Discussion of Plateau - State Board 2 April 2004

Moseley. Our tuition proposal has not changed from that we discussed with the board in 2003. Decided to maintain request despite 5-6 million dollars more in state general fund cuts. Measure 30 cuts (exact amounts to be allocated) and tuition tax (pay back due to HB1248) related PERS tuition reforms. Is an unfair tax on our students and in facts PERS costs are increasing not decreasing. We are maintaining same request of 12% tuition increase on residents and 3.5% increase on non residents. Translates into 143 per term resident and non-resident 182 per term. With these tuition increases given additional budget cuts have serious challenge to balance budget. As look at current projected budget situation - non resident enrollment has not grown at level - high non resident tuition - negativity in press around higher ed in Oregon - issue to deal with is course availability. We had not specific number for increasing number on increasing for charging on plateau. Did tell board to go over time to straight credit hour but that we might continue to be on discount on plateau to provide incentive. Couple of years ago - put in pilot program on modification of plateau to reduce 12-18 to 13-16 this is 3rd of this. Reported not seeing a decrease in carrying load on that. Put in discount for early morning late afternoon courses - that has been very successful. Actually tuition numbers should be reduced by 5% as doesn't take into account. Collecting about 5% because of 15% discount for early and late. Since 1999 our overall available teaching dollars per student at 10000. But at UO has gone down about 8%. Have fewer dollars per student than had in 1999. So course availability is a serious issue. We have moved more courses into the afternoon, more large classes, student faculty ratios have increased. Commitment to student was to do everything in power to keep courses there. Used courses charged in plateau entirely for course availability. Put that money toward course availability. Whether or not we will be able to succeed given financial pressures remains to be seen. In 2000/1 UO relative to peers had 65% amount of money to teach students. But we are providing an education equal to those peers. We are now well below 60% and not in a sustainable situation. With that tuition increase will get through next year. By putting off hirings. Leave with structural deficit. Not putting ourselves in a sustainable situation. Patching it up to get through next year. Philosophy of the plateau. One reason we looked at it - as tuition was raising as a total cost of education - what that does put an ever increasing burden on student who can only take 12 or fewer. Other side of coin is providing incentive for students who can. How do you balance those competing problems. Inequity to require students who can not take advantage of plateau to pay for those who can. Those courses cost just the same. Our faculty feel strongly want our students to be able to experiment - take courses outside. Need to take 16 credits towards graduation. What we are looking at is not whether we can offer these for free. Who pays. We believe equity issue - when tuition is now more than 50% of course - student who gets advantage should pay. High drop rate for students - drop at little or no cost leaving with little or no cost. In long run - have students who are used to plateau - we will get better - provide incentives for better behavior from students by providing discounts from a straight credit hour rather than an an apparent freebie. Suppose had straight per credit hour system. Take course at 0800 or after 1500 give you 15% discount. Might also also give discount on plateau. Balance out equity issue with discount. What would I like to bring to you. Bring you something like discount system. Like to bring proposal - offer discounts try to provide incentives for behavior that MBF is trying to accomplish.

What are we attempting to accomplish with plateau? Encourage them to take that extra class. Impose penalty for dropping classes at plateau level or above. Adjust matter of time until new students come into system. Oregon is very much outlier in having plateau. Above 16 is harmful to student or Univ. to take 18 or 21? Moseley - that depends on student situation. Some do well. Others need to take lower amount. Need to take just 12 - coming into this w/o the kind of preparation or study habits. Highly variable. Uniform policy not a good idea. On average, want students to take 15-16 per term. Get through in 4 years without having to take excess hours. Limited availability of courses - have to use them to best. Additional charge above number of courses to take more courses than those needed to graduate thereby taking advantage of the subsidy.

Zinser having same conversation - focused on full time student. Accelerated baccalaureate program get out in 3 years - pay less - take 18. Talk about idea of taking beyond number of credits to graduate plus a little - or to take double major.

Conn. Historically everything above 12 was free. Brought down to 18. Students don't question that hours 19, 20 legitimate to pay. At some point a decision was put in place. Now a 3 hour plateau kicks back in.

Rachael Pilliod. 15% refund fee imposed. Other Universities have penalties.

If have empty seat drives up cost for entire enterprise. Raises over all tuition rates the next time around. Incentives are better than penalties.

Moseley. Have schedule for penalties - get 85% down to 50%. If have plateau nothing to be refunded doesn't work. WOU worked with advisors. Some students advised - doesn't cost anything - go to first session - if you don't like it - drop it. That does mess up the system. Check it out and nothing lost if drop back to 15 or 12.

John Wykoff Director OSA. One of difficulties dealing with - should be uniform policy. Used to have one. Board struggled with it. Open to - not one size fits all. Not a way to do that. What is driving changes to plateau is different or different campuses. Issue of philosophy. Don't have money. Effect of removal is very large cost increase. Can learn from some of more creative approaches that have been tried. The removal of plateau is reaction to a bad financial situation. Doesn't get to goals you are trying to reach. Ways of approaching this - what is average credit load of school - create plateau taking that into account. Will not be 12-18. Have to have incentive to get out faster. If you take a full load and get out faster - needs incentive.

