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Board of Higher Ed approves average 3.4% tuition & fees increase, forwards recommendations on institutional boards

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

PORTLAND, June 1, 2012 – The State Board of Higher Education (the “Board”) met today at Portland State University to consider tuition and fee rates, recommendations on establishment of institutional boards, and achievement compacts, among other agenda items covered by the Board.

Tuition Rates

Jay Kenton, OUS vice chancellor for finance and administration, and Jan Lewis, OUS assistant vice chancellor for budget operations, presented the proposed tuition increases provided by each university, and which have previously been reviewed and forwarded to the full board from the Finance and Administration Committee. Kenton provided background on tuition increases over time and the components which influence increases. He noted that state funding is the primary driver of tuition increases, and that as OUS budgets have been decreasing over time, with a 16% decrease in 2011-2013 from the prior biennium, students have had to take up some of the loss in state funding through higher tuition costs. Kenton provided data on how OUS campuses’ tuition compares to their peer institutions and noted that all but one of the campuses are near or below their peers for in-state tuition, with one slightly above peer averages, but below the high peer rates. 

Lewis summarized the changes in the tuition and fee rates and related issues. She noted that Summer tuition rates are now approved at the same time as academic year rates, when in the past Summer rates were established and approved separately. She also noted that health service fees have changed because of changes in the healthcare industry which are bringing significantly higher rates. Because of this, most campuses which currently have mandatory health insurance coverage have opted to provide optional programs; PSU will still have required health insurance for students, although students can opt-out if they have insurance from other sources. Two campuses have always had optional healthcare insurance.

Oregon University System Base Tuition and Fee Rates for 2012-13 Academic Year
Annual Rates for RESIDENT UNDERGRADUATE Students for 15 Credit Hours

UNIVERSITY 2012-13 Tuition only 2011-12 Tuition only $ Increase over 2011-12 % Increase over 2011-12 2012-13 Tuition & Fees[2] 2011-12 Tuition & Fees[2] $ increase over 2011-12 % increase over 2011-12

EOU

$5,918

$5,603

$315

5.6%

$7,238

$7,046

$192

2.7%

OIT

$6,838

$6,377

$461

7.2%

$8,308

$7,889

$419

5.3%

OSU

$6,660

$6,228

$432

6.9%

$8,138

$7,744

$394

5.1%

OSU-Cascades Campus (Bend)

$6,300

$5,904

$396

6.7%

$6,855

$6,459

$396

6.1%

PSU

$6,390

$6,156

$234

3.8%

$7,653

$7,764

($111)

-1.4%

SOU

$6,183

$5,625

$558

9.9%

$7,521

$7,215

$306

4.2%

UO

$8,010

$7,551

$459

6.1%

$9,310

$8,789

$521

5.9%

WOU Average[1] 

$6,259

$6,169

$90

1.5%

$7,708

$7,795

($87)

-1.1%

SYSTEM AVERAGE (unweighted)

$6,570

$6,202

$368

6.0%

$7,841

$7,588

$254

3.4%

[1] WOU's Tuition Promise program guarantees that tuition rates for continuing students will not increase for 4 years.  The entering 2012-13 entering Promise rate is 9.8% higher than the prior year, but returning Promise students have 0% increase.  An additional base rate option that is 1.4% over last years entering rate will also be available for new students.  This table averages the increases.

[2] Fees are mandatory enrollment fees assessed to all students and include those proposed by student organizations and/or approved by student referendums.  Beginning Fall 2012, EOU, OIT, PSU, SOU, and WOU all eliminated the mandatory heath insurance component of their Health Services Fee.

Board members heard testimony from several students on the tuition increases. SOU president Mary Cullinan responded to the board about the need for the 9.9% increase in tuition and the financial problems that would arise without the increase, including going below board required reserve levels. She said that SOU has increased need-based aid to help the students with the greatest need meet the increase. She agreed that the rates will impact students, and noted that SOU has already gone through significant budget, staff and faculty cuts to address lower funding from the state in order to reduce costs, but that this has not been enough to meet operating costs without the tuition increase. The Chancellor supported Dr. Cullinan’s description of SOU’s fragile financial situation, and noted that even with this increase, SOU is still the second lowest tuition rate in the system. He noted that the impact of the increase would need to be watched as there is some concern that it may impact enrollment. Cullinan also noted that the increase of tuition and fees combined is 4.2% which is lower than some of the other campuses’ combined increase.

Institutional Boards    

Paul Kelly, chair of the Board’s Governance and Policy Committee, summarized the work completed by the Committee on establishment of institutional boards and identifying the functions and powers of these boards. He said that the work of the Board on changes in the governance structure of the entire system began a few years ago with the components embedded in Senate Bill 242, which granted additional autonomy to the OUS and changed its status from a state agency to a public university system. Kelly noted that the Board does not have the authority to create institutional boards, but this will rest with the legislature and Governor. The Board Committee has been beneficiaries of research on how other states have approached institutional boards; of reports and recommendations from consultants and other experts with a national scope; reports from the University of Oregon and Portland State University which both wish to establish institutional boards; advice and commentary from the other OUS presidents, none of whom seek institutional boards; and received input from the Oregon Student Association, the Interinstitutional Faculty Senate, and others throughout the process. Kelly and Chancellor Pernsteiner have presented testimony on the Committee’s work to the Special Committee on Governance of the Legislature, which also received testimony from UO’s interim president Berdahl, PSU president Wiewel, EOU president Davies, and WOU interim president Weiss on their position on institutional boards.  Kelly noted to the legislative committee that the Board would be forwarding its final recommendations after today’s meeting.

