 credits every term.

OSU President Ed Ray stated at the State of the University address last month that he plans to increase the university’s retention rate, specifically among first year students. Ray plans to increase the retention rate from 84.4 percent to 90 percent by 2020.

“If a student comes to Oregon State and only stays a year or two and doesn’t graduate, then their success in their career or their life is not going to be as great as if they graduated,” Clark said, “So, quite simply, if a student stays here and graduates in four years their cost of education is much less than if they took six or seven years.”

The proposal was designed to improve retention rates from freshman to sophomore year, sophomore to junior year, and so on and to keep education costs lower in the long term, according to Clark.

“If they do have student debt, they’ll have a better ability to pay off that debt,” Clark said.

Some of the state funding will go towards more financial aid despite the university having $1.7 million set aside prior to the 2015 session. The funding increased the amount to between $2.4 million and $2.7 million, according to Clark.

“Some of the state funding went to financial aid. The financial aid, the academic advising, the counselling, and our work to expand student teaching quality is all based upon providing students the ability to graduate in a timely way and complete their degrees,” Clark said.

The funds will be set aside in the same way as they were last year after the tuition plateau was removed and consequently, tuition increased.

“We felt that was not only the right thing to do but we also feel that it helped students overcome or manage some of the costs of tuition increases a year ago,” Clark said.

Bloomer and Clark agree that every increase in tuition affects every student, no matter how large or small the increase may be – which is why some of the state funding will be going towards financial aid. This state funding is also joined by the $189 million in scholarships and fellowships from the OSU Foundation.

Clark also mentioned that student employment offers students the opportunity to earn income and also have opportunities for learning outside of the classroom, such as through internships.

According to Clark and Bloomer, there are currently around 7,000 students working at and for OSU.

The proposed increase will cover the continuing costs of running older buildings on campus as well as the new costs of more modernized facilities such as the Learning Innovation Center, hiring more faculty, and according to Bloomer, “people costs”, salary increases for university employees, according to Bloomer.

The raises employees will receive are determined by what occupation a university employee holds, according to Bloomer.

For instance, student employees will receive a 5 percent raise when the minimum wage goes from $9.25 per hour to $9.75 per hour starting July 1.

Faculty can expect to see a 2 percent raise, according to Bloomer.

Hourly employees can expect to see a 2-3 percent raise, but only if they have been around for a certain amount of time, according to Bloomer

Students can learn more about the tuition increase and where their money goes by browsing the Orange Book on OSU’s Finance and Administration website.

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