Archive for Tuesday, November 24, 2009

Tuition assumptions

Do guaranteed tuition compacts really work for KU students?

November 24, 2009

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As tuition has soared at Kansas University, many parents of KU freshmen have applauded the new guaranteed tuition plan instituted in the fall of 2007.

Since then, freshmen have been required to enter into “compacts” that set their tuition and guarantee it won’t increase for four years. The plan has literally drawn a standing ovation during some freshman orientation sessions, but does it really pay off?

Tuition figures that accompanied Monday’s story, in which members of the Kansas Board of Regents expressed concern about next year’s tuition increases, offer an opportunity for some interesting number crunching.

KU’s tuition compact essentially requires freshmen to prepay tuition by dividing their estimated four-year tuition cost into four equal payments. Obviously, students who drop out after one or two years are losers under this system, but how about those who stay for four years?

Based on two 15-hour semesters each year, freshmen who entered KU in the fall of 2007 will pay a total of $25,560 for four years at KU. In the next two years, standard tuition, which is charged to students who transfer to KU or have interrupted their education, has risen by 6 percent each year. If standard tuition rises by 5.9 percent next year, four years of standard tuition would be approximately equal to the total of the four-year compact.

What happens with tuition next year is anyone’s guess. As regents were pointing out in Monday’s story, more cuts in state funding could drive tuition upward. If it rises by 6 percent or more, students who complete their four-year compact with KU will come out ahead. If, for whatever reason, tuition is lower next year, the compact students are the net losers.

The other factor that is apparent in the tuition figures is that KU officials are counting on tuition increases continuing to rise because compact tuition is rising at a far faster rate than standard tuition. In 2007-08, freshman tuition was 9.3 percent higher than standard tuition. This year, it was 12 percent higher. Freshmen who enrolled in fall 2009 will pay 15 percent more tuition over four years than those who entered just two years earlier. The increase, like the tuition, is “guaranteed.”

This assumption that tuition is going to increase at such a rate should be disturbing to Kansans. Tuition at KU has more than tripled in the last decade, and KU officials are working on the assumption that it will continue to rise drastically in the foreseeable future. Have they even discussed the possibility of holding the line on tuition or how they might refund tuition compact money if tuition rates were to go down?

At this point, it looks like freshmen in the first year of KU’s guaranteed tuition plan will at least break even — if they don’t consider any interest they might have earned on the frontloaded tuition they paid to KU. But if the projections on which the tuition compacts are based actually are helping drive continued tuition increases for future KU students, then the entire state is the loser.

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