The fundamental question the Board committee looked at is: if institutional boards were to be established what would they look like, what would their powers be, and how would these boards interact with the rest of the system. Kelly noted that some of the premises underlying the recommendations on institutional boards include: devolving down to institutions as much operating authority as appropriate; that all seven universities remain devoted to their public purposes and to achieve the Board’s and legislature’s goals; that changes would be assessed in relation to how they achieve public purpose; that institutional boards would not harm other campuses in the system; and that OUS would retain a system of higher education and that any institutional board(s) would still fit within the system, and that there would still be a system governing board. Kelly said that the establishment of institutional boards would allow those campuses who have them to focus close up on their campus, as the OSBHE focus is necessarily on state wide policies and goals. Hopefully institutional boards would afford a real opportunity for campuses to enhance their ability to raise revenues, which is what the university presidents say is a key reason to establish these boards; and given lack of state support for higher education at this point, bold moves are justified.

Kelly summarized the Committee’s recommendations on how powers would be allocated between institutional boards and the Board of Higher Education. He noted that anything not listed on the summary sheet can be assumed to go to an institutional board or the university president. The recommendations are divided into the categories of powers reserved to the State Board of Higher Education, such as mission and degree programs approval; powers of institutional boards that require state board approval, such as tuition rates and issuing bonds; powers of institutional boards that seek state board advice and consent, such as hiring of presidents; coordinated powers between the state board and institutional board such as internal audit and system achievement compacts; and institutional board appointments and composition, which is recommended to come from the governor.

After some discussion among the board members and presidents, the full board endorsed the recommendation of the Committee as outlined in the docket, and to authorize the staff to forward that recommendation to appropriate state legislative and executive officials, agencies, and bodies.

Achievement Compacts    

Sona Karentz Andrews, OUS vice chancellor for academic strategies described the process of developing achievement compact targets. The achievement compacts were approved by the Board of Higher Education and the Oregon Education Investment Board in March. The next phase is to have both boards approve the 2010-11 actual, the 2011-12 projections, and the 2012-12 targets. After a brief discussion, the Board approved the compact targets as presented.

In other action and discussion at this and recent meetings, the Board and/or its Committees:

  • Approved the submission of Round 1 information to the Department of Administrative Services in conjunction with the Governor’s 10-year Plan for Oregon budgeting process, and that the Chancellor, or designee, be authorized to provide supplemental materials as may be subsequently requested by either the Education or Economy and Jobs Funding Team.  
  • Adopted the Fourth Amendment to the 2008 Restatement of the Oregon University System Optional Retirement Plan required to finalize a favorable enforcement resolution by the Internal Revenue Service, as described in the board docket. 
  • Approved at recent meetings (April 5 and May 3, 2012) the following new academic programs: Oregon State University, Ph.D. in Public Policy, effective in fall 2012; Oregon Health & Science University, M.S. in Endodontology, effective fall 2012; and Portland State University, Master of Real Estate Development, effective spring 2012.
  • Reviewed the initial 2012-2015 capital budget requests (at the April 16, 2012 meeting). 
  • Approved Southern Oregon University’s land lease for student housing and dining facilities, and related actions, as outlined in the April 16, 2012 docket for the Finance and Administration Committee of the Board. 
  • Approved Oregon State University’s request to authorize the Chancellor of designee to report to the E-board plans to re-allocate $12.0 million in Article XI-F(1) bonds from the capital construction projects for OSU’s athletics department titled “Gill Coliseum Renovation” and “Boathouse Remodel” and redirect those funds to the capital construction project Sports Performance Center, Gill Annex Phase II, as outlined in the May 11, 2012 board docket. 
  • Approved the OUS Quarterly Management Report dated March 31, 2012 at the May 11, 2012 meeting. 
  • The Finance and Administration Committee approved the Chancellor of designee to prepare and submit to the Oregon Education Investment Board and Department of Administrative Services a draft proposal for the 2011-2013 Capital Construction Program in accordance the docket and related materials. 
  • The Finance and Administration Committee recommended to the Board at its June 8, 2012 meeting, the adoption of OAR 580-040-0040 by permanent rule (related to Academic Year fee book) and the repeal of OAR 580-040-0035 (related to Summer Session fee book) as described in the May 11, 2012 docket. 
  • Heard reports from the Interinstitutional Faculty Senate; Oregon Student Association; and the Board Committees for Academic Strategies, Finance and Administration, and Governance and Policy.  

The Oregon University System comprises seven distinguished public universities and one branch campus, reaching more than one million people each year through on-campus classes, statewide public services and lifelong learning. The Oregon State Board of Higher Education, the statutory governing board of OUS, is composed of twelve members appointed by the Governor and confirmed by the Oregon State Senate. For additional information, go to www.ous.edu.