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Guaranteed Tuition Pros, Cons

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Editorial Note: This is the second piece in a series on exploring tuition models.

College affordability and budget predictability were the reasons most cited by Ohio University administrators as to why they are exploring a new budget model for the coming years.

OU administrators are preparing to propose the Guaranteed Tuition plan, a budget model gaining popularity around the nation, to the Board of Trustees to be voted on in April. The plan, which would essentially lock a student into one tuition rate for a four-year term, guarantees students’ tuition cannot be increased during degree completion.

“Ohio University realizes that its current model of increasing tuition is not sustainable for the long term,” President Roderick McDavis said during a phone conference March 1. “With the understanding that we cannot continue on the same path of increasing tuition, we have spent the past eight months researching and exploring new tuition models. Guaranteed Tuition is one of those models.”

The model has been discussed with the Board of Trustees and continues to be shaped specifically for OU. McDavis said the plan has been well received by the board and will be introduced to the state legislature if it is approved. The plan is currently being worked on for the Athens main campus, but may apply to regional campuses depending on individual programs.

“We’re still in the process of developing our tuition plan, but the Guaranteed Tuition process appears to have promise to institutions of our size, revenue base and educational mission,” McDavis said, noting the model would have to take into consideration economic risks, inflationary risks and proportional share in addition to affordability.

The plan is intended to start during the fall of 2014 or 2015.

The tuition model was first introduced to students during a Student Senate meeting in 2012, generating lots of questions from students concerned with debt and affordability.

The plan is being considered for a tuition and fee model or a tuition, fee, room and board model over a four-year term. Students who take breaks during their education may receive waivers to keep the same rate they were promised during their freshman year, depending on the reason for the break. Military breaks and medical leaves are considered eligible for waivers to remain within the same cohort. Students who choose to take a leave mid-degree completion or students who choose to go to school for a longer period of time than necessary may have to pay a higher rate.

In the event of another economic downturn or unexpected university budget crisis, Stephen Golding, vice president of Finance and Administration, said the guaranteed tuition model would have the flexibility to adapt to changing times, while still being mindful of affordability.

“It is really intended to recognize that higher education is price sensitive and that price sensitivity would have to be mindful of the economic conditions,” Golding said. “So, while there are risks inherit in doing a tuition guarantee program, the tuition guarantee program by itself would not necessarily have greater risk because of the economy.”

McDavis said the model would provide predictability for both the university and students’ families in planning their budgets, focusing on long-term solutions to education affordability. To help with student debt, McDavis said the university plans to “aggressively restructure Ohio [University]’s financial aid program.” The administration is developing a fundraising campaign that would attempt to match every dollar the university spends in scholarships and aid with two dollars of donor funds, which would start sometime this year.

Administrators are unsure of how the model will adapt to increases in state share of instruction, or SSI, or during periods of economic growth. If the university were able to decrease tuition rates, it is unclear whether this would apply to all cohorts or incoming freshmen.

Golding emphasized that the university is expected to provide the quality of a 2013 expectation of education with the SSI funds at the same rate it did in 2001. “That’s another reason why we have put this program on the table, because we are trying to recognize that managing costs is a significant part of what students expect when they come here, while at the same time expecting the quality that Ohio [University] has become known for.”

The administrators said that as the process unfolds, they will continually ask for student and faculty input about the feasibility of the plan. But, during an anonymous survey conducted by The New Political, students raised other concerns in regards to student solidarity.

“The guaranteed tuition plan will benefit the University, in the sense that they will have an easier time raising tuition for each new incoming class, as it will no longer affect the earlier classes,” one student wrote. “Tuition, if anything, should be lowered as you complete your degree successfully as retaining existing students costs much less that recruiting and admitting new students to fill the void left by transfers and drop outs.”

“The guaranteed tuition plan will make it easier for the administration to raise tuition every year, because students won’t complain if it doesn’t affect them,” wrote another.

But other respondents seemed excited for the plan: “This would be a great marketing and selling point for the college. It will also increase retention.”

Increasing retention is one of the many goals of the university, as the state will be shifting its focus from enrollment to graduation rates when determining funding for higher education institutions. Vice President and Provost Pam Benoit said the model has the potential to also increase enrollment, based on the experiences of other universities with similar programs.

“Guaranteed Tuition is not intended to eliminate future tuition increases, but rather to find a thoughtful way to control them,” McDavis said. “Allowing students to pay a single tuition rate for a fixed period of time would offer predictability for students and parents and a financial incentive for timely degree completion.”

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