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Higher Ed Board discusses tuition and funding trends for Oregon universities

Contact: Di Saunders, Cell: 971-219-6869; Office: 503-725-5714

PORTLAND, February 6, 2009 – The State Board of Higher Education (the “Board”) met today at Western Oregon University to review governance policy, current and next biennium budget issues, admission requirements, and historical tuition trends, among other items discussed by the Board.

Tuition History
OUS vice chancellor Jay Kenton provided a history of OUS institution tuition rates and state funding per student compared to their peer or comparator institutions. Kenton noted that after the passage of Ballot Measure 5, OUS tuition was increased by 41% between 1990-91 and 1991-92. Following this significant increase, tuition continued to increase at a rate above inflation, with 1995-1997 tuition increasing by 9% per year; to help offset these increases, OUS campuses set aside 20% of tuition revenues for financial aid (fee remissions) to preserve access. After effective protests from students, the Legislature adopted budget notes to freeze resident undergraduate tuition starting in 1997-1999, which was lifted in 2001-2003, but was then replaced with budget notes limiting tuition and fees. Soon thereafter, the Board of Higher Education established a policy to limit tuition increases to the projected change in Median Family Income, which continues to be in place as a guiding policy, and kept tuition increases around 3.4% per year.

Kenton said that state funding was limited in the early 1980s due to a recession, in the early 1990s due to Ballot Measure 5, in 2001 due to a recession, and is falling today as well, accelerating the need for tuition increases within OUS if state funding is not adequate. There were state funding recovery periods in the late 1980s, late 1990s, and in 2007-08. Other ballot measures, such as those relating to corrections, have also had a negative impact on state funding and, thus, tuition. Other states did not have the effects from Ballot Measure 5 and thus were able to hold their tuition lower than OUS during the 1990s. But due to the freeze and limits on tuition increases in Oregon, the state and national economy, and other priorities, other institutions have now caught up or surged ahead of OUS tuition rates. In conclusion, Kenton said that the large OUS campuses – OSU, PSU, and UO – currently lag peer averages for undergraduate resident tuition; EOU and SOU are slightly above peer averages; WOU is slightly below peer averages; and OIT is on the higher-end compared to peers. Regarding state funding per student FTE (full-time equivalent) compared to peers for 2006-07, OSU is less than peer averages; PSU and UO are below their lowest peers; EOU is above peer averages; SOU and WOU are below peer averages; and OIT is above peer averages. The peer list for OIT is being reviewed as it includes institutions which as not as similar in construct as the other OUS peer lists.

The Board and the university Presidents discussed the impact of the low per-student funding that Oregon public universities receive from the state, and the affect this has on student access and quality. Members felt that there is a high cost to the continuing disinvestment in students, including students going to other states for college, to fewer faculty, larger classes, potential tuition increases and the impact on students – especially those who are from low-income backgrounds – and how all of this affects the quality of education delivered to students.

Governance Discussion
Ryan Hagemann, OUS Legal Counsel and Board Secretary, presented proposed changes to Board committees and to current and proposed approaches to program, policy, fiscal and other approvals. The goal is to determine the best approach to delegation and decision making, with fewer items to be put before the Board for which the Chancellor, Board committees, or university presidents can be responsible. This approach leaves the time needed for the Board to focus more on System strategy, policy, advocacy and other areas. Board president Paul Kelly said that these changes would be incorporated into the Board schedule beginning in July 2009. As part of these changes, there will be fewer Board meetings per year which will be more focused on higher level strategic issues; and campus visitations will now be done separately from Board meetings on campuses so that members can spend more time learning about the programs, students, faculty, campus community, and specific issues at each campus. The proposed new Board committees would include: Governance & Policy; Academic Strategies; and Finance & Administration. Hagemann noted that there is a bill before the current Legislature that could assist the Board in implementing this new approach to delegation and focus. Members discussed the implications of these changes on decision making and outcomes, and will be providing further comments to the Board president, including which committee(s) on which they would like to serve.

Audit Progress and Plan
Patricia Snopkowski, director of Internal Audit for OUS, gave an internal audit overview and reported on the 2008 audit plan progress and the 2009 audit plan. She noted that the most significant audits in 2008 included federal compliance (grants and financial loans); outside employment; financial (fixed assets, purchasing); building security; and Banner data security. Much progress was made in 2008 in the areas of bringing on an external audit liaison; financial irregularity reporting and hotline; data security breach follow up; training efforts; and professional association involvement. Fourth quarter 2008 reports included: outside employment policy; Federal Perkins Loan; building security; and Banner data security. Snopkowski noted that 54 out of 58 follow ups were completed in 2008. The goals of the 2009 internal audit plan include reducing the risk of loss; identifying opportunities for increased efficiencies; and reinforcing existing control strengths. A macro risk assessment will also be completed in the areas of industry trends, past audit experience, fiscal and organizational changes, and management and board inputs. The highest priorities in 2009 will include: payroll (system-wide); financial aid (system-wide); OSU Business Center Model; IT security; research council compliance assessment; construction audit contractor management; external audit liaison; and hotline implementation and complaint resolution. The Board approved the Internal Audit Division’s 2009 Calendar Year Audit Plan and Final 2008 Internal Audit Progress Report.

In other action and discussion at the meetings, the Board:

  • Approved new academic programs: Southern Oregon University, M.I.S./M.A./M.S. in Interdisciplinary Studies, effective Fall 2009; University of Oregon, Master in Curriculum and Teacher Education, effective Summer 2009; Master in Curriculum and Teaching, effective Summer 2009; and Ph.D. in Critical And Socio-Cultural Studies in Education, effective Summer 2009.
  • Approved the Undergraduate Admission Requirements policy for the 2010-11 academic year, with minor changes, including increasing the minimum GPA for admissions for UO from 3.25% to 3.40%; increasing the minimum overall GED score at PSU from 460 to 580, and the ACT or SAT Reasoning requirements from 21 or 1470 to 22 or 1540, among other minor changes; and making some wording changes to increase the clarity of requirements for students and parents.
  • Authorized Oregon State University to award honorary doctorates to Frits Bolkestein, Jen-Jhun Huang, and Nicholas Kristof at the June 2009 commencement ceremonies.
  • Adopted a resolution authorizing the issuance and sale of general obligation refunding bonds to achieve debt service savings.
  • Adopted the following resolution for the Sale of Article XI-F(1) and XI-G Bonds: (1) finding that the Staff recommends the projects for which Article XI-F(1) bonds are proposed meet the self-liquidating and self-supporting requirements of Article XI-F(1), Section 2, of the Oregon Constitution and authorizing the sale of Article XI-F(1) bonds; and (2) authorizing the sale of Article XI-G bonds.
  • Adopted a temporary administrative rule amending OAR 580-040-0040 to reduce the incidental fee charged by the University of Oregon spring term 2009, as outlined in the Board docket.
  • Accepted the OUS Investment Report as of December 31, 2008.
  • Heard reports from the Interinstitutional Faculty Senate; and the Oregon Student Association.
  • Heard reports from the Student Participation & Completion Committee of the Board; and Portland Higher Education Committee.

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