Brigit. Have suspicion that lower income students are are differentially impacted. Bottom 25% quartile. Pattern from first quarter not going to be stable - how would you design program to get same total total revenue but less impact. Adjust plateau so starts at 15 credits.

Moseley. I would have straight per credit and given incentives at 16 credit hour. Ask for straight per credit hour rack rate and then give discounts to try provide incentives for kind of behavior we want. With regard to issue of financial aid. At UO financial aid for students - figured before register - is figured on 14 credits which is our average carrying load. If student takes more than 14 can apply to financial office for additional financial aid.

Ed ray - OSU. We calculate student financial aid based on 15 credit hours and then move it up or down based on what they actually take. All OUS use 14/15 as place holder and then adjust it up or down.

Ed Ray. Sent around two documents. We started out last year saying would go with a maximum of 5% for resident. Come back want to do up to 5% for in state or resident no increase for other group. All about markets and where market is. Out state students carry more of freight than instate students even with state subsidy. We are in danger of pricing ourselves out of the market. That is why we are not raising tuition. Not making any changes for out of state students. Is plateau for students. Why haven't students adjusted things? Important part of it - tuition is going to keep going up. Disincentive to pay for it now rather than absolute certainty that tuition is going to be bigger next year - and if you wait everything is going to cost more. Students are making complex calculations. We never talk about - opportunity cost of their time. All the time they are in school they are not making money and earning money. Students need to sit down and do the math who make decision to wait. Take you quickly through your numbers. None of us got into this business to price anyone out of anything. We are presented with unhappy choices. What helps or hurts students more. The 5% and increase from 25 to 50 on plateau range. That generates 4.3 million dollars. Our estimate is PEBB cost of health benefits is 1.5 mil. Measure will cost 2.1 mil. Hard to estimate PERS. HB2148 is perceived PERS savings. Have to take 2.1 mil in tuition dollars and give them to the state. Have 3.3 million dollar problem. Go back to cut administrative costs, use fund balances. Last recourse will be to cut course offerings and cut student offerings. Can't promise you it won't happen. Our calculation on average cost is under 9,000 per course. All about same for 15 credit hour student. Don't have luxury of saying we could choose. We are stuck with budget note. Can't go above 5%. What are consequences of not going with 25 dollar increase. That is another 2.3 mill problem. If were to do away with everything charged on plateau have 5.5 additional problem for a total of 7.8. Intuition tells you - if is per credit hour charge - should pay for what you get. Another element - economic incentive - opportunity costs to time - clearly is incentive to take more credit hours and get done. But if you don't have option (would require 10.9 increase) to keep it cost neutral, then have additional 2.3 or 7.8 problem have to solve. Can't do it without adverse effects on course availability. Different level of intuition. Not just what happens on demand on side. But how do you get it on the supply side. If have not found alternative way to cover those costs. Philosophy. All in different situations. One size doesn't fit all. Issues are same for all of us. At PSU 60-70% are part time. If have plateau, then 60-70% of students subsidizing the per credit hour of rest. If 80-85% are full time as at UO or OSU. Cost neutral. For us it is 5% or 10.9% on everyone's tuition bill. Those are not happy choices and that is where we are financially.

MardiLynn - budget note limits it to 5%. No longer applies in theory because of Prop 30. Would assume from principle it applies and work back from there.

John Wykoff. We don't question your motives. Do think students make complex decisions when they have the luxury decision to do so. Students often have no choice. Rising debt load shows they simply don't have the ability to make good long term decisions. Make short term decisions that in the long term are horrible. OSU. Things are going to get worse from expense stand points. That is why carrying loads are resilient. Trying to figure out how to do it.

Tim Nesbitt. Whole balance between resident and non-resident. OSU Out of state students are 13% of undergraduates. Paying 3 times as much. Question is - will they come. Our admissions people say we need not to do anything for a while. Having a hard time holding numbers. WOU. For most of us is 4 times. Most states peg it at double. Need out of state student to have interesting class discussions. Martha Anne Dow OIT. Initially submitted a 2 year plan. Included fact would do 9% rate increase and eliminate plateau. Now proposing 3% rate increase overall. Our revenue situation - that - 2.8 million. Based on actual carrying load. Generate 2.4 million with only 3% and not 9%. Looking at two resource feels necessary for OIT to meet quality standards for equipment in professional discipline. As reduce plateau from winter to fall from 18 to 15 found that carrying load impact is minimal right now. Not much data to project the future. Predicting elimination of plateau will not have very much on overall carrying load. Our students have to carry 15 to graduate. Most of our students are working at the same time. 59% of students are part time. Inequity because part time students are subsidizing the full time students. This is the profile of OIT. Ensure that all students pay the same per credit hour and part time students don't subsidize full time. Students will have flexibility to choose course loads. Have incentives for students in programs. Repeatable sections. Student in engineering program gets out of sequence - grades or inability to schedule - sits out for a long time which prolongs time to graduation. Need to implement subsequent sections so students can continue in timely resources. Time to graduation - provide those sections in timely way. Another major issue - don't think is case - their preparedness in OIT in math - incentives to getting them prepared in math. Creative ways to keep our students in sync to achieve success. If can't eliminate plateau will need to move rate increase back up to 15%.

Henry Lorentzen - hearing desire to have flexibility.

Dan Berrnstein. Our incentive was not purely financial to eliminate plateau. But it would cost us 2 million. Have been planning to eliminate the plateau. But at the same time, tried to keep tuition low - no tuition increases. So over all cost of 15 credits is 25% - falls between UO and OSU in terms of costs for full term. Current budget model unfair to part time students. 64% of graduate students take less than full time. Under this time, part time student pays 90/credit and subsidize full time students who pay 72/credit. Take care of inequity. About 25% of students take students in plateau and then drop back - goes back to point Moseley was making. The plateau inhibits our ability to partner with community colleges. If have plateau complete obstacle to doing a lot of the degree completion programs. Try to be more equitable with full time/part time students and be more consistent with MBF.

Elizabeth Zinser. Plateau change is very similar for SOU - we are largely residential - our greatest growth is in part time students in Medford and our work in Northern California with other cc. About 30% of our students are in that category. Only modification we have made to date has been to modify downward the amount per credit for resident and non-resident graduate students. Understand cohorts in masters program. This is a better plan. Not changed for undergraduate. Students and we are not pleased with reality of increases. Understand. Were we not not put in plateau change, would lose 700,000 translate to go from 12% to 16% in resident undergraduate. Have to go up about 4% to compensate for that loss. Resident versus non-resident. SOU has tried to be a bit gradual in increasing tuition. Now showing the enrollment grown. Have had 3% for resident and 8% increase in non-residents. Over past 2 years about 15% increase in both groups. Trying to do what can do with affordability pools. Efforts to provide fee remissions and private scholarships. Students are incurring larger debts. Get to students some genuine grants in aid. Not exceeding 8% fee remission level imposed on us by budget note. Have had decline in state appropriations by 17%. Compensated in part by tuition and fees. Will be using fund balances. Additional reductions. Very tight. Have responsible fund balance at 6.2% but that is predicated on no additional reductions and we know we are going to get more - and steady state with respect to enrollments. Consultations with students on campus, graduates and undergraduates. Very involved with us. Going back to student senate this coming and to the faculty senate. All share the sadness in needing to do this. Students are getting as conversant as we are with it. Spreading the plateau out a bit even though there are dollars charged for it. Graduated level at 56 is better for students. Significant progress in coming together on various alternative and better choices among the not so good choices. 15 credit charge is lowest in system. That is a function over past few years and not what is happening now. Peer institutions - for in state we are at higher level. Have California and Washington representative. Calif. is big increases on very low bases. Cal State. Look at non residents. Differences among institutions. Struggling across border just like OSU.

Each institution cap didn't address plateau.

Phil Conn. Last summer we were approved for 6% increase predicated on phasing out plateau. Think students know we had to balance books. Had to go up on rate. If were not to phase out plateau - we have got to to up 10-12. We have spent a lot of time with student - last Tuesday with Senate. Come to realize one way or other have to balance books - who will pay and how they will pay. Equity issue. Third state where I have gone through it. This discussion is driven by need for revenue. Other states - pegged as revenue neutral. Reduced cost per credit hour - as many winners as losers. Equity. Tuition plateau is biggest obstacle to collaboration. If taking 12 at WOU is disadvantageous to take 3 at Chemeketa. For campuses with continuing ed - keep books separately - when pay per credit hour ceases to be an issue. Literally when you can not calculate whether a new section will pay for itself become complicated. One hour course in yoga - pay for adjunct. Only 1 of students paid 19 students took it on plateau. Simple cost accounting - confounds system. Vestige of time when were or were not a student - when all students were full time. You either were a student or were not. WOU we need to balance our books. Down to 3% trying to go to zero. Tuition plateau gone but no increase in rate. Trying to do that. In a year or two it is forgotten. Rational way to do things in this time of user fees.

When Moseley went off Plateau was done for philosophical reasons.

Henry Lorenzo. Q. Is there any support for uniform policy. NO. Q. Given what we have covered today, what should we do with respect to further meetings. Importance of adequately vetting proposals at own campuses with student and faculty. Relay it to us in summary fashion. Invite OSA to campuses? Focussed on institutions and have conversations there. OSU. Are going to have discussion of this again in May and June. Allow student organizations to make a more formal presentation. Engage students on a campus by campus basis. Tim Nesbitt. Had good discussion on structure. What might happen over next couple of months. Moving targets. Need another update in a month.